Ihrm Report

Trends and Challenges of IHRM

Submitted to Alliance Business School 2009

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Aakanksha Agnihotri 08PG143 Akanksha Singh Arpita Bhadur Deepti Mallela Lupa Bora

Globalisation is a term much talked about in the media, most often by economists. It is having an increasing effect on national business as companies find themselves adapting to increasing homogenisation across the globe. This comes about as a result of increasing numbers of businesses expanding internationally and therefore having to standardise, among other areas, their HRM practises in order to gain the levels of control required to operate competitively. This trend to a single global market is causing many countries and regions to lose their own individual HRM styles in favour of more global practices which better suit the demands of this market. This includes both technological developments, staffing and personnel development, however at the same time problems are being faced along the way as globalisation resistance factors come into play in many different forms. From the view of political scientists globalisation is a process that leads to the undermining of the nation state and the emergence of new forms of governance. From the sociologists viewpoint globalisation is seen in terms of the rise of a global culture and the domination of the media by global companies. This global culture is slowly becoming the expected norm and it may well be the case that companies that do not take note and make the necessary changes may be left behind in the race for global survival. Global organisations are being forced to become more competitive. Globalisation of markets, changing customer demands and increasing product-market competition, people and the way they are managed acquire greater importance in the 21st century. International human resource management (IHRM) should be prepared to take the best skilled people worldwide regardless of their nationality. HR managers will have to build a standard framework that allows flexibility to develop and manage all different workforce options. This report discusses some critical issues and trends facing international human resource management (IHRM) in the 21st century. The main trends and issues revealed are HRM operating in a global organisation, the future generation and shortage of talented workers and the transformation of organisation structures in the 21st century. Some of the main issues having a significant impact on an organisation’s aspirations in the marketplace are globalisation, capitalism, technological change, international exchange rates, supply and demand, and aging populations. Organisations are faced with making important decisions every day, related to these issues and countless others, that affect their ability to generate profit in a competitive environment. Successful organisations are always looking for

a way to out-smart, out-produce or out-sell their competition; they are always looking for a way to attain competitive advantage. What are the future priorities of the human resource (HR) function? The answer to this question is not simple; there is no one 21st century priority for HRM. Rather, there are many different factors contributing to the HR functions and activities and these are constantly changing, as is business itself. HR needs to embrace these changes, and use them to its advantage. Wiesner and Millet (2003) point out that globalisation involves the integration of markets and nation-states enabling individuals, corporations and countries to move freely and quickly around the world, unimpeded by national borders reaching the world farther, faster, deeper and cheaper. Technology has freed HRM from the historical administrative tyranny they have had to carry as they have been provided with new tools to improved productivity and performance. People and organisations need stability and core values, even in a changing environment. They both benefit from fulfilling the terms of a psychological contract according to Miller & Cardy (2000). Another perspective is from Tzafrir, Harel, Baruch and Dolan (2004) that it is HR’s responsibility to ensure that employees feel valued and that they are important to the company. Broken psychological contracts can cause organisational problems such as loss of trust, anger and litigation. The term “sustained competitive advantage” is described as occurring when “competitors are incapable of duplicating the benefits of a firm’s competitive advantage and cease their attempts to do so” (Macky & Johnson) It is this “cease” period in the other firm’s attempts at duplication that signify a “sustained” competitive advantage. According to some researchers, there are two main criteria by which firms can achieve this sustainability of advantage; firstly, given the dynamic environment, they need to be able to continuously identify, upgrade, rejuvenate and reinvent valuable resources. Secondly, they need to have the ability to create an environment in which they can be self-reinforcing and enhancing in value and strength, thus causing sustained major cost disadvantages to imitating firms. The recent public scandals of corporate malfeasance have heightened this need and organizations face numerous ethical issues. Strategies such as codes of conduct, developed by various international entities, can guide multinational corporations in this effort.

