RUNNING HEAD: International Human Resource Management

Issues of standardization and localization 1

INTERNATIONAL HUMAN
RESOURCE MANAGEMENT
Issues of standardization and localization

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 Issues of standardization and localization 2

Contents

Introduction .................................................................................................................................................. 3
Major concerns ............................................................................................................................................. 3
IHRM standardization and localization ......................................................................................................... 4
The issues of standardization and localization ............................................................................................. 4
Maintaining the balance of HRM .............................................................................................................. 4
Educational Training ................................................................................................................................. 5
Change and the innovation ....................................................................................................................... 5
Levels of standardization and localization .................................................................................................... 6
The major importance of HR role ................................................................................................................. 7
Fostering and cultivating Global collaboration: ........................................................................................ 7
Working with the managers: .................................................................................................................... 7
Building teams: ......................................................................................................................................... 7
Providing training:..................................................................................................................................... 8
Other HRM modules like cross border merger and acquisition ................................................................... 8
International alliances............................................................................................................................... 9
Conclusion ..................................................................................................................................................... 9
References .................................................................................................................................................. 10
 Issues of standardization and localization 3

Issues of standardization and localization in International Human Resource Management.

Introduction

The term internationalizing denotes the way of increasing the involvement of business in
international markets in order to be more competitive and expand their business beyond the
domestic territory. One must think globally and has the ability to understand cultures that exists
in host country if it plans to serve internationally. International Human Resource Management is
denoted as the collection of activities that focuses on managing the organization human
resources at the international level in order to achieve the objectives, mission and goal and also
gain competitive advantages over competitors at each level either national level or international
level. International human resource management involves various functions of HRM like
recruitment, selection, training and development, performance appraisal, promotions, payments
and rewards and many more at international level. It also aims at focusing on other activities like
skills management globally and expatriate management.

Major concerns

 International human resource management is highly concerned with the HRM issues that
involves international boundaries other than the home country.
 International human resource management is also concerned with the relationships and
bonding between the HRM activities in an organizations and the foreign external factors
in which the organization works on.
 International human resource management also includes comparative HRM studies. For
an example: How the companies in other countries like Japan, Thailand and Switzerland
make plan to upgrade skills of their employees are different from each other.

International human resource management is highly concerned about how to manage HR at

MNC i.e. Multinational Companies. It basically involves three major types of employees’ i.e.
Home country employees, Host country employees and Third country employees (Saleeth,
2010).
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IHRM standardization and localization

The characteristics of HRM in the internationalizing of the firm generally involves from
the initial strategic level of analysis in a multinational parent company. International HRM
initiative basically involves two major organizational levels i.e. multinational parent company
and their foreign subsidiary. It also involves maintaining a strong relationship between the two
levels. There must be a fit between the standardization and localization of multinational parent
companies policies and procedures and practices and host country. It often happens that the
multinational enterprises insist their policies and practices to be executed and transferred strictly
in order to protect their interest segments. MNEs also earn several operational efficiencies when
they export their standardized policies in order to take guarantee of the operational consistency in
international business. To standardize and socialize the new organization in many areas like
finance reporting, HRM and operational reporting and monitoring, key appointment must be
taken prior. International HRM standardization can be visualized as a rational management
initiative by multinational enterprise in order to transfer HRM practices and policies to
international operations with a concept that these standardized operations will perform and
product the better performance for both the partners (Wilson, 2003).

The issues of standardization and localization

Maintaining the balance of HRM

The issues of standardization and localization for MNEs is trying to maintain the balance
of HRM factors like strategy, structure, size of the firm and maturity in the firm. Every corporate
culture in an organization has a very strong impact on the standardizing because culture and
external factors of the local environment affect the operational mode and role on the localization
strategy. Today every MNC involves itself to standardize HRM practice in the most effective
and efficient way. But this is not beneficial for the whole workplace but it can be beneficial to
managers who works in a group at the cross boundaries of the firm. Maintaining globalization in
a corporate elements is quite easy and possible but the international organizations should
recognize that the while making those local adaptations and exceptions, standards are required
 Issues of standardization and localization 5

which drives localization (Steger, 2010). Localization is basically driven by the various cultural
and institutional environment factors which are observed in the local entity itself. National
culture is also the major factor in international HRM. Those cultures which are totally based on
the personal relations consider to value more compete balance on both the rewards i.e. intrinsic
as well as extrinsic. While the cultures which are based on the isolation or personal independence
only compete on extrinsic rewards. The pressure that are found in the institutes works as a
powerful influences on the practices of human resource and those institutions values and norms
are totally based on the features of the national business system (Ampalazz, 2014).

