Trends And Challenges Of IHRM For MNCS

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Question :


Task Assume that you work in a multinational corporation (MNC). As the Head of HR you have been given the task to prepare a Business Report to critically review and evaluate the current trends and challenges affecting HRM internationally. 

You have to critically analyse how these challenges impact on the future HRM practices for your MNC. 

In answering this question you will need to: 

  • Identify three key trends and challenges for international HRM (e.g. technology, education, mobility, health and safety,etc.). 
  • Analyse how these three trends and challenges impact upon, and affect the HRM practices for an MNC. 
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Answer :

Executive summary

Most of the leading economies are characterized in terms of incorporating the technological advancement in order to cope with the volatility of the respective business ambience. The Multinational Business Units have also facing a significant swing in terms of HRM policies due to the advent cross-migratory trading. This report suite is dedicated to address the governing issues that are prone to emerge while entering into the competitive market. This admission is followed by a critical analysis of the emerging issues in order to deduce the potential remedies that might pave the respective MNCs towards a relative competitive edge.   


In the advent of an abrupt increase in the technological expertise that literally enforces reputed business units to cope with them in order to devise the strategy of sustainability while attending the customer expectations, it is a potent challenge for the respective units to mitigate the issues that are prone to emerge as impediments in the way of seamless operation. For instance, intercultural barrier is one of the most common issues that is prone to emerge as a potent impediment in the way of sound exchange of services and can be the prototype of such other issues. The intent of this study is to identify the proportion of likelihood of those issues in the context of Multinational marketing. In this regard, the report is committed to identify three governing challenges of supreme vulnerability followed by a critical and multidimensional analysis in order to direct the further studies to derive the potential remedies of those challenges.  

Identification of three key trends and challenges

It is important for any Multinational company to acquire the ability of operating globally. Evidently human resource manager of any company needs to ensure sustainable recruitment which is instrumental in ensuring that the company is equally accepted in the global market. As a human resource manager of the company the major challenge is associated with recruitment of the appropriate employees that can ensure organizational success in the global paradigm. Three major challenges which have been identified in the field of HRM trends and practices are

  • Adapting the most effective hiring and retention strategy for globalized workforce

In order to accomplish this particular trend the challenge is to adapt the appropriate retention strategy for the company. Furthermore, preparing for the integrated global workforce several complexities act as the barriers.

  • Strategic decision making

Corporate strategic decision making requires understanding the human capital opportunities and fulfill the Corporate social responsibility.

  • Preparing experts for future sustainability of the company

In order to prepare expert leaders for the global market the challenge lies in identifying the key skills of an individual on a local level.

Analysis of the identified trends

  1. Preparing globalized workforce

It is very evident from several contemporary economic analyses that privileged economies are proclive to develop high rate of unemployment among the youths since the demography has been chiefly dominated by the dwindling population of youth. This will inevitably cause deficiency of skills as the infrastructural developments are not adequately progressive to address this demographic majority of youth. In this regard, as per the apprehensions of Lenz, Pinhanez, De Césaris & Jacobs, (2016), MNCs tends to appear stereotypical as they attempt to replenish the void with older alternatives, both in terms of age and experiences. Furthermore, the faculty of nomination of new recruits is principally governed by the requisite skills and subsequently the management encourages cross-border migrants to join the concern. On that note, it is an exaggeration to convey that the impulse of preparing workforce of global workforce is chiefly endowed with the desire to employ skilled subordinates across demographic and cultural diversity in order to acquire business efficiencies and gain strategic properties, apart from replenishing the vacancies.

Statistics suggests that, though the older workers are sound in terms of experience and expertise, they are potent enough to be an impediment in the way of organizational operations in terms of physical competency (Connell, Nankervis & Burgess, 2015). For instance, it has been identified that the quotient of disabilities that the older workers are prone to exhibit is four times more than the youths and this feature hinders the organization to switch task schedules due the inherent physical demand. On this note, the challenge of preparing global workforce earns prominence since the work styles need to be flexible enough to maintain  the accordance with the individual culture of the subordinate. Legal considerations regarding the age-discrimination seems to intensify the challenge and the HRM policies need to acquire the acumen to exercise the retraining opportunities while evading the legal complications. The issue is quite similar and the consequences resonate when the concern is gender oriented. For instance, as it has been considered as an axiom that the senior-level designations of an organization hierarchy is supposed to be replenished by male subordinates, women who are dedicated to contribute a significant moiety in the entire workforce are supposed to face trivial social pressures. The HRM policies needs to be flexible enough to promote underacknowledged female workers, as several MNCs in South Korea has been able to dispense.

Furthermore, as the leading economies are prone to exhibit cross-migratory trades coupled with massive incorporation of communicational expertise, leading MNCs need to design attractive policies with an immense scope of innovation in order to draw talents of global competency standards (Barnes & Adam, 2017). For instance, the strategy posed by Infosys seem worth-mentioning over here since their HRM policies endows Chinese graduates with relevant training of the extra-vernacular language in order to enable them to avail the urgent vacancies in their respective branch in Mysore. It can be posed as an important cost-effective outsourcing of workers.

Incorporation of technological expertise owns the urge to the policies to be flexible enough to align them with the ultimate business objectives. As per the survey conducted by Sagar, (2014), most of the successful MNCs are prone to adopt a holistic recruitment approach where they have integrated the impulse of recruitment with screening, onboarding and technological assistance.

