5OS04 People management in an international context

5OS04 People management in an international context is intended to provide practitioners working in people management in an international context with the opportunity to focus on the complexities and considerations that are important in this context.

CIPD’s insight

International Talent Management

As part of their overall people management strategy, organizations operating in a global environment must consider how they will identify, recruit, deploy, and develop talent on an international scale. While taking into account regional differences, a consistent approach is essential.

While it is important to maintain a consistent brand and approach within an organization, it is also critical that the skills and abilities of local employees in countries where the organization operates are not overlooked. A good talent management program will tap into the skills and abilities of all employees, regardless of location.

Culture and Working Environment

The way a company operates influences its employer brand, which helps to attract and retain talented employees who want to be a part of a great place to work and who will thrive in the business. We discuss international culture, the culture, purpose, and values found in SMEs, and how to develop an organizational culture using case study examples. https://beta.cipduat.co.uk/knowledge/strategy/resourcing/international-factsheet 

International Resourcing and Selection

HR practitioners in international organizations must effectively deal with the additional challenges of working in a global environment, whether they are recruiting overseas-based employees or relocating employees overseas.

The following link investigates the need for employers to plan HR resources and offers advice on how to use appropriate recruitment methods for international assignments, such as internal promotions, headhunting, and cross-national advertising.

https://www.cipd.co.uk/knowledge/culture/working-environment

Case study

You are a manager in the HR/L&D department of a large corporation that owns a well-known fashion store chain (Large Co). Your company has stores on the main thoroughfares of all major UK cities and is steadily expanding its presence in out-of-town shopping malls and airports. Furthermore, in recent years, the company has begun what is expected to be a significant overseas expansion with the opening of new flagship stores in a number of European cities. International online sales have also increased rapidly in recent years.

Your company recently acquired another organization (Small Co) that operates three high street fashion outlets in major Eastern European cities and also supplies garments to a variety of retailers in the UK from its factories as part of its overseas expansion plans. It has fifty employees at its Birmingham headquarters, 250 in its city stores, and over 900 in its factories in Tamil Nadu, India. There are now numerous opportunities for employees to relocate to Eastern Europe and India.

Your boss has asked you to write a professional article and briefing paper that will educate employees on the complexities of managing people in an international setting.

Preparation for the Tasks:

• To guide and support your work, refer to the unit’s indicative content.
• Consider how your evidence is presented; keep in mind that you are part of the People Practice Team for this.
• Make certain that the evidence gathered for this assessment is your own.

You will also benefit from:

• Reflecting on your own experiences with learning opportunities, training, and professional development
• Reading CIPD Insights, Fact Sheets, and other related online material on these topics

Don’t forget to:

• Fill out the front cover sheet and staple it to the front of your assessment.
• Use the bullet points below each task as headings and sub-headings so your marker knows where to start your answer.
• Make sure your filename includes your full name and assessment title.

The first task is to write an article

Your boss has asked you to write a professional article that will educate employees on the complexities of managing people in an international setting. All employees, both nationally and internationally, will have access to this. It should be formalized and include a variety of sources, research, and models.

Your article should be divided into three sections and cover the following topics:

Theme 1

• Investigate an international organization’s contextual factors (AC 1.1)
• Examine the motivations and benefits of employment in a global context (AC 1.2)
• Explain how convergent and divergent approaches can be used to inform people management policy and practice decisions (AC 1.3)

Theme 2

• Examine the factors to be taken into account when selecting and resourcing for international assignments (AC 2.1)
• Explain why people’s practices differ across international borders (AC 2.2)
• Examine the cultural and institutional differences that must be considered when managing international employees (AC 2.3)

Theme 3

• Assess the role of people practice in an international organizational context (AC 3.1)
• Consider how the international context shapes practices and policies (AC 3.2)

The second task is to prepare a briefing paper

As part of the effort to educate employees about the current changes, your manager believes that additional guidance regarding expatriates is required. You have been tasked with creating a briefing paper that addresses the following topics:

• Examine why companies hire expatriates for international work (AC 4.1)
• Explain the process of selecting, preparing, and managing expatriates for work-related overseas relocation (AC 4.2)
• Explain how people practices can aid in the re-entry and resettlement of international workers (AC 4.3)

This briefing paper must contain clear, easy-to-understand information that can be read by any member of the staff. It should include research and references, as well as educate the reader.