Educational Training

Other major issues involved is educational training. Educational training is the major
factor that is required for many countries. From the HR perspective, training and development of
the staffs in an organization plays a very major role because no organization can successfully
improve and grow unless their staffs are well trained. The main aim of training the staffs is to
increase the capabilities in order to perform the duties with full potential. To increase the skills
and potential of the staffs, several training methods should be organized. Some of the training
methods can be training with theoretical education, introduction to organization and job training.
The staffs who are trained have better knowledge about the products and the service offered by
the organization (UKEssay, 2015).

Change and the innovation

While untrained staffs are unaware about the change and the innovation and they also
have the feeling of low confidence. Providing training to the staffs improve and enhance strength
and ability to solve the issues that exists in the organizations, analyze them and provide the
solution regarding the same. It also aims at increasing the ability of the employees to perform the
certain task given to them. Now when it comes to international HRM, training employees is the
first major important factor to be considered because it have an impact on international business.
International HRM is managing the work across the boundaries and controlling all the activities
of it. If a company works internationally, but do not have well trained staffs, it will be very
difficult for the organization to achieve its objectives. Educating them and conducting training
 Issues of standardization and localization 6

programs will help them in understanding the policies and rules of the host country and then
working accordingly (F, 2015).

Levels of standardization and localization

To be competitive across the globe, MNCs should involve in making the decisions of
when to best make changes to the several subsidiaries in terms of standardization and
localization. Company must ensure that it should focus on the major core activities and
competencies and further replicate these major competencies across its subsidiaries because they
are key factor to separating themselves from their major competitors. In absence of this unique
trait, there would be very few to differentiate their organization from the major competitors and
would create problems in the success of the company (Potoki, 2010). In this competitive market,
it gives an opportunity to the competitors to gain market shares. In order to consider core
competencies, MNCs must use standardization because it makes the company to use its strength
and stand as a leader in within an industry. The factor core competencies must be used
selectively because not everything that exist in the company is considered to be under core
competencies. Whenever core competencies are not involved in an organization and when there
is need for the subsidiary to adapt some particular local cultures to be successful in the specific
field, then at that time MNCs should allow all the firms to conduct localization (Strano, 2011).
There are many strategies adopted by MNCs to standardize or localize. Some of them are 1) The
adaptation strategy which are adapted to meet market forces but they are never needed to the
degree of a localized strategy which means that the marketing mix strategy is a only changes and
varied when needed. 2) Worldwide segmentation strategy where the segments of the customers
exist across the globe and they can be offered a very standardized product. 3) Requirements of
sub global strategy when grouping the host country markets into small clusters which will be
similar and standardized based on the region. Each marketing mix strategies have their own
standardized product around the subsidiaries (S, 2011).

There is a great importance of the HR manager’s role in internalization in order to

achieve MNEs difficult and complex purposes. Managing human resource in a company in a
better way which is highly involved globally needs cultural awareness and the ability to respond
promptly to all the external factors that exists in the environment. Managing HR at international
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level requires motivating and employees that will inspire them to work with a collaborating
nature even though they don’t live in the same location. They should be able to work with a
mutual understanding in both the countries i.e. either in the home or in the host country.

The major importance of HR role

Fostering and cultivating Global collaboration: When companies start working at the
international level, HR professionals must be more realistic and generalist. They must be aware
of all the internal operations in the organizations and should work more on the personnel work in
a more effective way. The HR managers cares about the competitive advantages that prevail in
the organization and also helps to achieve profitability and economic factors in the difficult
financial times. They also aim at decreasing the employee attrition and getting participated in the
community too (Sanders, 2011)

Working with the managers: When companies shave become more globalized, HR
professionals also act as a business partners who are highly involved in interviewing and
recruiting new employees in the organization and then further providing training and
development programs. When a company operate its business on an international level, it will
require HR personnel who will work and cooperate with all the other managers in the particular
product line (Duggan, 2014).

Building teams: When a company in involved in the international business, it must ensure that
the business operations are working well together with all the other diversified team members. It
must be sure that all the members of the host country as well as all the members of the home
country should work as a single team in order to achieve the company s objectives, goals and
vision. The team members can be motivated and inspired by conducting and organizing various
workshops that will be related to team building and by promoting employees and also by
providing them rewards. Rewards can be in the form of monetary as well as in non-monetary. In
many of the organization, individual recognition plays a major role in motivating the employees
while it does not always prove to be true in all the organization. HR professionals helps to create
awareness and also helps us to know how a tram can work effectively and gain a huge profit
across the borders (Farndale, 2010)
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Providing training: HR professionals maintains an environment which is productive in nature

by ensuring that employees are well trained and have the enough skills to complete the task
assigned to them. The employees should accomplish the given job task with the best knowledge
and skills. HR professionals conducts training and development programs that helps employees
to get credentials for performing the several functions. They also make sure that the company
follows all the government rules and regulations properly (Gond, 2011). For an example: In
Europe, all the employees that work in an organization must follow the standards that are set and
gain a healthy and safe work place settings. The employees in an organization must be aware
about all the rules and regulations of the host country so that all the international operations must
be carried in a successful way (ZKjadoon, 2015).