Iraj

Mahdavi also in Journal of Academic and Business Ethics analyze various ethical climate

and ethical problems. Author concludes that a global code of ethics, developed and enforced by an international agreement is the best means of bringing ethics to international businesses. Now we discuss issues that are engulfing IHRM practices. •

International Business Ethics and HRM:

Importance of ethics in the business world is superlative and global. New trends and issues arise on a daily basis which may create an important burden to organizations and end consumers. Nowadays, the need for proper ethical behaviour within organizations has become crucial to avoid possible lawsuits. The public scandals of corporate malfeasance and misleading practices, have affected the public perception of many organizations (e. g., Enron, Arthur Andersen, WorldCom, Satyam etc.). As multinational companies expand globally and enter foreign markets, ethical conduct of the officers and employees assume added importance since the very cultural diversity associated with such expansion may undermine the much shared cultural and ethical values observable in the more homogeneous organizations (Mahdavi, 2001). Although understanding of other cultures and recognition of differences among them will enhance the cross-cultural communication, it may not be sufficient to provide viable guidelines of proper ethical behaviour in organizations. Thus, concerns about unethical behaviour of corporations in other countries, are manifested in legislations such as The Foreign Corrupt Practices Act of 1977. International codes of conduct are analyzed in four entities: (1) The Organization for Economic Cooperation and Development (OECD), which is the primary policymaker for industrialized nations, (2) The International Chamber of Commerce (ICC), which is concerned with fair treatment among multinational corporations, (3) The International Labour Organization (ILO), which is concerned with direct investment in developing countries, and (4) The Centre for Transnational Corporations (CTC), whose objective is to maximize the contributions of transnational corporations to economic development and growth and to minimize the negative effects of the activities of these corporations. In a survey of 300 multinational corporations, 80 percent agreed with seven items being ethical issues for business: (1) employee conflict of interest, (2) inappropriate gifts to corporate personnel, (3) sexual harassment, (4) unauthorized payments, (5) affirmative action (6) employee privacy; and (7) environmental issues

1. Ethical Climate & Ethical Problems Strategies, such as these codes of ethics, are only one means of achieving the ultimate goal of having ethical international responsibility in the engagement of business worldwide. As stated above, there are many ethical responsibilities faced by multinational organizations. Theorists generally agree that situational variables such as organizational climate can affect ethical behaviour of individuals. However, there have been no attempts to study the relationship of ethical climate of an organization and ethical behaviour of its members. Ethical climate, it must be emphasized, is not the same as culture is commonly perceived, but rather a broader concept of culture. Culture is believed to be more associated with deeper beliefs, values and assumptions. Therefore, just as one can value an individual’s culture by his or her actions and personal activities, ethical climate can be observed on a larger scale; in this case, the organization. Ethical climate is, in essence, the employee’s perception of the norms of an organization. As researches have shown, organizations with a strong ethical climate experienced few serious ethical problems, and were more successful coping with such problems. Their research suggests that it is imperative for managers to consider developing strong ethical climates if they aim to provide organizational members the ability to handle ethical dilemmas and to avoid any inherent liabilities. Managers must create and maintain a clear and strong set of norms to promote good ethical behaviour. In this approach, a person’s own beliefs and values and their influence on his/her perception and behaviour are not taken into account. Nonetheless, ethical climate is a very potent tool in steering the behaviour of an organization’s members. As Mahdavi has shown (2003, 2005), an organization’s codes of ethics and enforcement of rules go a long way to control and direct behaviour of social entities. Based on the above discussion, global corporations must recognize the need for a uniform code of business ethics since without such a code, behaviour of actors in this arena remains unpredictable. Furthermore, national governments must realize that probably the most effective means of protecting their citizens, their national interests, and the global environment against the ravages of the over-reaching global business rest in the development, adoption and enforcement of such a code. Until then, it is not realistic to hope for any such international agreement to be adopted. However, a growing momentum for such a movement is observable. As stated in previous pages, international organizations,

