International Human resource management can be defined as ‘Identifying and understanding how multinational organisations manage their geographically dispersed workforces in order to leverage their H. R resources for both local and global competitive advantage. ’(Beardwell et al 2004). The objective of my essay is to explore the BRIC emerging economies, and come to a conclusion, on the implications for an Irish based HR Management system, working with these emerging markets. Emerging markets are developing countries this in itself creates its own issues in areas such as cost control, cultural issues and language issues.
Firstly it needs to be discussed, why these countries are so important, and the implications these have on an Irish based Human Resource management system. The most commonly used definition in the management literature is ‘Emerging markets are defined as low income, rapid growth countries using economic liberalisation as their primary engine of growth. (Hoskisson et al 2000) cited in (Sauvant, 2008). It can be seen that there has been a shift to knowledge based growth in emerging economies. As can be seen in (Sauvant, 2008) that we don’t have dual economies but triple economies in China and India. Sauvant, 2008). The BRIC are both the fastest growing and largest emerging markets economies. (Sauvant, 2008) They account for almost three billion people, or just under half of the total population of the world. (Sauvant, 2008). The BRIC have also contributed to the majority of world GDP growth recently. (Torrington et al 2011). There are many implications which will be discussed throughout the course of this essay such as competition between these emerging markets, emerging market strategy, flexibility between these markets and the cost control element between these markets.
There are many implications for an Irish based HRM working with these emerging markets in areas such as managing a diverse team, regulation and ethical awareness. There are many challenges of managing a diverse global workplace such as the BRIC emerging economies that will be discussed in this essay. The aim for HRM is to continue to up skill there staff and try and convince people to go and work in these countries. From an employee perspective, there are many barriers from entering into these economies the first being the language barrier. HRM needs to be aware of all the areas such as cultural and language issues.
HRM needs to try and help and meet employee needs in all of these areas. Not only do employers want to keep with the times in areas of training so do employees. HRM needs to be aware and understand key ethical issues and concerns. As economic growth in Europe and America is declining and struggling to reach the levels that it had in the past, emerging markets are starting to attract attention and become popular. (www. investec. ie). There are many challenges for HRM one of them being globalisation. Human resources are best positioned to help an organisation to be successful and bring its organisational strategy to life all across the world. Lundby and Jolton 2010) A company can gain competitive advantage by focusing on their employees key strengths, skills and talents (Lundby and Jolton 2010). Human resource systems and processes are designed to ensure the order and positioning between the companies strategy and the organisations efficiency. (Lundby and Jolton 2010). Human resources provides value in its ability to attract develop and keep the best talent for the company so that they maintain competitive advantage. (Lundby and Jolton 2010) There are many H. R challenges that businesses face in trying to manage globalisation and doing business with the emerging BRIC economies. Lundby and Jolton 2010) . Human resource strategies need to support and bring business strategies to life. In order to be able to do this HRM professionals must be fully aware and understand the business environment and the key talents in the organisation (Lundby and Jolton 2010). In a global environment all of this becomes more detailed and important. H. R professionals have many concerns one of them being the global economic market and labour issues to be effective but they must also be intimate with the local economic market and labour issues to be effective. Lundby and Jolton 2010) Some of the many challenges facing Ireland dealing with the BRIC emerging economies is trying to deal with these emerging markets in issues such as regulation and ethical awareness as well as legislation across these countries. (Lundby and Jolton 2010) The H. R professionals are trying to ensure that the right people are in the right roles and that there is an effective and distinctive cross cultural utilisation of talent. ( Lundby and Jolton 2010). Irish H. R professionals must try and focus on achieving a learning organisation to achieve competitive advantage.
Irish H. R professionals dealing with the BRIC emerging economies must understand that in a world driven by continuous change companies need to coach and mentor and train their employees on a regular basis so they can gain competitive advantage at all times so that these countries can continue to grow at all times. (Lundby and Jolton 2010) There are many implications such as competition within the emerging markets, emerging market strategy, flexibility which will be outlined and discussed below.
HRM is more relevant than ever as employees expatriating to countries such as India and China, HRM plays a key role in trying to help them, guide them, train them and provide assistance for them when needed. Management need to understand that between these four BRIC emerging economies huge differences occur, in areas such as language and culture. What may be seen as the norm in China might be frowned upon in India. The first implication for an Irish based HRM working with these emerging markets is the huge competition within the markets.
According to Torrington competitive pressures can be so strong in a market controlled and dominated by three or four major international players as it is in industries characterised by thousands of many smaller businesses fighting to maintain a small market share. (Torrington et al 2011). Competition within these emerging markets means that for Irish companies they would have to carefully select which market they were going to enter. They would have to think of issues such as cost, language and the culture. Growth in the emerging markets can be seen as a push force. This means that it is up to the organisations to seek these markets. Torrington et al 2011) There are differences in the extent to which organisations approach growth in emerging markets from a strategic perspective and their choices are driven by industry conditions and firm capabilities and the constraints of the institutional framework that managers confront. (Torrington et al 2011). Recent evidence shows that Brookfield global relocation services 2011 data shows that when asked to identify the three countries that are emerging as new assignment locations 7% of respondents rank China as the most common new destination followed by Brazil 7% India 5%. Sparrow 2012). The four countries China Brazil India and Russia remain the most challenging locations in terms of assignments failure rates. (Sparrow, 2012). HR planning needs to take place. They need to think whether they should enter the market quickly, if they enter quickly this has many implications for HRM as they will want to keep the best staff and this is costly for the business. They should look at more new emerging economies such as the BRIC economies. For example Diageo is an Irish company that went international.
