“The study of International Human Resource Management is fine if you are going to work in a large Multinational Enterprise, but has no relevance for individuals who are going to work in small firms”. Do you agree or disagree? Give reasons and appropriate examples to support your answer.

This paper sets out to show that the study of international human resource management is of benefit to individuals who are going to work in small firms whether in a management or worker capacity . It is noted that a “small firm” may or may not be multinational and for the purpose of this discussion it is assumed that the inference is that they are not. This paper will demonstrate that through showing that an appreciation of different approaches to work there can be benefits for the individual employee and the manager. Further benefits will be seen through demonstrating that strict adherence to accepted national customs and culture can have a negative effect on business success. There will also be a discussion on how individuals and businesses need to be aware of the increasingly multicultural nature of the British workforce.

To open this debate it is necessary to define what is meant by the term “international human resource management”. Investigation into the term suggests that the emphasis lies on how to operate the human resource management function in multinational businesses and that it is concerned with the similarities and differences of managing in different countries and how to integrate a business culture across international boundaries. However, it is found that little attention is given to the fact that the UK has an increasingly multinational workforce and whilst they may be subject to the systems, procedures and laws of the UK, they way they think and operate is strongly affected by their personal national culture which may vary significantly to that of the UK.

The BBC reports that “(a) record 582,000 people came to live in the UK from elsewhere in the world in 2004, according to government experts“ (BBC 2005, p. not given). They further suggest that this influx is necessary to help the UK economy grow as the majority of these migrants have come to the country to work. The Times newspaper supports this in reporting that “Britain needed workers for 600,000 vacancies, including low-paid jobs that were often difficult to fill“ and goes on to say that “(e)mployers are aggressively recruiting staff from other countries” (Nugent et al 2004, page not given). They also found that 96% of these migrants were employed in full time work (Nugent et al 2004). This shows that the UK workforce is becoming increasingly multinational and diverse.

The main arguments for the increase in awareness of international human resource management would seem to stress the pressures on managers working in multinational businesses. As an example of this, Trompenaars et al tell us that “(i)nternational managers have it tough. They must operate on a number of different premises at any one time. These premises arise from their culture of origin, the culture in which they are working and the culture of the organisation which employs them” (Trompenaars et al 1997, p. 3). However, the writer would argue that the same challenges also face those working in a solely UK based business as they become increasingly likely to be working with and for colleagues who originate from countries other than the UK and have different cultural expectations. To be able to ensure that the working relationship between groups is a productive and positive one, each individual would benefit from an understanding of some aspects of international human resource management especially in the area of culture where attitudes towards leadership, motivation, and pay and recognition may vary.

A further benefit of awareness of different human resource management practices may be the realisation that UK based businesses may be able to adopt positive aspects of other countries work practices and cultures. Mullins (2005) states, there are benefits to be found in a business looking at how it’s national culture may be limiting their ability to be strategically competitive. He continues by citing Trompenaars who felt that his own work “helped managers to structure their experiences and provided insights for them and their organisations into the real source of problems faced when managing across cultures or dealing with diversity” (Trompenaars 1999, p. 31. cited in Mullins 2005, p. 43).

Against the argument for individuals who are going to work in a small firm studying international human resource management is the range of areas such a topic covers. International human resource managers need to have an appreciation of the laws and policies of the countries their employer operates in and whilst this may of interest to a UK employee, it is not an area they would automatically be able to influence or change. This brings us to the questions of whether rather than international human resource management, what we are discussing is the management of diversity both from the point of view of a manager who supervises the work of a multicultural workforce or the case of an individual worker whose colleagues originate from a variety of cultural backgrounds.

Brooks supports this point and states that “(d)ifferences in national culture may have a bearing on how organisations deal with each other and also on behaviour within organisations which comprise a mix of nationalities” (Brooks 2003, p. 264).

Francesco and Gold say that “managers must develop organizational systems that are flexible enough to take into account the meaning of work and the relative value of rewards within the range of cultures where they operate” (Francesco et al 1998, p. 144) and whilst when saying this, they meant it to be applied to multinational organisations, the same can be said to be true of those working in a multicultural environment nationally based. Mullins agrees with this in saying that “there are a number of very good reasons why we could usefully understand cultural differences (and similarity) at work, based on new awareness contributing to our own effectiveness and moreover to the accomplishment of organisational goals” (Mullins 2005, p. 44). He goes on to say that “there could therefore be advantages of cross-cultural awareness which include: increased self-awareness; sensitivity to difference; questioning our own assumptions and knowledge; lessening ignorance, prejudice and hatred” (Mullins 2005, p. 44). As an example, a manager with a predominantly British cultural background may need to adapt their motivational techniques for individuals from cultures where recognition through praise is more highly regarded than a financial bonus. From the writers own experience, a common UK practice of publicising individual performance levels was found to be highly demotivating and a source of unease amongst a predominantly Asian workforce.

