INTERNATIONAL HUMAN RESOURCE MANAGEMENT FUTURE TRENDS

INTRODUCTION Management of human resources, which comprises of array of all those activities that aim at utilizing and developing human resources of an organization, becomes all more challenging when we discuss its importance in light of international perspective. Conducting business in foreign land and successfully managing the operations in a manner that also leave room for development of human resources, are increasingly putting pressure not only on the top echelons but also on Human resource managers, who have started to play an important role in taking strategic decisions. The era of globalization is marked with growth of multinational organizations, which has resulted in disappearing boundaries. This transformation of world into a global village has not only brought numerous opportunities but also inevitable challenges. The idea behind this article is to understand, with relevant and recent examples, what role is human Resource Management is playing in those organizations that have taken the plunge to transcend geographical barriers so as to register a global presence. In this context, we shall also try to identify, what challenges are faced by human resource professionals and what factors are likely to shape trends in the field of international human resource management in near future. BUSINESS ETHICSWHATS RIGHT FOR YOU IS NOT RIGHT FOR ME! Shakespeare once quoted, There is nothing good or bad but thinking makes it so. What we think is good or bad is usually determined by the way we are influenced culturally. There is a growing awareness of MNCs to better focus on an ethical conduct that goes well beyond the strict legal interpretation. Because of their size, MNCs are usually more conspicuous, and so there is a greater need for a formal ethical code of conduct for its employees. The challenge for the Human Resource Managers is to be able to reconcile the contradictory forces of: a universal ethical code (i.e., it is possible to have core general values and priorities of preferred ethical con-duct); cultural relativism (i.e., the need to adapt or customize ethics to local culture); Competitive pressures (i.e., other companies from other countries pursue a lesser ethical approach in gaining unfair competitive advantage over those companies following stricter ethical standards in doing business).

CULTURAL RELATIVISM VS. ETHICAL IMPERIALISM Every organization needs to develop a code of conduct or a set of principles that it abides by while operating in an environment. The aspect of having a code of conduct gains more importance when the operations move to a foreign location. The issues of cultural sensitivity and the subjectivity involved in defining the ethical practices come to picture. What presents a dilemma is the choice between adopting the approach of relativism and

being an ethical absolutist. When organizations choose to accept the ethical relativity, they accept the approach that says- When in Rome, Do as Romans Do. They try to go with the flow by not developing a list of universal rights and wrongs, but reacting as per a particular cultures values and beliefs. Cultural relativism amounts to doing as the local industry does or another corporation will take the opportunity from the first corporation. Whether it is the practice of offering bribes to public officials, as in Indonesia, or refusing to accept or offer bribes, as in Denmark or Singapore, there are those MNCs who follow local customs regardless of the parent country regulations. This view is in direct contrast with those held by the believers of ethical imperialism. Multinationals endorsing this view give more importance to their own culture. Their cultural values hold more importance than the beliefs and customs of followed in the host country. Example showing how ethical imperialism may not work: In Saudi Arabia, a US computer company introduced a course on sexual harassment. The training sessions included a case in which a manager makes sexually explicit remarks to a new female employee over drinks in a bar. The course served to only confuse and offend Saudi participants as there are strict conventions governing relationships between men and women in Saudi Arabia. Middle Path- Integrative Social Contract Approach Multi nationals are today waking up to this fact that there are certain forms of behavior that are wrong, wherever they are practiced. One of the examples of such a form of behavior is bribery of government officials. No matter where an organization operates, resorting to bribery is definitely one practice that cannot be condoned even if it goes rampant in the host country. But at the same time, there are certain forms of behavior that should be accepted in cultural context. One of the examples could be the practice of exchanging gifts between business people in Japan. Hence it is important to strike a balance between different factors that shape ones own conduct in foreign land. Integrative social contract theory states that the ethical standards that any organization tries to uphold are governed by both: Limited number of universal ethical principles that are widely recognized and Circumstances of local cultures, traditions and shared values that prescribe what constitutes ethically permissible and what does not. Example showing how integrative social contract is accepted by MNCs: As mentioned before, Japan has a long-standing custom of gift giving. Those industries doing business in Japan have recognized in order to continue in active business relations, this custom must continue. MNCs such as IBM and Texas Instruments, both outspoken critics of bribery (accepting/offering), have acknowledged guidelines to gift giving in Japan. But at the same time, Roh Tae Woo, president of the Republic of Korea from 1988 to 1993, accepted $635.4 million in bribes from MNCs seeking to do business in Korea, which was highly condemned and opposed. It should also be considered that values of honesty, compassion, responsibility and freedom, fairness, tolerance, can be accepted as core global values, which can be upheld irrespective of cultural context. The basic challenge faced by the HR managers here is to ensure enforcement of global values and at the same time ensure that cultural issues of host country are also not ignored. Another Example:

Googles Operations in China The motto of Google, which says- Dont be evil was explained in different light by Google when it launched its operations in China. The issues that were sensitive to Chinese population were not made accessible considering the implications of not following the censorship laws in china and hence the motto was translated to disseminate as much useful information as possible. CHALLENGE PRESENTED BY VARIOUS MODE OF OPERATIONS IHRM issues arising vary with mode of operations in international location. For example the operations may be conducted through subsidiaries or via contractual modes, such as, licensing, franchising, and management contracting. In case of subsidiary operation, the main issues that needs to be addressed, are managing and staffing the operations. Moreover, subsidiary HR managers are also involved in arranging housing, health care, education, transportation and recreation activities for expatriates. But contractual operations imposes management and HR constraints that are usually absent in wholly owned subsidiaries. The HR also needs to focus on the training of PCNs, which should facilitate in transfer of technology and system as well as inculcation of corporate culture i.e. PCNs are involved only in short term assignments to deliver training in foreign locations. Hence, the above mentioned examples show that HR should have sufficient knowledge of various modes of operations and their possible HR implications, in order to provide pertinent inputs for the top management decisions that would guarantee success of international management operations. WIDER IMPLICATIONS OF HR FUNCTIONS IN INTERNNATIONAL CONTEXTANOTHER CHALENGE The functions of HR that include recruitment, selection, training, compensation acquire much wider implications when they are discussed in international perspective. The complexity increases in proportion to the extent to which strategic decisions are required to be taken. For example, even when dealing with one particular HR function such as compensation, the IHR manager faces a great variety of national and international pay issues, for example, the HQ based HR manager must coordinate pay system in different countries with different currencies that may change in relative value to one another over a period of time. FUTURE TRENDS IN IHRM 1. ALTERNATIVE ASSIGNMENT ARRANGEMENTS Short term assignments - In the ORC Worldwide 2002 survey, 72 percent of responding firms used short term assignments as an alternate means of satisfying the international assignment need Commuter assignments - Some times, the spouse or the partner may decide to remain in the home country and the couple work out ways to maintain the relationship with the help of firm. Sometimes, the

multinational companies may choose to help the couple through subsidized telephone bills and free return airline tickets. Virtual assignments - This is another alternate arrangement used by the MNCs. The purpose is to let the expats manage work without facing the dilemma and complications of relocation. 2.CULTURAL SENSITIVITY A NEW INGREDIENT OF TRAINING Culture gives people a sense of identity, whether in nations or corporations, especially in terms of the human behavior and values to be encouraged. Through it organizational loyalty and performance and be improved. Cultural knowledge provides insight into people. The appropriate business protocol can be employed that is in tuned with local character, codes, ideology and standards. Cultural awareness and skill can be helpful in influencing organizational culture. Cultural understanding and skill development should be built into all foreign deployment systems. Acculturation to different environments can improve the overseas experience and productivity and facilitate re entry into the home and organizational culture. Cultural competencies are essential for those in international business and trade. One of the latest trends in the field of IHRM can be seen in the function of training. Training and development extends beyond information and orientation training to include sensitivity training and field experiences that will enable the manager to understand cultural differences better. As a result, many organizations, are now investing heavily in providing staff with cultural sensitivity training to address issues such as aspirations, value systems, negotiation approaches, business etiquette and protocols as well as communication styles. One of the recent reports reveal that the Australian organizations face a pertinent challenge in increasing their international activities in Asia Pacific region, because Australian managers strongly lack cross cultural skills and international management expertise suited to international work. An example to illustrate increased prevalence of culture sensitivity training is as follows: The Transportation Security Administration created after 9/11 to safeguard America's airports is providing Islamic sensitivity training to 45,000 airport security officers so they'll know what to expect when Muslims fly from the U.S. to Saudi Arabia to participate in the annual "hajj," or pilgrimage to Mecca. Providing Islamic sensitivity training was in response to an incident when six Muslim imams were ejected by federal authorities from a US Airways flight in Minneapolis because they were deemed a potential security threat. Among the various behaviors that unnerved airport authorities was the group's prayers in the airport prior to their flight. Therefore, the Transportation Security Administration puts out information telling everyone that hajj is coming and this is the time frame when airport authorities would observe behaviors, such as individuals indulging in group prayers, as well as people traveling with types of items not usually permitted by airport officials. Thus, security officials are well aware of not taking such acts and behaviors as potential security threats.

