Multinational corporations continue to move away from being organised around self-contained or independent national entities, towards structures that integrate their businesses across borders.
However, while companies have conducted business internationally over many decades, there has only recently been an emerging research focus on globalisation as it impacts on the management of a firm’s global workforce.
Consequently, there remains significant potential to build greater understanding and to leverage competitive advantage in this area.
As the process of globalisation plays out, there are many who claim that we live and work in an increasingly borderless world. While this argument may have some merit, frontiers matter. Societies imprint heavy character traits on the way firms and employees behave and operate. This, of course, has significant implications for the way people are managed within international organisations.
Firms often want convergence and standardisation to achieve a consistent best practice across their business operations. This may be in the way they go to market, deliver customer service or manage risk. It may also be in the way they reward and manage the performance of employees.
However, societal effects have meant that the ‘DNA’ of European, Japanese, Chinese or American firms is often not easily compatible with a drive for consistency.
Consequently, while there are pressures to act globally, many managers act or want to act locally. In this sense, what prevails in reality is likely to be different.
Some argue that firms actually operate in a state of persistent diversity, and will continue to do so, with no one ‘best way’ that can be made to work in all locations.
For HR professionals this is important. Organisations that do not understand the nature of how international differences manifest themselves may see strategic objectives fail or not realise their potential as envisaged.
For example, managers can often know the importance of local capabilities that can differentiate and exploit local opportunities. Too many times however, they may have a headquarters operation that wants to homogenise the way they operate and, in doing so, undervalue their own subsidiaries’ capabilities.
This creates windows of opportunity for those firms that can understand the nature of globalisation and identify and effectively develop capabilities across international operations. Organisational practice and policies geared with a greater awareness of the impact of globalisation can be drivers in developing the capabilities that make a difference.
In this context, key international HR management issues have long been overlooked.
For example, ever since multinationals have sent senior executives overseas to build or run international operations, they have been likely to lose most of these key staff at the end of their assignment. This waste of talent and the huge costs incurred have not been addressed.
However, HR is now seeking to find solutions and drive change in important areas like this.
HR professionals want to develop greater understanding of strategic international HR management challenges, ideally before they have to engage with them as live issues.
They also want to obtain more formalised learning and development, something not provided currently in any cohesive form. By developing knowledge and expertise, they can move beyond their traditionally reactive and administrative role and become key decision makers in the deployment and utilisation of human resources across their global businesses.
King’s College and the Forum for Expatriate Management have recently established the International HR Management Academy (IHRMA) as a response to these HR needs.
The IHRMA will seek to explore key international HR business challenges such as current trends in the staffing of global multinationals; the impact of globalisation on managers; how firms address diversity challenges across international operations; and what opportunities and threats there are in developing a global employer brand.
The IHRMA will have a faculty drawn from leading academics from King’s and around the world, respected practitioners, and prominent industry figures within the international HR community.
For King’s, its aim is to help facilitate access to knowledge and research to help address key business challenges and encourage firms to identify solutions appropriate to their own circumstances.
For academy participants, it will be important for them to be able to work with academics and engage with industry experts and respected practitioners within the international HR community.
In this way, through the sharing of experience and expertise, new solutions to historic but fundamental international people management issues can be identified to help firms operate more effectively in an ever changing globalised world.
The IHRMA will launch its first learning and development programme, International HRM and the Global Corporation in March 2010. Further details can be found on the HRM Learning Board’s website.
by Stuart Woollard, managing director, King’s College London HRM Learning Board