Answer

AC 1.1 Examine the contextual factors of an international organisation.

An International Organization is one that operates in multiple countries. Most of these International Organizations have branches all over the world, giving them a broad reach in terms of the number of employees they employ and the people they directly or indirectly affect. International Organizations may choose to have the Head Office in one country dictate the operations of the other branches around the world, or they may choose to be autonomous, with each branch operating independently from the Head Office. International firms must also state whether they will adapt their Head Office’s strategies and policies or whether they will be independent with their own market and region-specific strategies and policies.

Such decisions have an impact on how these International Organizations carry out their responsibilities, including supply chain management, recruitment and selection, employee retention, and coaching and mentoring. International firms may have leaders from their main office or regional leaders who better understand market needs and how to best meet them. Some International Organizations’ contexts are discussed below.

Goals and Strategies- The objectives and strategies for achieving them may differ depending on the nature of the International Organization. This is due to the various business settings and the needs and desires of the target market. The objectives may also differ depending on the preferences of the shareholders and stakeholders involved. For example, an international firm dealing in the provision of technology and electronic devices may have different goals in different markets; in some markets, the goal may be to reduce competition, whereas in another market, the goal may be to become a household name and increase market share. In this case, the strategies may include providing high-quality electronic products to differentiate themselves and reduce competition, while the other strategy may be to lower the prices of electronic gadgets to make them affordable to as many customers as possible in order to grow their market share.

Size- the size of the International Organization also determines how they conduct their global operations. The large multimillion corporations have the advantage of size, making it much easier for them to enter a given mallet and start their own branch with ease. This is not the same as smaller International Organizations, which may consider partnerships, joint ventures, and even purchasing smaller local forms in order to enter a new market. The scope of the firm’s operations in various countries is also determined by its size. The large international firms can spread out their operations to reach as many people as possible, whereas the small international firms can only operate within a specific space and environment. This limits not only their market share, but also the scope of their operations.

Technology- Some International Firms have very advanced technology that can link all operations to a centralized server, whereas others must operate independently due to the level of technological adaptation and integration to the Organization’s daily operations. International Organizations with advanced technology benefit from mass production and continuous production because they have the capacity and technical capability to do so. Due to limited capacity, capability, and space, smaller international firms must produce in small batches. The level of integration with the other systems also determines the firm’s competitiveness in their specific market. The extent to which employees are familiar with the system and the ease with which they can use the system effectively and efficiently to be productive is also referred to as technological capability.

AC 1.2 Assess the drivers and benefits of employment in an international context

The following factors influence employment in an international context:

Career growth and development- one of the primary reasons why people seek International jobs is the opportunities for career growth and development that these jobs provide. International jobs increase an employee’s exposure to the dynamics of their industry, making them more competitive in their market space. International jobs also allow employees to apply what they learned in university to actual business operations, providing a deeper understanding of their operations. This clear motivation encourages employees to be open to new ideas, strategies, and criteria that will greatly improve their overall performance.

Better pay- another incentive for international jobs is the competitive benefits and compensation that employees receive. The positions become very appealing due to the numerous allowances and benefits that International employees are entitled to. The salaries offered are very competitive globally and far superior to what employees would be offered if they remained in their home country. House allowances, travel allowances, entertainment allowances, and even school fees for their children in the new country are among the benefits enjoyed by International Employees. These benefits are very appealing to many people, and as a result, international jobs are becoming increasingly competitive and sought after.

Develop strong international networks- International jobs provide opportunities for employees to form strong international networks, which can be extremely beneficial. They allow their employees to interact with employees from other departments and share experiences, strategies, and policies, as well as learn from one another. This intelligence exchange is critical because it increases not only their employability by other International forms, but also their productivity at work (Europe Language Jobs 2020). These strong networks are formed and prove to be extremely useful when it comes to exchange programs and benchmarking, where employees (regardless of industry) learn from one another in order to improve their overall competitiveness, not just in their industry but also in the entire market.

According to the University of Reading (2021), the following are the advantages of working in an international context:

Improved cultural awareness- working abroad exposes employees to new and more dynamic cultures, which not only broadens their personal perspectives but also their professional skills as they face unique challenges that must be solved in the best interests of the company. The rich cultural diversity must be optimized to help employees better understand certain practices and recommend appropriate ways for them to use those opportunities to make their organization more productive.

