Standardization In International HRM

Introduction

The objective of this report is to discuss about the standardization and localization in International Human Resource Management (IHRM). The IHRM is based on the management of the activities of human resources at the global level. The IHRM is linked to providing administrative services to expatriates when selection, training and performance appraisal of local and the international employee are conducted on the priority basis. At this stage, the discussion of International Human Resource Management can increase knowledge and understanding as how it is useful in the improvement of the business operations of a company ate the global level. The discussion about the standardization and localization in the IHRM will provide in-depth information to use in business practices on the priority basis.

Standardization and localization in International Human Resource Management

Standardization in IHRM:

The standardization in IHRM is associated with conducting HRM practices with centralized decision making process in which subsidiaries are selected on the priority basis. The subsidiaries are the companies of a parent company involve conducting HRM practices effectively and efficiently. The headquarters of MNCs in the world usually promote the standardization in IHRM. The IHRM is highly concerned to manage human resource or workforce in foreign markets because of differences of the culture in the international boundaries than home countries (Bocean & Sitnikov, 2018). The standardization in IHRM is maintained in the same ways like parent countries. The standardization in IHRM is visualized by the MNCs as rational management initiative in order to transfer practices and policies of HRM at the international level.

The standardization in IHRM is adopted by the MNCs as a concept to perform in the international market effectively. Therefore, standardization in IHRM ensures the high quality organization works through developing relationships and bonding between HRM activities at the international level. The importance of standardization in IHRM can be seen as bring efficiency in the business operations in foreign countries. The MNCs get benefits in the business operations as maintaining control over diverse workforce and culture of the foreign countries (Bocean & Sitnikov, 2018). The standardization in HRM at international level is conducted to target the market and establish the company with effective market position.

The drivers/factors those are mainly responsible to increase the possibility of standardization in IHRM are the foreign trade, innovation, market concentration, etc. These driving forces in the international market force the MNCs to adopt standardization before any challenge in the HRM. The international business operations have HRM policies and practices different from the host countries of the companies (Bocean & Sitnikov, 2018). At this stage, international operations of MNCs always consider IHRM standards for best performance in the organizations.

Without consideration of standardization in IHRM, the competitive environment of globalization cannot be faced at all level. Therefore, the probability to achieve success in the international market cannot be seen without consideration of IHRM management. The IHRM is based on the actions and interests of MNCs that is closely allied with the strategic HRM. There are more opportunities for MNCs to adopt standardization in IHRM because of different social, political and cultural institutions and management systems. The internal turmoil needs to avoid in the MNCs when conduct operations (Chen & Wilson, 2019). Thus, the standardization in IHRM removes the state of confusion, disorder, and uncertainty of the companies in the global business management.

Apart from this, the standardization of IHRM is adopted by the multinational organizations for equality and mutual benefits. The MNCs insist to transfer the policies and practices in IHRM to protect its interests and inefficient or antiquated local practices. In order to gain operational efficiencies in the international operations, MNCs use standard HRM in order to guarantee their operational consistency in cross-countries (Chen & Wilson, 2019). The financial reporting, HRM and operational monitoring and reporting of the multinational organizations, all these activities can be successful after implementation of IHRM standardization.

Localization in IHRM:

In IHRM, localization also plays essential role for the MNCs that is considered by the management in cross-countries business operations. The localization in IHRM is associated with the adaptation of HRM practices by subsidiaries like the local firms in the host countries. The localization in IHRM is required to survive and face the competitive environment of the host countries. At this stage, the localization in IHRM is the key factors to run the business operations in the local setting (Chen & Wilson, 2019). MNCs that localize in the IHRM involve diverse practices in which a full range of HRM practices and policies are considered on the priority basis rather than expatriate managers from the parent company.

The multinational organizations in its IHRM, they follow all local legislation and labour markets guidelines from recruitment process and selection to the training development and reward structures. The structures for participation and influence in the organizations are also part of localization of MNCS in its IHRM. Further, the localization in IHRM adopts senior management belief structures, autonomy of local operations and diversity in order to make differentiation of IHRM practices. At this stage, an international enterprise in a host country operates the business operations through making a balance between standardization and localization in IHRM requirements (Chen & Wilson, 2019).

The consideration of local HRM policies and practices of the organizations in the international market is adoption of local culture that helps the subsidiary companies to achieve sustainability in growth and market share. Localization in IHRM removes the cultural differences and influences the management of the organization to spend time learning about the culture of foreign employees. This can help the organizations to handle various situations at the local level (Manila Recruitment, 2022). The familiarity with the local working environment, policies, and practices help the management to find out proper ways in managing business operations effectively.

Moreover, a company that runs the business in a foreign country and wants to take advantage to expand the business for a long time perspective, localization in IHRM needs to follow in every aspect of the business and HRM, such as changes and adaptation to the global HR model. The localization in IHRM is always viewed positive because MNCs get helps as greater responsiveness in the business operations (Manila Recruitment, 2022). The facts and valuable information of the market condition are collected at the local level by the MNCs that is the part of localization in IHRM.

Apart from this, the localization in IHRM requires certain changes in the company in order to adapt present condition of HRM of foreign country where business is in operations. The necessary changes in HRM of the company focus towards meeting the local needs and fit into the local economy when business is in other countries. It is beneficial to the company to adjust itself according to the present environment of the market and make a strong base of a successful company without any competitive pressure (Manila Recruitment, 2022). At this stage, localization in IHRM needs to adapt cultural environment, institutional environment, and subsidiary roles to improve business operations.

Conclusion

After discussion of the standardization and localization in international human resource management, it can be concluded that it has importance to achieve success in the global market easily. The headquarters of MNCs in the world usually promote the standardization in IHRM. The IHRM is highly concerned to manage human resource or workforce in foreign markets because of differences of the culture in the international boundaries than home countries. The localization in IHRM is required to survive and face the competitive environment of the host countries. At this stage, the localization in IHRM is the key factors to run the business operations in the local setting.

References

Bocean, C. & Sitnikov, C.S. (2018). SETTING INTERNATIONAL STANDARDS IN HUMAN RESOURCES. Retrieved from: https://www.mnmk.ro/documents/2015_X1/2-18-1-15.pdf

Chen, S. & Wilson, M. (2019). STANDARDIZATION AND LOCALIZATION IN THE HUMAN RESOURCE MANAGEMENT OF SINO- FOREIGN JOINT VENTURES: AN INDUCTIVE MODEL AND RESEARCH AGENDA. Retrieved from: https://www.agrh.fr/assets/actes/2000chen-wilson021.pdf

Manila Recruitment. (2022). Localization of Human Resource Management. Retrieved from: https://manilarecruitment.com/manila-recruitment-articles-advice/localization-of-human-resource-management/