especially those involved in international business, finance, labour, economics and environment are developing rules and policies that can be regarded as the building blocks of a universal code of business ethics. Until such a uniform body of rules is drawn, signed and enforced, global corporations and organizations will be doing well to develop their own codes of conduct, applicable to all of their officers regardless of location. Examination of the recent development in the international trade and the far-reaching expansion of global entities lead the author to the inevitable conclusion that ethical issues and concerns facing business entities are no longer related to the limited frameworks of national or even regional arenas. These issues have assumed global dimensions and as such require global solutions. To that end, it is postulated that probably an international organization is the best vehicle through which a code of ethics covering all aspects of business can be developed. Once- on the basis of such a code- an international treaty is drafted, signed and ratified; it may be prudent to leave the implementation of the treaty to the member nations subject to regular audit by an independent international body. WTO may eventually take on this role. Meanwhile, global organizations need to develop and enforce their own codes of ethics specifically directed at the issues related to a multicultural, multinational business environment. •

Change Management

Change Management remains as one of the most prominent agenda of those involved in managing organizations in the restless world, where ‘only the paranoid survive’ according to former Intel Corporation Chairman, Andy Grove. The changes are brought on by ongoing changes in technology and accompanying rationalization among core production activities. The human consequences of change may invite careful reflection by those who aspire to set and guide multinational managements’ approach to human resource strategy. Although our socialization onto a community may equip us to accommodate change as a natural part of human life, it becomes an issue of concern when change is unexpected, imposed and fast paced whether it stems from acts of nature, or from a hierarchy of investors and management interests, organizing their interests as part of the restless flight of capital. •

Operations of HR- Staffing

The global era has arrived with information ubiquity and sensitivity. Just as organisations compete globally for products, so they will compete for talent in the 21st century. From the

authors’ perspective the future talent will be a savvy generation; they will be young, highly educated seeking huge benefits and monetary rewards for luxuries. They will research the company they intend to work for; their organisational commitment and loyalty will be as long as the organisation can keep satisfying their needs. Recruitment companies according to Taylor (2001) are reporting the arrival of a new breed of highly skilled workers, they are younger, well educated, knowledgeable, extremely confident and not just interested in what they can do for the company, but rather what the company can do for them. Theunissen (2007) mentions that even though some countries have less tolerance for foreign managers, International human resource management (IHRM) should still be prepared to take the best skilled people worldwide regardless of nationality. Brewster et al, (2005) state that, “The management of international assignments remains a critical component of effective global HR particularly in relation to the use of international assignments as mechanisms for developing global leaders” (2005, p. 18). However, Rhinesmith (2007) proclaims that HR professionals often make mistakes believing that going global means you hire locals to run local businesses, in fact this is a multinational approach and not a global approach and that the balance between expatriate and local talent is going to be an interesting evolution in the 21st century. Following is a model that describes the staffing in the new era.

According to Henson (2007) Generation Y employees seek flexibility in their work hours so they can spend time with their children, Baby Boomers want freedom to work part time, as many want to retire early but still want to hang on to their health care and other benefits. Therefore, HR managers will have to build a standard framework that allows flexibility to develop and manage all different workforce options. HR managers will have to plan for outsourced suppliers, fulltime, part-time, and temporary workers in a global business environment that will entail diverse, highly educated and skilled people. HRM need to look at how it develops their existing workforce that will be the future workforce so people would

want to stay with the organisation. In this way the organisation could keep their competitive advantage. HRM will be expected to design the components of a HR system that is consistent with the elements of the organisation’s architecture, strategies and goals. Collabouration may be vertical between managers and employees, horizontal between business units as a network, and personal between individuals in a team (Losey, 2005).