Increases employee value- International employees are more valued by their employers than those who work locally. This is due to the fact that they represent the organization on a global scale, and as such, they are entitled to certain privileges, benefits, and allowances. This makes international employees feel valued, appreciated, and recognized for their efforts, leading them to stay longer in the organization to help the company achieve its goals and objectives.

Greater job opportunities- working for an international firm improves the look of its employees’ curriculum vitaes, giving them a market niche. This experience increases their chances of getting other similar jobs in the future. International jobs also provide employees with skills and competencies that other international firms seek.

AC 1.3 Explain convergent or divergent approaches to inform people management policy and practice choices.

The convergent approach in Human Resources advocates that when specific practices are used across different organizations and countries, they can produce amazing results. This approach contends that when organizations behave similarly around the world, they are more likely to succeed and grow at the same time. Management is also expected to act consistently across all countries, and the strategies employed will be similar in nature. The free flow of information across their geographical boundaries results in the establishment and practice of best practices. The convergent approach strongly encourages the use of technology because it allows multiple people to access the same information at the same time and use it to achieve excellence as well as high economic output (Strategic Management 2021). Convergent approaches inform people management practices by promoting the use of similar practices across borders in order to achieve the intended goal across borders simultaneously.

The divergent approach emphasizes the importance of having unique policies and strategies that are appropriate for the environment and their goals. This approach emphasizes the importance of organizations ensuring differentiation through all means in order to be as distinct as possible. According to the divergent approach, people management policies and practices must be customized and personalized to meet the needs of each market. Furthermore, because different organizations operate in different ways, they require different strategies for their operations and competitiveness.

AC 2.1 Evaluate the factors to be considered when selecting and resourcing for international assignments.

Some of the competitive factors to consider when selecting an employee for international assignments are as follows:

Physical and emotional well-being- the employee’s physical and emotional health must be assessed. The employee must be physically fit to cope with the climatic and environmental changes in the new country. Stable health also ensures that their productivity levels will be high, allowing investors to see a much faster return on investment.

Good command of the language- the employee must be fluent in the language spoken in the country to which they will be assigned. This reduces the possibility of misinterpretation or even misunderstanding. A good command of the language also guarantees the organization good negotiation practices that are all in the organization’s favor.

Employee who is qualified and experienced- the employee must be extremely qualified and fit for the job. This ensures the employee’s effectiveness and efficiency. Experienced employees can also deal with new challenges with relative ease. Qualified employees also have the necessary skills, knowledge, and competency to carry out their roles and contribute to the achievement of the organization’s objectives and goals.

Good leadership skills are required for employees who are sent on international assignments. This is due to the perception that they are self-driven, solution-oriented, and capable of making sound decisions for the benefit of the organization.

Easily adaptable to change- the international assignment requires an employee who can easily adapt to changes in culture and environment (MBA Knowledge 2021). Employees must be adaptable, open-minded, and optimistic in order to try out new strategies, policies, and criteria in order to achieve the organization’s goals.

AC 2.2 Explain why people practices can vary across international boundaries.

People’s practices differ across international borders for a variety of reasons. Religion, language, time concept, power distance, and masculinity and femininity are among them.

Religion- the religion of specific countries has a significant impact on how they conduct business. This is because religion dictates the policies, rules, and regulations that the country adopts, which have a direct impact on how international organizations conduct their operations. In some countries, certain days are considered holy days and holidays, and as a result, employees in that country do not work on those days, and the International firm must reorganize their schedule to align with those in the given country. Religion dictates the attire to be worn in other countries, which affects how the International Firm’s operations are carried out because employees dress how their religion expects them to and not necessarily how the Organization prefers.

Language- the various languages spoken in various countries have an impact on how business is conducted. In some countries, business negotiations and discussions are conducted in a straightforward and direct manner, and employees can approach management directly to address their concerns, whereas in others, negotiations and business discussions are conducted in a friendly and indirect manner, while soft skills and people management skills are considered. There is also a level of power, and employees are expected to direct their complaints and concerns to their immediate boss rather than to management (Intech Concept 2021).

Different countries operate at different times due to different time zones across the country. As a result, communication may be slow because operating hours and business days differ.

Power distance- the distribution of power varies between countries in some countries. In some countries, management is easily accessible to juniors, whereas in others, there is a significant power disparity. The greater the power distance, the slower the rate of communication and feedback provision, whereas the shorter the power distance, the better because the firm can easily make decisions and implement them quickly, and communication within the organization is simplified.