Other HRM modules like cross border merger and acquisition

Cross border merger and acquisition is the deal between the domestic firm and foreign
firm in the target country. Today the trend of M&A is increasing day by day and has accelerated
with the globalization. In recent years, America and Africa are attracting maximum number of
cross border M&A which has taken place due to the combination of political gridlock in many
countries. Companies get involved in cross border M&A because they aim at gaining huge
incentive sin doing so. Or it can also be said that both the host country as well as home country
gains a huge advantage from the deal. Many domestic firms perform so well that the in the
emerging market that it attracts M&A and foreign firms to get involved in it. Apart from this, the
foreign firms also consider all the risk factors that are involved in the cross-border M&A like
political risk, economic risk, social risk and general risk. All these risks can be examined by the
risk matrix which helps to examine the risk factors involved in the company and its possible
outcomes to be determined as well. The foreign firms evaluate the M&A partners using the risk
matrix and calculate the potential whether to get involved in the M&A partners or not. If the
scored score is not appropriate then they will not be involved in M&A and if the score is good,
then they can be involved in M&A. the cross-border M&A also requires political support and
regulatory approvals because the deals cannot be done in the absence of these factors
(Chaudhuri, 2009).
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International alliances

International alliance is the partnership of two or more companies from different

countries. By setting up such partnerships, the company gain a competitive advantage. The
strength are combined together worked hard to achieve the objectives and goals set in an
organization (Li, 2015)

Conclusion

It can also be concluded that in order to get involved in the cross-border M&A, an
organization must be regulatory scrutiny about all the ownership patterns, rules and regulations
with the holding structures. Moreover complex decision that exists in the organization are taken
by the HR managers who are well trained and skilled enough to take any managerial decisions.
The role of HR professional is very vital in an organization because they are the one who
motivate and inspire other employees to achieve the desired objectives and goals. Today,
standardization and localization are widely used in an organization in order to separate
themselves from the competitors. It also provides an opportunity to the other competitors to gain
a competitive advantages.
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References

Ampalazz. (2014). Retrieved from what are the issues of standardization:

//www.coursehero.com/file/10948645/DQ2/

Chaudhuri. (2009). Retrieved from cross border M&A: challenges and opportunities in global business
environment: //www.eiasm.org/frontoffice/event_announcement.asp?event_id=664

Duggan. (2014). Retrieved from Role of Human Resource Managers in Internationalization of Business:
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11567.html

F, R. N. (2015). Retrieved from Staff training and development methods:

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4384864/

Farndale, E. S. (2010). The role of the corporate HR function in global talent management. Journal of
world business. 45(2), 161-168.

Gond, J. P. (2011). The human resources contribution to responsible leadership: An exploration of the
CSR–HR interface. Journal of business ethics. 98(1), 115-132.

Li. (2015). Retrieved from International Strategic Alliances:

www.oxfordbibliographies.com/view/document/obo-9780199846740/obo-9780199846740-
0063.xml

Potoki. (2010). Globalization–De-Localization. Report of the EPD Working Group.

S, B. (2011). Retrieved from Localization vs. Standardization: Global approaches to CSR Management in
multinational companies: //www.mba-
berlin.de/fileadmin/user_upload/MAINdateien/1_IMB/Working_Papers/2011/WP_6

Saleeth, H. (2010). Tutebox. Retrieved from What is International Human Resource Management?:
https://www.tutebox.com/2850/business/hrm/what-is-international-human-resource-
management/

Sanders, K. &. (2011). HR-line management relations: characteristics and effects. The International
Journal of Human Resource Management. 22(8), 1611-1617.

Steger, M. B. (2010). Retrieved from Globalization. John Wiley & Sons, Ltd.

Strano, M. H. (2011). GLOBALIZATION OR LOCALIZATION.

UKEssay. (2015). Retrieved from Key Issues Influencing Localization Commerce Essay:
https://www.ukessays.com/essays/commerce/key-issues-influencing-localization-commerce-
essay.php
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Wilson, S. C. (2003). Springer link. Retrieved from Standardization and Localization of Human Resource
Management in Sino-Foreign Joint Ventures:
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ZKjadoon. ( 2015). Retrieved from Importance of Human Resource Management for Business:
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