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Subsidiaries Management And Human Resources Practices

Regarding the country of origin (COO) effect, we have focused on the strong impact that multinational corporations have on management practices in their foreign subsidiaries, through their ethnocentric or national systems strategy. According to Van Tulder (2005; cited by Harzing and Noorderhaven) "even the most global MNC's in many respects still appear to be strongly rooted in their country of origin". The ethnocentric approach by MNCs is an example of "cross national isomorphism" (Ferner, 2007), which occurs when MNCs successfully transfer COO management practices into host country operations. Despite the impact of the globalization process, which increases the connectivity and interdependence of the world's markets and businesses (Scholte, 2007), the ethnocentric strategy is still used nowadays by MNCs. Another detectable COO effect is the use of expatriates by the parent company. The continued hiring of home country nationals for key management positions aids in preserving the COO effect. According to Ferner (1997; cited by Harzing and Niels, 2003) the management preferences of the home country nationals will become embedded in organizational cultures, procedures and processes in their foreign subsidiaries. The standardization of management policies is another COO effect. According to Kopp American MNCs can measure and reward manager's performance in their foreign subsidiaries. Thus we realise that subsidiaries are still predominantly controlled by the parent company nationals. This trend should change in favour of host country nationals to have a diverse workforce which brings in creativity and encourages the local workers. There are three reasons for this trend: (1) Hiring local citizens is less costly because the company does not have to worry about the costs of home leaves, transportation, and special schooling allowances. (2) Since local governments usually want good jobs for their citizens, foreign

employers may be required to hire them. (3) Using local talent avoids the problem of employees having to adjust to the culture. In many cases, U.S. companies want to be viewed as true international citizens. To avoid the strong influence of the home country, companies frequently change staffing policies to replace U.S. expatriates with local managers. In Honeywell’s European Division, for example, twelve of the top executive positions are held by non-Americans. Over the years, U.S.-based companies, in particular, have tended to use more third-country expatriates. For example, when Eastman Kodak recently put together a launch team to market its new PhotoCD line, the team members were based in London, but the leader was from Belgium. It should be recognized that while top managers may have preferences for one source of employees over another, the host country may place pressures on them that restrict their choices. Such pressure takes the form of sophisticated government persuasion through administrative or legislative decrees to employ host-country individuals. •

Cross-Culture Management

Today, managers have to deal with people from different countries, whose culture is completely different from that of the home country. To manage a diverse workforce, a manager has to have a proper understanding of the expectation and needs of each individual, which will ultimately give a happy workforce. Previously, it was thought that workforce diversity leads to garbled and distorted communications. Today, many organizations have realised that diversity can be an asset, which can enhance organizational effectiveness as well as International Human Resource Management easier. It proves to be an effective means of competitive advantage. The world is shrinking in terms of communication, ideology, culture differences and politicoeconomic ideas, and in the process, getting substantially homogenized. Yet now, more than ever, people especially in the corporate world are feeling the need for better understanding of cross-cultural issues and its impact on the organization. Culture has a strong influence on people as it dictates how we perceive, understand and communicate ideas. This can impact organizational transactions, both internal and external. Sometimes situations can be perceived by two individuals coming from different cultures/countries in totally different manner. Hence we find that cross culture management is

now a major concern for the corporate world. It is a necessity that has emerged due to work diversity. Techniques to manage diversity  Create a broad environment: organizations which are engaged in discriminations fail in the long run. Thus an open culture should incorporated to help the create knowledge sharing environment.  Respect different values, beliefs, attitudes and behaviours hald and shown by a

diverse workforce.  Communicate commitment to all staff: there should be clarity in communication.

Commitment from he top management towards value diversity is must.  Involve all when designing the program: participative culture should be promoted and be encouraged to take part in decision making process.  Practice fairness at work: provide equal employment opportunity and hire people on their merit. •

