Assignment on International Human Resource
Management
Deborina Bhattacharyya
Why many multinational adopts English as their corporate
language?
Ready or not, English is now the global language of business. More and more multinational
companies are mandating English as the common corporate language—Airbus, Fast Retailing,
Nokia, Renault, Samsung, Technicolor, and Microsoft in Beijing, to name a few—in an attempt
to facilitate communication and performance across geographically diverse functions and
business endeavours.
Adopting a common mode of speech isn’t just a good idea; it’s a must, even for an American
company with operations overseas, for instance, or a French company focused on domestic
customers. Imagine that a group of salespeople from a company’s Paris headquarters get
together for a meeting. Why would you care whether they all could speak English? Now
consider that the same group goes on a sales call to a company also based in Paris, not realizing
that the potential customer would be bringing in employees from other locations who didn’t
speak French.
This happened at one company I worked with. Sitting together in Paris, employees of those two
French companies couldn’t close a deal because the people in the room couldn’t communicate.
It was a shocking wake-up call, and the company soon adopted an English corporate language
strategy. The fastest-spreading language in human history, English is spoken at a useful level by
some 1.75 billion people worldwide—that’s one in every four of us. There are close to 385
million native speakers in countries like the U.S. and Australia, about a billion fluent speakers in
formerly colonized nations such as India and Nigeria, and millions of people around the world
who’ve studied it as a second language. An estimated 565 million people use it on the internet.
The benefits of “Englishnization,” as Mikitani calls it are significant; however, relatively few
companies have systematically implemented an English-language policy with sustained results.
Through my research and work over the past decade with companies, I’ve developed an
adoption framework to guide companies in their language efforts. There’s still a lot to learn,
but success stories do exist.
Language standardization the adoption of a common company language, or so-called
'language standardization', has many advantages from a management perspective:
1 It facilitates formal reporting between units in the various foreign locations, thus
minimizing the potential for miscommunication and allowing for ease of access to company
documents such as technical and product manuals; operating procedures; and record-
keeping.
2 It enhances informal communication and information flow between subsidiaries.
3 It assists in fostering a sense of belonging to a global 'family', which has been suggested as
an important element in the multinational's use of soft control mechanisms such as
corporate culture (Femer et al., 1995).
While these advantages are somewhat obvious, as mentioned earlier little is known about
when the decision to introduce a company language is taken, or if it occurs formally at all.
Because of the dominance of English as an intimation business language, it may be that
English becomes the common language by default.
The opening of Mc Donald’s in Moscow Demonstrates the HR
demands associated with the new market entry. What did the
company do to handle this? How did the staff help in its
functioning?
The opening of MacDonald’s during the early 1990s in Moscow demonstrates the HR
demands associated with the new market entry. What did the company do to handle these
international challenges? What role did the staff transfers play? One of the fundamental
roles that international HRM plays in a new market entry is assisting headquarters in
understanding and learning the culture of the new market. This step is essential to make the
business successful in all aspects. It is also very important that the local employees
understand the company’s culture as well. According to Dowling and Welch, “HR
activities that build corporate culture include recruitment and selection practices, as
firms hire or „buy‟ people who appear to hold similar values. Training and
development programs, reward systems and promotion are also activities that reinforce
company value systems” (2005, p. 48). A business model that works in one country may
fail in another if things are not managed in the right way.
It has been said that “The many forms of operation modes may demand different skills and
place varying stresses on the resources of the company, particularly on its personnel”
(Dowling and Welch, 2005, p. 49). Companies take different approaches towards staffing
and operating new local markets.
HR has to deliver results in each of these domains, since the four of them are equally
important. The focus may be short term or long term: HR professionals have to be
operational and strategic. Their activities vary from managing processes (HR tools and
systems) to managing people. The combination of the two results in four HR roles:
1. Management of strategic human resources: this role is focused on the
synchronization of HR strategies and practices to the business strategy. In this
role, the HR professional is a strategic partner who helps realize the business
strategy by translating it into concrete HR practices.
2. Management of transformation and change: a second key role in which HR
professionals can deliver value to the organization. HR professionals have to
assist in the identification and implementation of change processes, being
catalysts as well as guards of cultural transformations.
