International Human Resource Management

Executive Summary

In a highly competitive and ultra-dynamic business environment in order for Morden business to remain competitive and thrive, it is no longer good enough to compete and serve at a local scale, more and more business have seen the need and benefit of expanding their business on a global scale. Expanding the business internationally will allow a broader market which in turn will help the organisation stay competitive even gain a competitive edge, it will also result in increased profit margins and stakeholders larger return on investments. When expanding internationally there are several key issues that will need to be addressed such as the organisational context, the staffing context, recruitment and selection, international compensation and performance management and continued management and re-entry.

The organisational context

Whinch-it board of directors though lacking the necessary skills to expand globally have expressed interest in expanding to the Asian region to tape into the markets need for boats and boating equipment.

When planning an overseas expansion they are several issues that should be considered, these include the change of size and structure of the organisation, the flow and volume of information, control mechanisms, and the host countries demands-Dowling et.al 2008. As the business expands it gets bigger in terms of size and therefore structure of the organisation has to change in order to accommodate the change in size. According to Lihua (2009) two key structural features of the organisation will change which are the hierarchal levels and the number of subunits. Due to more employees being needed they will need to be managers to manage the subunits therefore an increase in the levels of hierarchy in the organisation. Departments such as the export department structure will also be the initial stages to be affected and also attended to by manufacturing companies such as Winch-it. Whinch-it will require a foreign agent or a distributor who will have knowledge of the local market, in addition to a foreign agent an export manager is also needed to control the domestic based home office, this new positions will affect the structure and size of Winch-it. With an increasing size of the organisation and a longer hierarchical system the volume of information and control mechanism becomes harder to monitor. According to Arace et.al 1974 communication plays a vital role in the organisation's control and coordination process and the organisational hierarchy plays a part in the work related communication flows, the more levels of hierarchy means the longer and delay the information might get to certain subunits and the relevancy and urgency of that information might have diminished by the time it gets to its final destination, Arace et.al 1974 also states the need of networking in the organisation as that will strengthen the communication links between individuals in the organisation.

There are various organisational structures that Winch-it can adopt for its international expansion, the most effective one I recommend is the matrix structure. By adopting this structure Whinch-it is basically integrating its operations across more than one dimension Dowling et.al (2008). The advantages to this structural form are no issue is neglected as conflicts of interest are brought out in the open and priority is placed upon any problem that may arise in the organisation. Due to Whinch-it having multiple objectives in their plan to internationalize their business such as not just selling their products in the Asian regions but also moving some of the production overseas the matrix structure is an excellent choice as it fits the strategy of simultaneous pursuits and multiple business dimensions which in will also be given equal priority Dowling et.al (2008). According to Qiu et.al (2012) a number of multinational companies use the matrix system to implement high levels of dual strategies such as foreign product diversification and area diversification; this shows the matrix system fits the situation. This matrix structure is highly effective but is also expensive and will require careful implementation and management from the top management.

The staffing context

Whinch-it can pursue one of several approaches to international staffing, with each having its advantages and disadvantages. These staffing methods include ethnocentric staffing method which the strategic decisions are made at the headquarters and the foreign subsidiaries have limited autonomy. If Whinch-it feels there are no qualified personals in the host country then ethnocentric approach will prove to be the best one. Having a parent company national will also maintain the communication, coordination and control links to corporate headquarters. Disadvantages of this staffing model include reduced productivity and high turnover as a result of limited promotional opportunities to the host country nationals. Another staffing method that can be used is polycentric, this models allows each subsidiary to be managed by a host country national with some decision making autonomy, this will eliminate some of the problems that ethnocentric have while also eliminating adjustment periods, language barriers and it gives continuity of management of foreign subsidiaries Dowling et.al 2008. Polycentric however has its disadvantages such as language barriers with parent company national and the loyalty to the PCN might be lower that the loyalty to the HCN's nationality. Geocentric method of staffing takes no account of the nationality of the individuals but their ability