Human Resource Management: Managing People in a Multinational Context by Peter J. Dowling - Book Report/Review Example

A bird’s eye view with a powerful vision: A book review of International Human Resource Management: Managing people in a multinational context A borderless world is a multinational world. For expatriates working in a foreign land it is as if at least two worlds are merging – this entails learning a lot of new details which in the their home countries are generally taken for granted as such simple behaviors are acquired over a long period of acculturation. The book by Peter J. Dowling of the University of Canberra, Australia and Denice E. Welch, Melbourne Business School, University of Melbourne, Australia provides us with a bird’s eye view of the complication in going international. Published by South-Western and Thomson in 2005, the book is not simply a guided tour on IHRM and its challenges, the 333 pager offers a powerful vision of a career life time involving international posting. International posting is no easy thing, According to the Journal of International Marketing, the international business climate is being fueled by emerging new economies and that companies in the international business scene are playing in very dynamic situations more so in areas with high instabilities and uncertainties characteristic of emerging economies. (American Management Association, 2006). This only means that the demand on an expatriate is not receding but actually is going up. And anyone who may be contemplating on career in management posted in a foreign land is advised to go over the book, IHRM: Managing People in a Multinational Setting. That is, if one wishes not to go blind on the universe of concerns and issues around IHRM. The book structure IMRM: Managing People… is divided into four parts. Part I takes us on the finer points in understanding the multinational context of a foreign posting. It relates how the field of HRM could be viewed in terms of related activities such as human resource planning, staffing, performance management, training and development, compensation and industrial relations. Part I also dissects through conceptual modeling the changes which may happen once the situation becomes multinational, when personnel could be divided into host-country nationals (HCNs), parent-country nationals (PCNs) and third-country nationals (TCN). It is not difficult to understand how a simple setting such as a workplace could be so culturally, possibly politically diverse as well. This diversity creates situations, which broaden the concerns of the human resource manager. Dowling and Welch narrates that relocation for example is not a simple moving from point A to B, but involves pre-departure training, immigration related documentation or travel papers, housing in the designated place of assignment, work arrangements including medical and details on social necessities for the expatriate’s family. To top this off is assistance to orient the expatriate on finances including changes in taxation structure. Providing administrative support to an expatriate could be complicated made complex by differences in culture and laws. Like Phillips (Accountability in Human Resource Management), Dowling and Welch observes that HRM, more so in the multinational context is in a position to shape the company policy as IHRM impact on the organizational ways of conducting business as it adjust to the multinational setting. Part II of the book concentrates on managing and supporting international assignments. If Part I explains the depth and breath of IHRM field, Part II focuses on a personnel in an international posting from recruitment, to training, to arranging compensation package to re-entry back to the home office. At this part of the book, focus sharpens on the individual as he or she went through the “u” curve of expectation and reality - tourist, culture shock, pulling up and adjustment. That critical point when the individual is likely to contemplate leaving or staying. Dowling and Welch underline the importance of performance, which is moderated by factors including inability to adjust to foreign culture, length of assignment, willingness to move, work related factors and psychological factors. This only means that HRM in such a context considers the complications in each point in the “u” curve, at the whole stay of the personnel in a foreign posting. This concern requires policies and Dowling and Welch are correct in pointing out the importance of stating all the relevant details as to the condition of hiring a personnel in an international set-up including possible changes in the compensation package and even career status after the posting or re-entry back to the mainstream in the home office. The third part of the book focuses on global HR issues such as relations of nations and economies, into the realms of international relations governing labor, finance and terms of conditions to operate. The authors present numerous examples wherein policy affects business, for example directives from European Union on the relationship of companies with labor unions are ably tackled. Different countries have different policies and ways of implementing its laws and priorities but making these items part of HRM may be over extending its realms though no doubt any expatriate should take such matters seriously. Here at this point, we could perhaps reflect on how far is the domain of HRM in a multinational context. Should it extend its concerns on industrial relations as the authors maintain or it should be left to the legal department to navigate through the nuances of legal relationships across borders? It may be contended that such policy differences are limiting factors defining how to operate in a particular country. The policy environment in a multinational setting and must be fully understood by a HR manager but industrial relations must foremost be tackled in the level of nation to nation. It may be argued that global level still boils down to people doing the negotiating and hence subject to the laws of human behavior but is this organic to IHRM? Making industrial and international relations part of the domain of HRM may result to an untenable position of being both player and policy maker. Finally, the last part of book is dedicated to going through cases and exercises, which lends a text book flavor to IHMR: Managing People in a Multinational Context. The cases are illustrative as it depict specific events with some cases totally unexpected or would seem unreal such as sexual harassment as in Case 3: “Keep Safe Ducky” presented in Part IV. The authors appear to be testing the reader on their grasp of the domain of HRM. Performance as major indicator As with Petters, the authors give emphasis to performance as one of the bottom lines in international business. Performance ties up the concerns and issues - as these undergo changes across the course of the career lifetime in a foreign posting. This is obviously clear but what should be clearer