3. Management of the employees: this role refers to the daily problems,
expectations and needs of employees. HR professionals have to stimulate the
employees’ contribution to the success of the company by understanding their
specific needs and ensuing that these are met.
4. Management of the administration of the organization: the HR professional has
to ensure that the administrative processes concerning hiring, rewarding,
training and evaluation, promotion, etc. are designed and delivered efficiently
and correctly. (1997) emphasizes the importance of this role. Although many
organizations and HR professionals tend to underestimate it due to a growing
focus on strategic HRM, the successful deliverance of administrative aspects of
HR will prove to be an added value for the organization.
In this case, McDonald’s “expatriates were involved in assisting with the selection and
training of local staff: each crew member received the standard McDonald’s training (60
hours of training per crew member). Russians selected for managerial positions were
sent to McDonald’s Institute of Hamburger logy in Toronto, Canada and to the Hamburger
University in Oakbrook, IL, USA” (Dowling and Welch, 2005, p. 50). Among other things,
McDonald’s had to expatriate individuals that could speak or were willing to learn Russian
on one side, and hire people that could speak English, on the other side. Language is a very
important aspect of a culture and can easily become an important barrier for business.
As explained by Dowling and Welch, “For most large international firms, a common
reporting language is necessary for formal and information communication, reporting
systems and information flow…Whether deliberately or by default, the language tends to be
English. Such language standardization is both a facilitator and a barrier…It does facilitate
formal reporting and communication, but only to the extent that people have a required
level of fluency in the corporate language.” There are many different aspects that a
company needs to consider when staffing in a new market, and the role expatriates play in
this situations is extremely important since they will not only transfer their knowledge, but
also the company’s culture.
Impact of merger and acquisitions on international human
resource management. With any two relevant examples.
1: Sun Pharmaceuticals acquires Ranbaxy:
This is a classic example of a share swap deal. As per the deal, Ranbaxy shareholders will get
four shares of Sun Pharma for every five shares held by them, leading to 16.4% dilution in
the equity capital of Sun Pharma (total equity value is USD3.2bn and the deal size is USD4bn
(valuing Ranbaxy at 2.2 times last 12 months sales).
Reason for the acquisition: This is a good acquisition for Sun Pharma as it will help the
company to fill in its therapeutic gaps in the US, get better access to emerging markets and
also strengthen its presence in the domestic market. Sun Pharma will also become the
number one generic company in the dermatology space. (Currently in the third position in
US) through this merger.
Objectives of the M&A:
a. Sun Pharma enters into newer markets by filling in the gaps in the offerings of the
company, through the acquired company
b. Boosting of products offering of Sun Pharma creating more visibility and market
share in the industry
c. Turnaround of a distressed business from the perspective of Ranbaxy
This acquisition although will take time to consolidate, it should in due course start showing
results through overall growth depicted in Sun Pharma’s top-line and bottom-line reporting.
2: CMC merges with TCS:
This is an example where there is a merger in the same industry (horizontal). It was done to
consolidate the IT businesses. The objective of this merger, as indicated by the management
of CMC, was that the amalgamation will enable TCS to consolidate CMC’s operations into a
single company with rationalised structure, enhanced reach, greater financial strength and
flexibility. Further it also indicated that, it will aid in achieving economies of scale, more
focused operational efforts, standardisation and simplification of business processes and
productivity improvements.
Mergers and Acquisitions is an extremely important topic in CFA exam. The three levels of
CFA exam build a foundation of Mergers and Acquisitions and will help you reach your
dream job in this field.
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Eligibility: Graduation + 2 years of professional work experience
Duration: 2 years 6 months (for all three levels of exams)
Top employers: JP Morgan Chase, UBS, Citigroup, Bank of America
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Conclusion:
M&A’s are considered as important change agents and are a critical component of any
business strategy. The known fact is that with businesses evolving; only the most innovative
and nimble can survive. That is why, it is an important strategic call for a business to opt for
any arrangements of M&A. Once through the process, on a lighter note M&A is like an
arranged marriage, partners will take time to understand, mingle, but will end up giving
positive
Explain the various cultural issues with relevant example.
