Case study of Leisure Choice International
Internationalization vs Globalization of firms 2 2. Forms of Multinational Corporations 2 2. Multinational 2 2. Global 2 2. International 2 2. Benefits of the Global strategy 4 4. Challenges of going global 4 Conclusion 5 1. Introduction Adopting a global strategy is very important for Multinational Corporations that aim to succeed globally. Most Multinational Corporations find the challenge of balancing between taking a global strategy and adopting the local or host country’s policy. In the past, many firms chose international trade but due to the failure of international trade, most firms today are adopting the global strategy. Part B will look at people resourcing, performance and reward management about international managers. Part C will look at the benefits and limitations of the global strategy to Leisure Choice International and its HRM. Finally, there will be a conclusion and a list of references.
Part A 2. Globalization and Internationalization of firms 2. Companies start from the domestic market while at the same time setting up a strategy on how they will go international. Internationalization has led to severe competition among firms. There are a variety of reasons why firms go international. One of the reasons could be due to an inadequacy of the domestic market because of economies of scale. Others will go international because of the many opportunities foreign markets present. The function of subsidiaries as part of global operations. The parent country therefore requires them to follow HR practices that are global. The greater the multinational subsidiaries depend on the parent company, the greater the influence especially in recruitment and selection (Bjorkman & Ehrnrooth,1999). The parent company adopts global HR practices but puts into consideration local culture to attract the locals.
They face the challenge of deciding whether to differentiate their organizational structure for local competitiveness or to integrate it. International These are the types of companies who export their products to foreign countries for sale. They might also be involved in importing. However, international companies are not established in foreign countries (Iwan, 2017). Since these companies do not have establishments in foreign countries, decisions are made from the domestic country. The employees are also sourced from the domestic country where the company is following the policies and culture. For transnational subsidiary companies, there is little influence from the parent country on HR issues though they have to get the approval of the parent country The most significant challenge in going global is having to balance between local responsiveness and adopt an integrated approach to management.
There is a tendency to take the local strategies while ignoring the integrated plan. Being able to mobilize people to accept and adopt a new plan is quite hard. Effective change management needs to done with a lot of training on the importance of the integrated strategy. PART B 3. The choice on the other hand, involves choosing employees that have qualifications that are strictly related to the job requirements from the pool (Ines & Fernandes, 2016). In companies that are global just like Leisure Choice International. It is essential for an International Human Resource Manager to consider the three types of employees which are careful: a) parent country nationals These are employees that come from the parent country of the organizations. In this case, they will be employees for US which is the home country of LCI b) host country nationals These are employees who come from the location of the subsidiary company.
c) third country nationals These are employees who are from neither the parent country nor from the subsidiary location. They could have a tracking system that enables them to spot the most suitable candidate. However, other factors need to be considered like the language, cross-cultural knowledge, family and ability to adapt. One’s language skills need to be considered especially if they will be working in a foreign country. An individual’s ability to adapt to the foreign country should be looked at including willingness to work away from home. International HR Adopting a global organizational strategy requires that there be cross-functional interdependence (Boudreau, Lawler III, 2015). It is a competitive advantage. Having the right talent starts with the recruitment process. Once the organization attracts competent employee and hires them, the next thing is to help them grow (Sloan Management Review, 2015).
This can be done through numerous training sessions. They also need to manage their performance, compensate them and reward the best performers. The International human resource manager is responsible for ensuring that employees at the subsidiary companies are trained. They also teach expatriates for them to be able to do international assignments. Leadership and management development In training of the employee, human resource managers need to develop a particular group of employees who are global minded. They need to nourish leadership capabilities in them for a focus on future leadership. Globalization realities are now presenting organization with real challenges of developing leaders who can lead global organizations. They may also be rejected by the colleagues from the host culture, neighbors, and acquaintances.
Intercultural training ensures that employees have the cultural knowledge required to work across cultures. Cross-cultural training helps employees to achieve cultural awareness and can communicate well internationally. PART C 4. Benefits and challenges of going global 4. The benefit is that they will sell more of their products because their brand is known leading to an increase in profits. Economies of scale This is the benefit that comes from saving extra costs due to high volume production. Standardization of products could involve the sale of that same products in many countries (Anderson, n. d). This leads the company to produce high volumes of products leading to the reduction in unit costs. Lack of training for expatriates makes them experience culture shock which can affect their performance and hinder their communication with others.
For example, expatriates who come to work in Germany from say Australian subsidiary of LCI may experience some differences in the way business is conducted. In Germany, direct language is considered polite and a way of showing politeness. On the other hand, the indirect communication in China is considered polite and direct language can be regarded as rude. Host and parent country influences Global managers are required to have cross culture training and to understand the culture of the country they are in. Most MNCs focus on training a few employees who will lead globally. To be successful, they need to have a huge number of employees who can work anywhere in the world. Going global requires LCI have the right strategies to be able to fit in the international arena.
From the findings, it is clear about the challenges that multinational corporation face when it comes to adopting HR practices and policies. The parent countries influence most, and others get affected by the local HR practices. hrmonline. com. au/section/opinion/managingglobal-workforce-need-to-know/ BizJournal. benefits of international expansion. Online]. th edition. International Human Resource Management: Policies and Practices for Multinational Enterprises (Global HRM), Routledge. Devi, S. A balance of global and local HR policies. Online]. com/pros-cons-going-global-business-40458. html Human Capital Institute, 2017. Three steps to building an effective global leadership development program. online] Available at: http://www. hci. n. d). Strategy Structure and HRM Practices In Multinational Subsidiaries: European MNCs In A Developing Country Context Nathan, A. Key Steps for Better Training and Development Program.
online] Society for Human Resource Management. Emilia, F. Recruitment and selection in the expatriation process: Comparing perceptions between organizations and individuals. Organizational Management, pp. Sloan Management Review, (2015). Six principles of effective talent management. Online]. Deloitte. Available at: https://www2. deloitte. com/insights/us/en/focus/human-capital-trends/2014/hc-trends-2014-global-and-local-hr.
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