3.INNOVATION IN IHRM ADOPTING PROACTIVE APPROACH To meet the shortages of strategic management skills and developing vital global leadership capabilities, business schools and management educators have entered global markets to develop links between corporate sector and educational institutions. This means establishment of foreign campuses and research centers in host countries and exporting education to students outside the parent country. For some universities, this is explicitly intended to provide American style university education abroad. Universities have also formed strategic alliances, partnerships and alliances and joint ventures, with local firms, multinational enterprises to offer cross institutional credits for subjects and joint degrees. Such an initiative will help the students to be better prepared for future roles of expats as they would be well aware of the prevalent conditions in other areas and will be better prepared for undertaking responsibilities as future expatriates. 4.NEW WAYS OF DESIGNING PERFORMANCE MANAGEMENT SYSTEM To balance the pros and cons of home country and host country evaluations, performance evaluations should combine the two sources of appraisal information. One of the latest trends can be seen in the area designing of performance management. Example of Nokia Nokia, the Finnish based world leader in telecommunication industry has intensive experience of sending and receiving people on foreign assignments. They send about 1200 expats on foreign assignments at any one point of time. Because Nokia has had to learn how to manage the performance of this large group of employees who are key to the success of firm in global business, they have developed a comprehensive performance management system that includes goal setting, performance appraisals and feedback, continuous training and development and performance related compensation. One thing that Nokia has learnt about performance of its various types of expatriates, who are in various types of assignments and situations, should be managed dissimilarly, even within the context of trying to apply a standard approach throughout its global operations. Nokia has put in place what looks on the surface, like a global standard performance management system, with the objective that all employees performance is managed to a great extent. In terms of expatriates, however, it turns that there are at least 5 different types of expats including top managers, middle managers, business establishers, and R&D project personnel. For each of these groups, there are certain common practices. For example, all the expats know what is expected of them, how well they are performing and what opportunities are for them to develop competencies in order to meet present and future job requirements. However, the various expats groups also experience some differences in how their performance is being managed. These differences revolve around the following: Whether and how performance goals are set, who sets them and what goals are set. How performance is evaluated and who conducts evaluation Whether training and development plans are agreed upon by the expats. Whether expats have the opportunities to attend training while they are on foreign assignments.

What type and how clear the linkage is between expat performance and pay For example, as might be expected, the higher the expats level more independent their position and more distant their performance management. In addition, they and their boses are more likely to have a long term focus on their international positions and in terms of their careers and developmental concerns. CONCLUSION: The present era, which is marked with the presence of global companies, has presented tremendous opportunities. The world has shrunk into a global village and melting down of barriers has brought to fore greater options for the managers. However, with these opportunities, also come some major challenges. The international perspective has changed the dimensions and has given wider interpretation to the functions of human resource. Right from staffing and placement, to training, performance management and legal compliance, the complexity has remained a major feature. The growing realization about the importance of role played by the human resource managers in helping the top management take strategic decisions is also shaping the way HR functions are viewed. New factors are shaping the trends that are likely to define the future practices. The challenges and opportunities are going to make the top echelons devise, construct, and design new and better ways of conducting business operations if they want to successfully establish themselves as global players in true sense of the word.