Masculinity and femininity- the various perspectives held about the interactions of the two genders- influence the rate at which international firms conduct business. In some countries, there is more masculinity, and as a result, the market is dominated by men, who perform the majority of the operations. In other countries, there is a balance in gender involvement in operations, so the International firm receives a balance of both genders.

AC 2.3 Evaluate the cultural and institutional differences to be considered when managing international people practice.

Among the cultural and institutional differences to be considered when conducting international trade are those listed and discussed below.

Collectivistic and individualistic approaches- some cultures are more collective, making decisions and strategies as a community rather than as individuals. In such cultural contexts, the International firm must consider doing what is right for the greater good of the community as a whole. However, in other societies, the individualistic approach is promoted, in which the society encourages each individual to work hard and make decisions that benefit themselves at the expense of others. These various approaches define how the International Organization will operate and achieve its goals while taking into account the cultural norms of that society in particular.

Uncertainty avoidance- some societies are risk averse, while others are risk takers. Risk-averse cultures tend to play it safe by only allowing International Organizations to act within known (safe) and limited scope, whereas risk-taking cultures advocate for innovation and creativity. International organizations in risk-averse societies grow at a slower rate because they only make calculated moves, whereas those in high-risk countries grow faster because they are innovative and willing to take risks to achieve their goals in diverse and creative ways.

AC 3.1 Evaluate the function of people practice in an international organisational context

People’s functions in the international organization concept can be classified as follows:

Selecting qualified and trained employees: People practice is expected to produce the most qualified candidates for international assignments based on the available position and the post’s requirements. These qualified employees may already be in the company or must be hired in order for the organization to maintain its competitiveness in the new country.

Meeting employees’ training needs: It is expected that the people practice will provide regular trainings to employees to ensure that they are up to date with the latest competencies, skills, and knowledge, which improves not only their individual performance and output, but also their career development. This provides them with the opportunity to advance their careers (Digital HR 2021).

Motivating: People practices must also motivate these international employees. This can be accomplished by providing them with appealing benefits and packages in order to keep them focused on their task. Motivation can also take the form of regular evaluations to determine where they need help and how they can improve their skills.

Employee retention: People practices must work to retain as many employees as possible in order to ensure that the International Organization’s values and skills are retained and optimized within the same institution.

AC 3.2 Consider the practices and policies that are shaped by the international context

The International context determines which policies and practices will be adopted by any International firm based on the country’s current Political, Economic, Social, and Cultural policies. The international context governs how international firms apply their practices and policies in areas such as recruitment and selection- they determine the best recruitment and selection procedures, how to communicate with successful and unsuccessful candidates, and how to best assess the candidate’s suitability/ compatibility to the job. The hiring process will differ depending on the International Context.

Employees are rewarded differently in different international contexts; some prefer monetary rewards such as cash and promotions, while others prefer non-monetary rewards such as benefits and subscriptions.

Data Protection – In some countries, information shared during recruitment and selection should only be used for those purposes, whereas in others, the organization is not required to keep such information confidential. Data protection is observed in some countries to protect information owners from unauthorized access to personal information and to protect their privacy, whereas confidentiality and privacy of personal information are not observed in other countries.

AC 4.1 Evaluate the reasons that companies use expatriates for international working

There are several reasons why multinational corporations prefer to hire expatriates for international positions. Some of them are assessed below;

Improve local market knowledge- because expatriates live and work in the countries where international firms are located, they have a better and clearer understanding of the current market conditions. With this knowledge, they can advise and devise strategies that are more likely to succeed in those countries than those devised by firms run from headquarters without taking into account the current state of affairs in those countries. It also reduces associated risks and improves the firm’s reputation (Linton 2017).

Instilling Organizational Culture- When expatriates go to live and work in those countries, they bring the values and culture of the main office with them. This ensures that employees in other countries learn about the Organizational culture and decide how to best incorporate it into their own culture for an enhanced and better experience for both employees and customers. Additionally, it aids in the transfer of knowledge and core competencies.

Develop Management Talent- When new leaders are appointed to lead the firm in different countries, they are given the opportunity to advance their careers. This opportunity allows employees to develop good managerial skills that will benefit them personally as well as the organization as a whole, because good leadership results in lower employee turnover as well as increased productivity and output.

