This essay addresses the issues and examples of Human Resource Management (HRM) used as a competitive advantage in Multinational Enterprises (MNEs) through an international perspective. It dicusses the problems of Australia’s employment relations and its impacts on the Human Resource Management approach taken by MNE companies operating there. This is underpinned by the theories of competitive advantage being a necessary strategic choice which firms must accept not only to seek out a sustainable margin, but to satisfy a policy of balance work life to retain the workforce.
International HRM Practices: Emphasis on Australia
Introduction
This essay addresses the issues and examples of Human Resource Management (HRM) used as a competitive advantage in Multinational Enterprises (MNEs) via an international perspective. It analyzes the employment relations and its impacts on the HRM approach taken by MNE companies operating in Australia.
Tool of Competitive Advantage
Competitive advantage is a necessary strategic position which firms must possess and occupy against its competitors from being ousted in the industry. There are usually two forms of competitive advantage which include cost and differentiation advantage (Porter, 1985). This normally applies to the horizontal and vertical sections across the hierarchical structure in the company. HRM and related practices should be regarded as a key component that will provide that edge. Burke & Cooper (2006) found plenty of evidence to show that the use of effective HRM practices would lead to better staff motivation and thus performance that would result in a more productive organization and retentive workforce.
In this respect, skills that are valued will often be recognized and transferred to other roles that demand a fresh perspective. They continue to support the argument that if HRM focuses on increasing the talent pool with broad skills and self-monitoring abilities, this would result in a great strategic lever for the organizations and assist in reducing administrative and recruitment overhead costs. This likens to a system that recognizes problems efficiently with the confidence that such problems will self-correct without a need for top-down checks. But can such a system be totally realistic and intertwined with transparent and accountable values? Would this strategic lever lead to arrogance and contempt of the organization?
Empirical evidence shows that if such values and recruitment selection were accompanied with the ability to work immediately with minimal training, a well-defined job content, a career development based on specification and performance evaluation and payments based on external equity, then firms would be able to use such measures and approaches as a means of HRM innovation that are different from their competitors. One example as researched by Tze, Nickson & Baum (n.d.), highlighted the strategy and concept used by a service apartment as the first in the history of UK’s service industry that seemed to match the features of a firm looking for innovation. The employees are trained by the Mission Inn Possible Package (company training project) and granted power to deliver such service promises. Apart from these, the more complaints that an employee receives, the more they learn from mistakes, and the more attention is paid to preventing a repeat of service faults, and the less human resource activities are required to recover service failures. But would such a concept be suitable and easily applied in a context whereof MNEs do not readily encourage mistakes and self-empowerment? Thus, certain core HR traits which maintain advances in services and products quality are innovative strategies, but only if they are positioned appropriately.
International Perspective
However, Porter (1985) argues that any strategy is a race to one’s ideal position, the creation of a unique and valuable position, where a firm can differentiate itself for the targeted customer and add value by an asset of activities different than those of rivals. This can usually help even in an international context where remote organizations are set apart from their headquarters and the strategic lever can become more apparent in the implementation approach. This would apply in a case where certain first world nations practice the hiring policies of Equal Employment Opportunity. This would result in fair hiring practices that are non-discriminatory with little bias toward certain traits (Schuler & Jackson, 1999). Furthermore, there are many international organizations such as foreign banks and educational colleges that seek legitimacy of their status and products from super-ordinate accrediting agencies, many of these entities which are non-visible or non-existent in the firms’ parent country. To gain any form of advantage against other competitors, HRM must seek to ingrain a context of pluralist values into the culture of the organization that ensures and defines the desired outcomes.
This pluralist values can be attained from the perspective of international practices. As new firms become engaged in global transactions and commerce in new and unfamiliar countries, HRM can tap into a global base of talents that might not have been considered previously for international assignments. Walmart is a perfect example of a company that hires employees for immediate short-term and long-term international assignments. But in order to recognize these global challenges, HRM has to learn to manage the performance of expatriates from posting to return postings. According to Mabey, Salaman & Storey (1998), effective international HRM measures and approaches could bring the benefits of social responsibility, continuous learning, inclusive participation, and less reliance on one type of system. Such measures and approaches by definition are a combination of the ends for which the MNEs are striving to dominate a position of sustainability and growth for the company. But in many countries, such ends achievements and benefits are still considered as a ‘litany of wishes’.
Frequently asked questions
What is the main topic of the essay "International HRM Practices: Emphasis on Australia"?
The essay focuses on Human Resource Management (HRM) practices in Multinational Enterprises (MNEs) operating in Australia, specifically how HRM can be used as a competitive advantage from an international perspective.
What are the two forms of competitive advantage mentioned in the essay?
The two forms of competitive advantage are cost advantage and differentiation advantage.
How can HRM contribute to a company's competitive advantage?
Effective HRM practices can lead to better staff motivation and performance, resulting in a more productive organization and a retentive workforce. This can involve recognizing and transferring valuable skills, increasing the talent pool with broad skills, and reducing administrative and recruitment overhead costs.
What is the role of innovation in HRM?
HRM innovation, such as well-defined job content, career development based on specification and performance evaluation, and payments based on external equity, can differentiate firms from their competitors. However, the suitability of innovative HR practices depends on the context and the extent to which MNEs encourage mistakes and self-empowerment.
How does an international perspective influence HRM practices?
An international perspective enables HRM to tap into a global base of talents and manage the performance of expatriates. It can also bring the benefits of social responsibility, continuous learning, inclusive participation, and less reliance on one type of system.
What challenges do MNEs face in implementing HRM practices internationally?
MNEs may face challenges related to adapting HRM systems to suit the parent country's norms, creating HRM information systems in countries with limited informatization, and ensuring that human capital and structure are aware of international practices.
What is the impact of decentralized MNE structure on HRM strategies?
In a decentralized MNE without a pure global strategy, activities are loosely integrated from the parent company, and strategies adopted may differ, as long as they align with overall objectives such as profit-making.
What is the role of Equal Employment Opportunity in international HRM?
Equal Employment Opportunity ensures fair and non-discriminatory hiring practices in international contexts.
What is the example given in the text regarding the importance of training in innovative HRM?
The text mentions the strategy and concept used by a service apartment in the UK. The employees are trained by the Mission Inn Possible Package, and granted power to deliver such service promises.
- Quote paper
- Patrick Sim Puay-I (Author), 2013, The international practices of Human Resource Management and its emphasis on Australia, Munich, GRIN Verlag, https://www.grin.com/document/304215