Women Going Abroad

Traditionally, companies have been hesitant to send women on overseas assignments. Executives may either mistakenly assume that women do not want international assignments, or they assume that host-country nationals are prejudiced against women. The reality is that women frequently do want international assignments--at least at a rate equal to that of men. And while locals may be prejudiced against women in their own country, they view women first as foreigners (gaijin in Japanese) and only secondly as a women. Therefore, cultural barriers that typically constrain the roles of women in a male-dominated society may not totally apply in the case of expatriates. Importantly, in those cases where women have been given international assignments, they generally have performed quite well. The success rate of female expatriates has been estimated to be about 97 percent--a rate far superior to that of men. Ironically, women expatriates attribute at least part of their success to the fact that they are women. Because locals are aware of how unusual it is for a women to be given a foreign assignment, they frequently assume that the company would not have sent a woman unless she was the very best. In addition, because women expatriates are novel (particularly in managerial positions), they are very visible and distinctive. In many cases, they may even receive special treatment not given to their male colleagues.

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Training and Development

Although companies try to recruit and select the very best people for international work, it is often necessary to provide some type of training to achieve the desired level of performance. Over time, given the velocity of change in an international setting, employees may also need to upgrade their skills as they continue on the job. Such training may be provided within the organization or outside in some type of educational setting. 1. Skills of the Global Manager If businesses are to be managed effectively in an international setting, managers need to be educated and trained in global management skills. A recent Korn/Ferry study of 1,500 CEOs and senior managers found that one of the biggest concerns is that by the year 2005, there will be a critical shortage of U.S. managers equipped to run global businesses. In this regard, Levi Strauss has identified the following six attributes of global managers: (1) able to seize strategic opportunities, (2) capable of managing highly decentralized organizations, (3) aware of global issues, (4) sensitive to issues of diversity, (5) competent in interpersonal relations, and (6) skilled in building community. 2. Content of Training Programs There are at least four essential elements of training and development programs that prepare employees for working internationally: (1) language training, (2) cultural training, (3) career development and mentoring, and (4) managing personal and family life. 3. Training Methods There are a host of training methods available to prepare an individual for an international assignment. Unfortunately, the overwhelming majority of companies only provide superficial preparation for their employees. Lack of training is one of the principal causes of failure among employees working internationally. In many cases, the employee and his or her family can learn much about the host country through books, lectures, and videotapes about the culture, geography, social and political history, climate, food, and so on. The content is factual and the knowledge gained will at

least help the participants to have a better understanding of their assignments. Such minimal exposure, however, does not fully prepare one for a foreign assignment. Training methods such as sensitivity training, which focuses on learning at the affective level, may well be a powerful technique in the reduction of ethnic prejudices. The Peace Corps, for example, uses sensitivity training supplemented by field experiences. Field experiences may sometimes be obtained in nearby “micro-cultures” where similarities exist. Companies often send employees on temporary assignments—lasting, say, a few months--to encourage shared learning. These temporary assignments are probably too brief for completely absorbing the nuances of a culture; however, companies such as Ferro and Dow use them to help employees learn about new ideas and technologies in other regions. 4. Deve1oping Local Resources Apart from developing talent for overseas assignments, most companies have found that good training programs also help them attract needed employees from the host countries. In less developed countries especially, individuals are quite eager to receive the training they need to improve their work skills. Oftentimes, however, a company’s human capital investment does not pay off. It is very common, for example, that locally owned firms hire away those workers who have been trained by the foreign-owned organizations. Managers of American subsidiaries in Mexico have been heard to complain that “they must be training half the machinists in Mexico.” 5. Apprenticeship Training A major source of trained labour in European nations is apprenticeship training programs. On the whole, apprenticeship training in Europe is superior to that in the United States. In Europe, the dual-track system of education directs a large number of youths into vocational training. The German system of apprenticeship training, one of the best in Europe, provides training for office and shop jobs under a three-way responsibility contract between the apprentice, his or her parents, and the organization. At the conclusion of their training, apprentices can work for any employer but generally receive seniority credit with the training firm if they remain in it. •

Career Development

International assignments provide some definite developmental and career advantages. For example, working abroad tends to increase a person’s responsibilities and influence within

the corporation. In addition, it provides a person with a set of experiences that are uniquely beneficial to both the individual and the firm.