Enhanced local control- expatriates ensure that exporting countries have adequate control over their own businesses. This is useful because it allows the Head Office to monitor business trends and suggest potential areas for improvement, while the local market can decide how far to implement the suggested opinions and concerns. This gives them more power to drive business, which leads to improved performance and increased competitiveness in their respective markets.

AC 4.2 Explain the process for selecting, preparing and managing expatriates for overseas relocation for work

Employees who are qualified and experienced should be chosen. These employees must be well-versed in a variety of issues, including how the other export country operates, their language, social standing, and culture. The selection process should be thorough to ensure that the best candidate for the job is not overlooked.

Preparation: Once a successful candidate has been selected, they must be thoroughly prepared. These preparations include ensuring that they have the proper documentation for their trip, training them on the export market culture and how to deal with it, as well as ensuring that they have adequate lodging and other travel arrangements before the expatriate can settle in their new environment.

Managing expatriates can be accomplished by focusing on international leadership development, matching technical skills with cross-cultural capabilities, and finalizing these expatriate jobs with intended repatriation processes (Black 2021). If the International firm is to benefit from their presence in the export countries, the right expatriates should be sent to the right destinations with the right objectives. Expats can also be managed by conducting regular reviews of their performance through appraisals to identify the areas that need to be improved in order to improve their performance and ensure a higher Return on Investment.

AC 4.3 Explain how people practice can support re-entry and resettlement of overseas workers     

People practice can significantly help its expatriates re-enter and resettle in export countries by:

Simplifying role selection and travel document preparation- the People Practice can help by facilitating the definition and description of jobs that expatriates will do in the export countries. They can also help expats obtain necessary travel documents, such as passports and work permits, to enhance their stay and travel experience. When the company gets involved in such operations, it makes it much easier for expatriate employees to re-enter and resettle in the new country.

Giving pre-departure health assistance: Medical tests and vaccinations are important because they ensure the health of the expatriate and their family. To perform well, expatriates must be healthy in order to avoid transmitting or contracting diseases that may be prevalent in the export countries.

Pre-departure orientation sessions: these are intended to help expatriates settle in their new countries. The orientation sessions provide guidance and direction on what is expected of them and how they should conduct their activities in their new workplace in accordance with the procedures that have been established. Expats must be informed and well aware of the various laws and regulations observed in those countries in order to avoid breaking the law and being arrested and prosecuted..

Culture readjustment- expatriates must readjust to the new culture and cope with it in order to not feel excluded. Culture readjustment may take some time, but it should be advocated for to ensure the expatriate’s comfort in the new culture so that they can perform their duties and help the firm achieve their objectives and goals.

References

Black 2021, “The Right Way to Manage Expats” Harvard Business Review Available on: https://hbr.org-the-right-way-to-manage-expats/  (Accessed on 27/07/2021).

Digital HR 2021, “18 Key Human Resources Roles” AIHR Available on: https://digitalhrtech.com/18-key-human-resource-roles/ (Accessed on 27/07/2021).

Europe Language Jobs 2020,”10 Reasons Why Finding a Job abroad is Awesome” Europe Language Jobs Available on: https://europelanguagejobs.com/10-reasons-why-finding-a-job-abroad-is-awesome/  (Accessed on 26/07/2021).

Intech Concept 2021, “The Role of National Cultures in Shaping the Corporate Management Cultures: A Three-Country Theoretical Analysis” Intech Concept Available on: https://www.intechopen.com/chapters/63695/  (Accessed on 27/07/2021)

Linton 2017, “The Importance of Expatriates in Organisations” Biz Fluent Available on: https://bizfluent.com-the-importance-of-expatriates-in-organisations/  (Accessed on 27/07/2021).

MBA Knowledge 2021,”Selection Criteria for International Assignments” MBA Knowledge Available on: https://mbaknol.com/selection-criteria-for-international-assignments/  (Accessed on 26/07/2021).

Strategic Management 2021, “Convergent, Divergent and Cross-vengeance of HRM systems in a globalised economy” Strategic Management Available on: https://strategicmgt15.blogspot.com/covergent-divergent-crossvegent-of=hrm-systems-in-a-globalised-economy/   (Accessed on 26/07/2021).

University of Reading 2021,”Benefits of International Careers” University of Reading Available on: https://reading.ac.uk/benefits-of-international-careers/  (Accessed on 26/07/2021).

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