International Human Resources Management Strategies
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“Bayer” is a global enterprise involved in the fields of health care, nutrition and high-tech materials. The organization has subsidiaries with the workforce of 111,800 at December 2011 in Europe, North America, Latin America, Africa, Middle East, Asia (Bayer.com, 2012). It was ranked among the top 50 world’s most attractive employers in 2011. There are three subgroups and three service companies that operate independently. The subgroups and the service companies are run by the management holding company. 300 companies operate as fully consolidated subsidiaries all over the world (Bayer.com, 2012).
Challenges and Strategies of International Human Resources Management
As a global organization, “Bayer” has human resources comprising of almost all races, religions, tribes, and peoples of the world. This makes management of staff a lot more challenging than in a national organization. Francesco & Gold (1998) discussed approaches to managing and staffing subsidiaries that international companies use. The managers of top positions apply the following approaches:
- Ethnocentric approach. Strategic decisions, including staffing decisions, are made at headquarters while the subsidiaries have limited autonomy. They have to follow headquarters resource management practice. Additionally, key positions in foreign operations are held by headquarters’ personnel.
- Polycentric approach. Strategic decisions, including staffing decisions, are made at the subsidiaries. Subsidiaries have autonomy since personnel from headquarters are not versed in the peculiarities of local managing processes. Moreover, local senior personnel are not promoted to headquarter positions.
- Geocentric or global approach. The enterprises hire managers to run human resources policy, taking into consideration the diversity of employees’ cultural background. It means that a company intends to apply multinational management.
- The regiocentric approach is midway between the ethnocentric and polycentric approaches and also takes on aspects of the geocentric. The organization reflects a regional strategy and structure. The region has autonomy in making decisions. Staff movements occur within their regions.
As previously stated, Bayer’s subgroups and service companies operate independently, and each subgroup employs different strategies to achieve its objectives. Each subgroup and service company is represented by subsidiaries at different locations worldwide. “Bayer” applies the polycentric approach where topmost positions are filled by the directions of headquarters. Subsidiaries are free to fill all other positions.
Successful Approach Based on Culture
Treven (2001) stated “companies use expatriates for key positions such as senior managers, high-level professionals and technical specialists”. She further noted that many countries required multinational companies to hire a certain number of locals in order to operate there successfully. According to Treven, hiring local employee is always cheaper than bringing in expatriates.
In many African nations, multinational companies initially set up operations in an environment of no skilled labor. Most of the supervisor and management positions were typically filled by expatriates. The people accepted that successful companies were led by foreigners. However, more and more qualified locals can fill the top positions, taking into consideration the processes of globalization and education levels of the 21st century,. Multinational companies should hire locals to fill strategic positions. This strategy will help to benefit from the highly educated African workforce. The successful approach in Africa would be the regiocentric as it allows the multinational company to hire the best person for the job, considering opportunities to grow by transferring staff within regions. Moreover, employees would strive for better positions and thus be more productive. In some cases, the local workforce is highly trained. The potential employees do not have an opportunity to practice their skill as they do not get the jobs for which they are highly qualified. A regiocentric approach would give them an opportunity to use their skills and knowledge working in a company.
An ethnographic approach might lead to failure as Africans are becoming increasingly patriotic. African governments are also pushing citizens to choose local over imported products to support national economies. Moreover, the approach leads the company to appear foreign to locals and has a “disincentive effect on local-management morale and motivation” (Treven, 2001).
The best approach to apply nowadays is the geocentric approach. This would give the leadership of a subsidiary to employ the person most qualified for the job. Moreover, it establishes a pool of internationally experienced executives with exposure to diverse cultures from which the organisation can draw future leaders. If a company hires a foreigner to head a subsidiary, it should take into consideration some items. The human resources department should lay an effective orientation strategy. It will assist in acclimatizing to the new environment. In particular, human resources planning should include a strategy for understudying top posts. This will enable staff to apply for positions they would like to grow to, and begin training or grooming for those positions. Whenever a vacancy falls in the chosen post, these “trainees” can compete amongst themselves. The best qualified is then promoted to the position, according to the results of their performance.