This had many implications for HRM in areas such as what employees to send to the new country, HR planning and marketing issues. According to (Torrington et al 2011) managers working internationally give themselves major problems of coordination by adopting measures that they see as necessary for business success. On the one hand they have to encourage diversity of action so that what is done fits local needs. Flexibility is really important when you are talking about emerging markets as they are so large and competitive. Torrington et al 2011) Another implication for Irish companies working within these markets is flexibility between the labour force. Competition has led to increased volatility and unpredictability in an organisations trading environment. (Torrington et al 2011) The greater the degree of competitive intensity the more fleet of foot an organisation is required to be. Changes have to be made more quickly and more regularly resources being switched from one activity to another in order that opportunities may be seized when they occur.
Relating this back to Irish HRM, companies don’t know the culture of the markets they are entering into, there are so many unknowns between the markets. Irish HRM needs to plan more before they enter into these markets. The second most important functional and delivery strategy stems from an environmental force that would be hypothesised to necessitate demand context sensitive strategic decision making and this concerns the management of flexibility and IM policy. Sparrow,2012) Recently there has been an increased requirement for skilled expatriates to help build emerging international markets temporary and short term access to specialised talent to assist the execution of overseas projects in these markets and the need for highly mobile elites of management to perform boundary spanning roles to help build social networks and facilitate the exchange of knowledge necessary to support globalisation. (Sparrow, 2012)
Another inevitable consequence of increased competitive intensity, particularly for UK organisations which are obliged to compete with rivals in developing countries with much lower cost bases is a continual need to reduce expenditure and to keep control on costs (Torrington et al 2011). From a H. R perspective this means that less money is available for pay rises or bonuses . This poses a major problem in an era of tightening labour markets because that it means that an organisations capacity to buy its way out of a skills shortage is severely limited. Torrington et al 2011). In order to keep the best people companies will have to pay more for them this has a high cost impact for the business. In the beginning companies are still learning so they are going to make mistakes which will also cost them money. The third implication of increased competition from a HRM point of view is increased pressure for the function itself to demonstrate its own worth in terms of valued added and costs controlled. (Torrington et al 2011). Since the 50’s world output has increased dramatically.
This globalisation of economic activity is not just a major cause of greater competitive intensity. (Torrington et al 2011). There are many differences between Ireland and the BRIC emerging economies the first being that there are different processes and procedures which Irish HRM will have to adapt to. Even the way they do business in China is different to the way they do business in Russia and India. Employee relations varies differently between countries. For HRM internationalisation has created a need to understand and operate within organisational culture and institutional frameworks.
It has also required the recruitment of people in one country to move to another country and work which is known as the expatriation process. (Torrington et al 2011). As Diageo went international this meant a lot of Irish people moving abroad for work. Another issue is it is partly a question of being culturally sensitive in a general sense. Not only do organisations which are serious about diversity need to eliminate unfairness and discrimination. Companies need to be seen to do so, so that employees have the perception that they are being equitably fair. Torrington et al 2011). HRM needs to look at the employment regulation in each of these four countries in areas such as unfair dismissals etc. HRM will need to take more care to develop and then to maintain a reputation as good employers. ( Torrington et al 2011) Research undertaken proved that globalisation is not solely driven by organisations in developed countries. Mnc’s from the important BRIC emerging economies Brazil, Russia , India and China are expanding their influence on the global market through increased trade and foreign direct investment . Nance et al 2011). These new developments means the war for talent has increased (Nance et al 2011). Whether companies conduct business in developing or developed countries there is a growing scarcity of skilled managers and workers alike (Nance et al 2011). This is exactly why the human resource function practised by both managers and human resource professionals has become ever more important for recruiting retaining and developing workers at all levels as well as a group of managers who can perform their best anytime. (Nance et al 2011)
Human resources is the best positioned to help an organisation succeed and bring its business strategy globally. (Nance et al 2011). A company can gain competitive advantage by focusing on their employees’ strengths, talents and abilities. (Nance et al 2011). H. R tools and processes are designed to ensure the alignment between the organisations strategy and human capability. (Nance et al 2011). Human resources provides value in its ability to attract develop and retain the best talent for the business so they can achieve competitive advantage at all times. (Nance et al 2011).
Recently the study of human resource management in developing countries was overshadowed by that of international Human resource management. (Wilkinson et al 2009). As globalisation is increasing on a daily basis and its associated competitiveness as well as the privatisation of the public enterprises in developing countries, this is putting huge pressure on human resource management (Wilkinson et al 2009). Since the emergence of the developing countries such as the BRIC as important economic powers. It is now very timely to understand the nature of HRM in developing countries. Wilkinson et al 2009). There are many implications and conclusions for an Irish based HRM working with these emerging markets in areas such as managing a diverse team, regulation and ethical awareness. There are many concerns for HRM in areas such as language and culture. It is important to have the right people with the right skills in the business at all times. Bibliography: 1. Beardwell et al 2004 2. Sauvant,P. K (2008). The rise of transnational corporations from emerging markets. Threat or opportunity. UK: MPG Books. 333-375. 3. Lundby, K and Jolton, J (2010).
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