Most people who accept international

assignments do so in order to enhance their understanding of the global marketplace and to work on a project they perceive as important to the organization. However, in many cases, an overseas assignment is more risky for the average employee than staying with the employer in the United States. Far too often, people who have been assigned abroad return home after a few years to find that there is no position for them in the firm and that they no longer know anyone who can help them. In a surprising number of cases, returning expatriates experience reverse culture shock, and may have even more difficulty adjusting to life at home than they did adjusting to their foreign assignment. Even in those cases where employees are successfully repatriated, their companies often do not fully utilize the knowledge, understanding, and skills they developed in overseas experiences. this hurts the employee, of course, but it may hurt equally the firm’s chance of using that learning to gain competitive advantage. To maximize the career benefits of a foreign assignment, two key questions about the employer should be asked before accepting an overseas post: (1) Do the organization’s senior executives view the firm’s international business as a critical part of their operation? (2) Within top management, how many executives have a foreign-service assignment in their background, and do they feel it important for one to have overseas experience? At Dow Chemical, for example, fourteen of the firm’s twenty-two-member management committee, including the CEO, have had overseas assignments. To ensure appropriate career development, Dow appoints what employees refer to as a “godfather” for those who get overseas assignments. The godfather, usually a high-level manager in the expatriate’s particular function, is the stateside contact for information about organizational changes, job opportunities, and anything related to salary and compensation. At Exxon, employees are given a general idea of what they can expect after an overseas assignment even before they leave to assume it. With this orientation, they can make a smooth transition and continue to enhance their careers. Colgate-Palmolive and Ciba-Geigy make a special effort to keep in touch with expatriates during the period that they are abroad. Colgate’s division executives and other corporate staff members make frequent visits to international transferees. Ciba-Geigy provides a full repatriation program for returning employees for the purpose of (1) reversing culture shock for the transferee and his or her family and department, (2) smoothing the return to the home

organization, and (3) facilitating the readjustment process so that the company can benefit from the expatriate’s knowledge and experience. •

Performance Appraisal

As we noted earlier, individuals frequently accept international assignments because they know that they can acquire skills and experiences that will make them more valuable to their companies. Unfortunately, one of the biggest problems with managing these individuals is that it is very difficult to evaluate their performance. Even the notion of performance evaluation is indicative of a U.S. management style that focuses on the individual, which can cause problems in other countries. For these reasons, performance appraisal problems may be among the biggest reasons why failure rates among expatriates are so high and why international assignments can actually derail an individual’s career rather than enhance it. 1. Home-Country Evaluations Domestic managers are frequently unable to understand expatriate experiences, value them, or accurately measure their contribution to the organization. Geographical distances pose severe communication problems for expatriates and home-country managers. Instead of touching base regularly, there is a tendency for both expatriates and domestic managers to work on local issues rather than coordinate across time zones and national borders. Information technology has improved this situation, and it is far easier to communicate globally today than just a few years ago. But even when expatriates contact their homecountry offices, it is frequently not to converse with their superiors. More likely they talk with peers and others throughout the organization. 2. Host-Country Evaluations Although local management may have the most accurate picture of an expatriate’s performance--managers are in the best position to observe effective and ineffective behaviour--there are problems with using host-country evaluations. First, local cultures may influence one’s perception of how well an individual is performing. As noted earlier participative decision making may be viewed either positively or negatively, depending on the culture. Such cultural biases may not have any bearing on an individual’s true level of effectiveness. In addition, local management frequently does not have enough perspective of the entire organization to know how well an individual is truly contributing to the firm as a whole.

