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Human resource management in multinacional companies

Por Marcelo M. Teixeira - aluno do Curso de Licenciatura em Ciências Sociais (UFRPE), e mestrando em Formação de Educadores (Universidade Independente de Lisboa), e Mariana Gonçalves Daher - Aluna do Curso de Administração de Empresas (UFPE) ,

The speed up growth of the business carried through in international scope caused the development of the literature of the International Human Resource Management, whose importance if makes gift in the multinationals companies, had to the fact of these to face concernments pressures and conflicts to the necessities that appear to conciliate global integration and local differentiation.

The body of literature on international human resource management (IHRM) has grown dramatically, resulting from the rapid growth in international business activity. The shift in focus from a domestic to a global business perspective has a profound impact on the corporate human resources management activities (Dowling, 1999).

Human resource management (HRM) is understood in the broadest sense of the term, encompassing all management decisions and actions that affect the nature of the relationship between the organization and the employees its human resources (Beer 1984). The effective management of organizations human resources is vital for the successful implementation of international strategies in multinational companies (MNCs; Bartlett and Ghoshal, 1989). In addition, the competitiveness of companies and even nations has increasingly been recognized to stem from the competence of their people and people management strategies (Pieper, 1990; Porter, 1990; Pucik, 1992).

All in all, the globalization of business has resulted in the increasing recognition of the value of a well-managed workforce and the evolution of the human resource function from being viewed as a support function to one of strategic importance. Research on HRM in an international context has been approached from a number of different disciplines, including amongst others human resource management, international business, cross-cultural management, strategic management, psychology, comparative management, and by both academics and practitioners.

Multinational companies face dual and conflicting pressures arising from the simultaneous needs for global integration and local differentiation in international companies, and the strategies developed to meet these challenges have important implications for the international HRM function (Prahalad and Doz, 1987; Schuler et al., 1993).

On the contrary, HRM strategies can, in turn, influence the achievement of organizational strategies. Striking a balance between the conflicting pressures for global integration and local responsiveness within the Multinational Companies (MNCs) and creating the appropriate level of globalness and localness is implicit or explicit in all the literature on HRM in MNCs. The relationship between the parent company and its subsidiaries is inherently prone to tension and conflict. But this happens because of the geographically and culturally differentiated nature of a multinational firm and at the same time the need to keep it as a consistent whole so that it can rationalize the use of its resources and serve its large and complex market more effectively.

However, the multinational companies manage to maintain a balance between the two.

In order for this to happen, for instance, Welch suggests that this requires the multinational company to operate at two levels: maintain a HRM orientation that enables local concerns to be addressed, yet develop a team of international staff who can be moved into and out of the various worldwide activities of the firm, and thus help tie the organization together.

The ever-increasing complexity and uncertainty in which MNCs operate creates a unique set of organizational, co-ordination and managerial issues for the managers of MNCs. Not least of these is the management of employees on a global scale. Corporations operating in a variety of national environments are faced with an incomprehensible variety of cultural and institutional specificities that make managing in a multinational context especially complex.

Dowling and Welch (2004), identify several significant differences between managing human resources in an international context as opposed to a domestic one. First, they argue that there is simply more HR work to be done when operating in an international environment, because the HR function must engage with a number of activities that would not be necessary in a domestic context including international taxation, international relocation and socialization, host government relations and language translation services. The international context also requires, they suggest, a broader perspective with international HR managers being forced to consider a wide range of variables in their decision-making. Concomitantly, such HR managers may also need to demonstrate a greater involvement in employees? Personal lives. This, they suggest, is particularly significant in relation to employees on global assignment as HR may have a role to play in relocation arrangements, health care arrangements, as well as issues relating to international assignees partner and family. They also point the dynamics of the subsidiaries? Labor market noting that, the workforce mix of parent country nationals, third country nationals and host country nationals will vary, depending on how mature the MNC is.

As the multinational matures, the reliance on expatriate employees as position fillers in subsidiaries reduces with the consequence that the HR emphasis for the subsidiary must shift from narrow issues concerned with the management of expatriates to a broader responsibility of incorporating issues concerning host or third country employees who will require a different HR focus.

Managing human resources in an international context also brings with it greater risk exposure which concerns not only the increased cost attached to expatriate assignment but also the increased cost of failure in an international environment (Scullion, 2001), factors which make the HR issues pertaining to these issues even more significant and broader external influences which as Dowling and Welch suggest might include pressures from governments and pressure groups that may take more interest in the MNC because of their high profile.

Think global, act local would be the best choice of managers in multinational companies. So, adapting a practice to account for the local restrictions while thinking globally would be the best thing to do.


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