is the limits on performance, limits on expectation on an individual given a particular situation. Limits that should be determined by the company policy makers. Defining measures of performance could ensure success of operation as evaluations check possible problems but it would also do good to interpret such measures against the basic question of what work situation is acceptable. It is critical to have a measure of the total contribution of HRM to businesses and other organizations and what is usually measured is performance. This is logical, compute the contribution in terms of outputs and successful outcomes versus failures, but something more essential may be missed. I am referring here to the basic acceptability of the business situation. Here HRM practitioners may broaden their advocacy and dare to question business and corporate practices which may be inimical to the host country, and later on maybe to the home country’s interests. This I think should also be stressed, the role of IHRM in tackling world issues such as hunger, wars and environmental degradation along the context of fully developed concept of corporate responsibility. In this sense, the concern on industrial and international relations could be rationalized as an advocacy rather than a function of IHRM. But this is the macro even to the point of altruism and humanitarian. Related to performance is obviously the impact on the individual, that is career development. Dowling and Welch give importance to the future of an expatriate. Citing surveys comparing careers of expatriates with employees sans international exposure, the authors sound the alarm that some 35 percent of the respondents were not sure as to the impact of the foreign posting in advancing their careers. There are many instances when expatriates are by-passed on promotions and choice jobs back at the home office. To the authors this trend is unhealthy. They cited researches that showed the relationship between repatriate turnover and presence of a strong career development program and to the more unpredictable downswings and general health of the corporation. Following the line of thinking of the authors, it appears that the first step is really basic, the general health of the company. As much as survival and prospering in a foreign environment are the major considerations, it is really the basic which has to be settled first. How comfortable is the employee with his/her mother company in the first place? It maybe that as they say that when the going gets rough it is they who are grounded with their corporate identity and priorities who would likely stick it out. It may also be possible to say that a stable company is that which plan expatriation well and takes care of the career path of their employees. A match up of company loyalty and good company provision for employees personal and professional growth could be the winning combination especially in dynamic but could be tight situations confronting an expatriate. Twin impetus which could boost performance at the optimum if not heroic. Sharpen your vision It must be the complexity and texture of an international posting with the elements of jet setting, exotic venues - the visual, sound and even taste experience afforded by living in a foreign land which to some makes it attractive. But as the authors pointed out being prepared makes the experience less risky, more organized and less problematic. But nonetheless, IHRM is young and not fully appreciated with orientation and preparation lagging behind even in some established companies doing overseas business. Staffing, the heart of IHRM could be ticklish as it involves choosing from the national, home country or third country to fill certain positions. Dowling and Welch are clever enough to pose such problems as questions requiring not only value judgments but logical balancing of factors and presentation of different point of views – the company’s, HR manager ‘s and even the point of view of the expatriate who would be ultimately subjected to a change of working and cultural environment, the roller coaster ride on the “u” curve of acculturation while at the same time performing the task which was why the individual is needed. And this has to be taken into consideration against approaches to staffing which the authors identified as ethnocentrism (home office bias), polycentrism (merit system oriented), geocentrism (more global in approach), and regiocentrism (turfing). Here IHRM could be clearly seen as integral to a company’s operation at the level of policy formulation and strategizing on how to best go about its business in a foreign country or a multinational setting. Balancing these approaches to staffing is the first step in the process in the disposition of personnel, the first step in building an organization. Such a complexity could be not so obvious at the actual day-to-day activity of an HR manager or an expatriate and this is why one has to sharpen his vision. Combining the tenets set by the authors with the evaluative approach taken by Phillips could equip the would be IHR manager or expatriate the necessary tools to situate one’s self in a very dynamic world of international business. One item, which appears to be curious, is the assertion of the authors that a universal manager is a myth, which says a lot about the field of IHRM. Particularization or case to case appears to be the game but we also take note that IHRM is fast becoming confined in a legalese coating and its own jargon, balancing flexibility and structures. These are simple attempts by different regions to adjust to the emerging situation like the emergence of the digital economy, which more and more people in HRM are pointing out as creating an ironical situation of training other people to do your job later. Again, we are confronting those bottom-lines this time, question of competitive advantages and market positioning. We wonder then if this situation is related to wage issues, which are domain of economics. How could such contradiction in the world economy be resolved could be the future path in IHRM. The phenomenon of outsourcing points to information technologies as a sort of equalizer as far as access to jobs which two decades were not available except by migration. Obviously technological development had shaped how we conduct business, home country could easily dispatch its manager anywhere in the world. You have the jets to ferry these people. Arrangements could be done in a jiffy yet there is no quick and sure way of compressing the “u” curve or speed up the learning process in a foreign posting. Technology will continue to reshape world business but it would still up to people behind the corporations to push the right buttons. If we may add to basic advocacy of the authors, we suggest that multinational companies make IHRM: Managing People… as basic a reading as the company’s employee manual. References American Management Association, Journal of International Marketing. Journal of International Marketing, 2006 Read More