Given the pros and cons of home-country and host-country evaluations, most observers agree that performance evaluations should try to balance the two sources of appraisal information. Although host-country employees are in a good position to view day-to-day activities, in many cases the individual is still formally tied to the home office. Promotions, pay, and other administrative decisions are connected there, and as a consequence, the written evaluation is usually handled by the home-country manager. Nevertheless, the appraisal should be completed only after vital input has been gained from the host-country manager. 3. Compensation of Expatriate Managers Compensation plans for expatriate managers must be competitive, cost-effective, motivating, fair and easy to understand, consistent with international financial management, easy to administer, and simple to communicate. To be effective, an international compensation program must a. Provide an incentive to leave the United States b. Allow for maintaining an American standard of living c. Facilitate re-entry into the United States

d. Provide for the education of children e. Allow for maintaining relationships with family, friends, and business associates 1. Providing Feedback One of the most interesting things about performance feedback in an international setting is that it is clearly a two-way street. Although the home-country and host-country superiors may tell an expatriate how well he or she is doing, it is also important for expatriates to provide feedback regarding the support they are receiving, the obstacles they face, and the suggestions they have about the assignment. More than in most any other job, expatriates are in the very best position to evaluate their own performance. In addition to ongoing feedback, an expatriate should have a debriefing interview immediately upon returning home from an international assignment. These repatriation interviews serve several purposes. First, they help an expatriate reestablish old ties with the home organization and may prove to be important for setting new career paths. Second, the interview can address technical issues related to the job assignment itself. Third, the interview may address general issues regarding the company's overseas commitments, such as how relationships between the home and host countries should be handled. Finally, the

interview can be very useful for documenting insights an individual has about the region. These insights can then be incorporated into training programs for future expatriates. •

Organizational Learning

It is worth noting that bottom-line measures of performance may not fully convey the level of learning gained from a foreign assignment. Yet learning may be among the very most important reasons for sending an individual overseas, particularly at early stages of internationalization. Even if superiors do acknowledge the level of learning, they frequently use it only as an excuse for less-than-desired performance, rather than treating it as a valuable outcome in itself. What they fail to recognize is that knowledge gained--if shared--can speed the adjustment process for others. However, if the learning is not shared, then each new employee to a region may have to go through the same cycle of adjustment

Conclusions A priority for IHRM in the future will be developing positive employment relations. This will not only contribute to successful interpersonal relationships but will help to improve productivity and the overall performance of HR. The view from Sparrow (cited in Roberts, 2003) is that, “Organisations must shy away from ‘one best way’ solutions when designing global HR systems” and that “even among HR professionals there are different views about which HR practices deliver competitive advantage, that can have a major impact on global knowledge transfer". It was through the resource based view (RBV) that the value, rareness, imperfect imitation and imperfect substitutability of an organisation’s HR were shown to provide the means for an organisation to attain an advantage over their competition. Similarly, analysis of HR from the RBV has shown that competitive advantage can be achieved through a variety of HRM practices. These included recruiting and selecting suitable employees, encouraging diversity in the workplace, managing knowledge, fostering innovation, and focusing on employee development and engagement.

References •

Brewster, C. and Sparrow. P. (2007, August). People Management. Advances in

Technology Inspire a Fresh Approach to International HRM. (Vol. 13, Issue 3). •

Du Plessis, A. J. (2007). Change, organisational development and culture: human

resource management’s role in a future South Africa. International Review of Business Research Papers. •

HRM review October 09 (Vol. 8, Issue 13)

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Mahdavi, Iraj: 2005, “Origins of Business Ethical Behavior”, Proceedings of International Business Association Conference, 2005.

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Looming Talent Shortage Rattles HR Departments. Retrieved May 23, 2007, from http://www.oracle.com/newsletters/information-insight/humancapitalmanagement/jan-07/talent-shortage.html?msgid=5306226 Rhinesmith, S. (2007, Feburary). Workforce Management (Vol. 86, Issue. 4) Retrieved May 27, 2007, from http://web.ebscohost.com/ehost/detail? vid=6&hid=117&sid=abd55f73-fda5-4fbf-ad3e-a024ead7ff05%40sessionmgr107

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Theunissen, C. (2007). Management in a global environment. Auckland: Pearson Education NZ Ltd.

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Strategic International Management by

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International Human Resource Management by Peter dowling and Denise Welsh