Adler suggests there are inbuilt dangers where multi-cultural teams operate “(m)istrust – including stereotyping; miscommunication with potential for reduced accuracy and resultant stress; process difficulties, that is failure to agree when agreement is needed or even what constitutes agreement when arriving at decisions” (Adler 1997, cited in Mullins 2005, p. 44). To overcome these potential issues, there must be an understanding and appreciation of the human resource management systems of other cultures as these will influence the work expectations and practices of the workforce.

The Chartered Institute of Personnel and Development (CIPD) see the embracing if diversity as being crucial. They say that “(t)oday, many organisations are out-thinking and outperforming their competitors by using diversity as a strategy for ensuring long-term success and advantage“ (CIPD date not known page not given). They support his view by adding that “(i)n the face of changing demographics, a narrowing talent pool and an increasingly global marketplace, nurturing the creativity, innovation and hidden potential of organisations is vital” (CIPD date not known page not given).

A further aspect to be considered is the legal requirement for companies to embrace diversity in their workforce. Since the 1970s there has been an increasing amount of legislation in the UK relating to pay equality and sex and racial discrimination. However, a CIPD survey found that 68% of respondents gave “legal pressures” as the key driver for diversity in their business (CIPD 2006, p. 3) suggesting rather than an appreciation of the business benefits of embracing diversity, the importance placed on these issues is due more to a fear of the negative publicity and costs associated with legal action as a result of discrimination.

The concept of international human resource management has been seen to be mainly the concern of individuals who are to intend to operate across geographical boundaries. It has been demonstrated however that there are many aspects of the subject that are not only applicable to those intending to work for a small firm, but could also benefit them in being able to encourage cultural diversity and adopt good practice from other countries. The increasingly multi national workforce in the UK and the introduction of legislation relating to diversity means that employers and employees must have an awareness of the areas of international human resource management that relate to understanding and embracing cultural differences.

References and bibliography.

Adler, N.J. (2001). International Dimensions of Organizational Behavior. California, USA: South-Western College Publishing.

BBC. (2005). Record immigration levels to UK. Accessed at: http://news.bbc.co.uk/1/hi/uk/4359756.stm on 7/03/2007.

Brooks, I. (2003). Organisational Behaviour: Individuals Groups and Organisations. 2^nd ed. Harlow: Prentice Hall FT.

CIPD. (date not known).The Psychology of Diversity. Accessed at: http://www.cipd.co.uk/CMSTraining/Psychology+of+Management/Psychology+of+Management/PCD.htm on 7/03/2007.

CIPD (2002). New research shows international HR managers create global culture. Accessed at: http://www.cipd.co.uk/pressoffice/_articles/20092002135000.htm?IsSrchRes=1 on 9/02/2007.

CIPD. (2003). HR’s Contribution to International Mergers and Acquisitions. London: CIPD.

CIPD. (2006). Diversity in Business: How Much Progress have Employers Made. First Findings. London: CIPD.

Francesco, A. M. Gold, B. A. (1998). International Organizational Behavior: Texts, Readings, Cases and Skills. Harlow: Prentice Hall FT

Lucas, R. Lupton, B. Mathieson, H. (2007). Human Resources Management in an International Context. London: CIPD.

Markides, C. Geroski, P.(2003). “Colonizers and consolidators: the two cultures of corporate strategy” in Strategy and Business. Fall Vol 32 p 46-55.

Mullins, L.J. (2005). Management and Organisational Behaviour. Harlow: Prentice Hall.

Nugent, H. Tendler, S. Patty, A. (2004). Foreign workers snap up the jobs that Britons on benefit reject. Times newspaper. November 11, 2004.

Trompenaars, F. Hampden-Turner, C. (1997). Riding the Waves of Culture: Understanding Cultural Diversity in Business. London: Nicholas Brealey Publishing Ltd.

Trompenaars, F. (1999). Trans-Culture Competence. People Management, 22^nd April, p. 31.

Trompenaars, F. Hampden-Turner, C. (2004). Managing People Across Cultures. Oxford: Capstone Publishing Ltd.