Emerging technologies make it possible for companies to hire employees in other countries
to meet business needs, and even small businesses can take advantage of this hiring
strategy. While a diverse, global workforce usually presents increased opportunities for
innovative approaches, cultural problems can hinder productivity. By recognizing potential
obstacles, you can take proactive steps to promote cultural awareness and foster a more
productive global workforce, along with some easy tips on how to better understand
your international peers .
Managing emails and phone calls: Telephone conferences can be very effective in
improving business communications and cooperation within international companies.
However, sometimes problems can arise when participants don’t know what to expect
from each other.
Let’s look at how different cultures might approach this kind of communication -
perhaps Brazilian people need some personal contact before acting or would like to
know the benefits of providing information.
Small talk can be very important for Americans to build relationships. British people
might use humour, whereas Chinese colleagues may want to check with the group or
boss before responding.
If there are no sensitive issues involved, it’s a good idea to use emails to communicate
information beforehand, taking care to respect cultural differences when addressing
people (for example, the use of first names in the US, and titles in Austria).
Be sure to follow your emails with telephone or face-to-face communication, especially
when cooperating with cultures with high person orientation. The telephone
conference itself should have a clear structure, with time to speak for everyone. Make
sure that everyone is still involved by asking for feedback from individuals, and keep in
mind that some people may have to check with the group or boss before expressing an
opinion.
Things will go much more smoothly once everybody feels informed and involved.
Presentations : Consider how people from different countries approach their
goals. Future oriented cultures like those from the US want to hear about the potential
benefits of a product, while past oriented audiences from places like India or China
recognize credibility through past achievements. Because of this, presentation styles
vary across cultures - some like to focus on the ‘big picture’ before going into detail and
appreciate interaction with the audience.
On the other hand, in-depth presentations from low-context cultures simply
concentrate on the facts. The key to a successful international conference is the ability
to translate information in a way that appeals to everybody - think about your style of
communication, gestures and body language when presenting.
Meetings and how to facilitate them: Big events like international sales
meetings can quickly become disorganized and lose direction if communication breaks
down between groups from each country. Participants may arrive late and leave early if
there’s no clear schedule, and frustration can arise if too little time is left to cover all of
the topics.
Perhaps some colleagues don't concentrate on the presentations, or don’t go to the
meals as planned Avoid misunderstandings by clearly defining the aims of a meeting
and telling presenters what is expected from them. Remember that meeting culture for
the participants could be very different from yours - it’s very important to consider
language requirements like interpreting and translation facilities, as well as dietary
requirements, if food is being provided.
Do make sure to plan enough time for interaction and a social program around the
meeting. Check what is expected from the participants and keep an open mind when
considering their cultural preferences.
Socializing: Highly person-oriented cultures find socializing very important, because
getting to know each other is necessary to doing business together. You may be invited
out in many countries, often to places you may never have expected - like a karaoke bar
in Japan, or a sauna in Finland.
Try to research these customs before your trip, and take advantage of being invited out
to get to know each other and build trust. Not only will it benefit you professionally by
meeting new contacts, you’ll be experiencing something new! By showing interest,
you’ll make it much easier to navigate negotiations when the time comes.
Handling negotiations : Business negotiations can be tricky at the best of times,
but even more so if there are any cultural misunderstandings. For example, Chinese
culture values hospitality and getting to know business partners better before anything
is agreed upon - eating together is very important, and it can take a long time before
plans are made. For an American visitor, this approach could seem counterproductive.
Think about the best environment for negotiations, who should be involved and even
things like appropriate clothing and seating arrangements - as with many of the above
scenarios, being sensitive of cultural factors like this can make all the difference when
building relationships.
Managing teams: Communication is vastly improved when roles and expectations
are clarified and proper cross culture communication training has been implemented.
This is especially important when managing teams from all over the world. Be aware of
different styles of communication - some may be more direct than others, or only give
feedback at certain stages.
Spend time on face-to-face relationship building before switching to virtual
communication, and make sure to include all team members in decision making at all
stages of the project. Once you’ve identified the cultural differences that could lead to
any miscommunications or misunderstandings, find common ground and decide how
you want to work together.
As with any aspect of business, things are made easier with good communication.
Although this can be daunting when dealing with colleagues from different cultural
backgrounds, it’s important to educate yourself and your employees about how to
approach any potentially delicate situations.