Moreover, the HRM policies need to be founded upon the diversity of the procured talents that consequently directs the impulse to develop training programmes to encourage individual learning. This will further enable the respective organizations to replenish the flagrant deficiency of expertise. Apart from that, integration of the subordinates from diverse cultural backgrounds is also one of the imperative parameters that need to be taken into consideration since without the seamless integration the imposed policies might cause cost overruns and an eventual stagnation in product launches and sales characteristics of the sales unit. 

In order to enable the HRM executives with the introspective insight of the governing details of cultural backdrop of the subordinates, they might be recommended to employ various analytical frameworks such as GLOBE project’s nine cultural dimensions or the lenses provided by Hofstede (Goel, 2016). On that note, it appear imperative to recall that the moot essence of the frameworks are driven by the impulse to simplify the intricacy of the emerging issues. However, the frameworks are obliged to provide sound datum to introspect the divergence of cultures and encourage the management to entertain legitimate sensitivities of the subordinates.    


Strategic decision making for effective recruitment

In order to make effective strategic decision the major HR challenge is to incorporate human capital opportunities and risk and analyse how it affects the company in association with operating in abroad. There are many identified workforce opportunities which are marked by several steady political machinations in order to trade openly across the boundaries of a particular country. On that note, it is imperative to address that the recruitment opportunities are globally characterized by the major improvements of the cross-cultural alliances as most of the leading economies are prone to indulge cross-border migrations and subsequent trades. Significant swing of the underlying understandings that prevalently fueled these alliances such as conflicts and relaxations will inevitably be reflected in the universal trade norms (Sahu, Sharma, Mba, Ram & Jabalpur, 2014). The recruitment policies are required to be nimble enough to avail the scopes while evading the potential risks.

Furthermore, the aptitude of the policies need to be sound enough to enable the respective units to introspect the cultural, labour and market intricacies in order to forecast the vulnerable risks (Schuler & E. Jackson, 2014). This introspection endow the respective units with the understanding that shapes the decisions associated with the departure or integration of the underlying market.

The cardinal pivot of the HRM strategies that ensures the global growth and expansion of the respective business unit sincerely relies on the integration of the available workforces. The team of Human Resource executives need to discern the complications that significantly hinders the integration of the workforces. Eminent scholars such as Machado & Davim, (2014) conveyed that these complexities principally include non-identical corporate and social culture. On that note, the policies should be circumspect enough to anticipate the potential impediments before devising the master plan. The introspective study of Kumar, (2014) suggests that the inclusion of the diversity of subordinates comprising of women, youth, persons with physical disabilities and the aboriginal descents is utterly imperative to integrate workforce across the globe driven by productive purposes. 

According to the apprehensions of Story, Barbuto, Luthans & Bovaird, (2014), some of the MNCs are prone to exhibit rigidity regarding the employment of some established management trends (such as command-and-control) though these attributes are inherently flexible enough to align themselves with the domestic cultures. On the same note, some of the policies that are integrally associated with the legal considerations is unable to modify in accordance with the business integrity and strategies regarding the human rights. HRM policies need to intervene in this turmoil in order to prioritize the concerns while imbibing the essential ingredients of corporate culture that might pave the organization towards the sustenance of the principal values and ethics. The global growth of the company depends on the HR integrated workforce to some extent.

It is important to promote the diversity in workplace. Several cultural attributes like command-and-control management style can be improvised accordingly in order to fit a particular local culture. It is important for the HR manager to identify several modifications that can be helpful in increasing the employee excellence. The complexities require to be handled in order to decipher the potential corporate culture elements that are elementary for organizational change. The corporate culture needs to be balanced with the societal culture and the management needs to focus on the societal elements as well. It can not be a wise decision to impose the cultural elements on the subordinates but they can choose to return the community consistently across the global organization. It is important that the HR manager develop several programs that can prove to be essential in assisting the executives so that they can adapt different cultural and societal norms. It is important for the manager to gain a detailed cultural knowledge about the local regional environment and the protocols need to be established accordingly.  

Preparing leaders for future

Skilled employees are one of the primary requirement for the future sustainability of any multinational company. It is important for the human resource manager to prepare a set of employees with leadership skills. Preparing a new set of skilled employees needs strategical dealing with the individuals. Cultural diversity is an emerging challenge for the HR manager though it has its own set of advantages. Culturally diverse workforce is difficult to endorse in multiple levels because one particular idea can not be imposed upon a group consisting of divergent people with different cultural identities. But the major advantage of having a culturally diverse workforce is that the collective productivity of the group always indicates more innovative and creative ideas and different solutions which are fresh and new for the existing institutional problems within the organization (Horwitz & Budhwar, 2015). A culturally diverse workforce always has people with different perspectives and experiences which indicates the emergence of innovative ideas within the set of employees. The prime motif of the manager is to understand how to incorporate the advantages of cultural differences for the organizational profit. Evidently, in order to actualize the advantages a manager needs to mitigate any possible friction among the participants of the group. Another important factor is to develop possible practices in order to promote the collaboration among the workers belonging from different cultural background and the purposive individual values need to be communicated through effective policies across countries and ethnicities. It is a factor of moot importance that acts as the driving force for the organizational success.

For more effective recruitment it is important to identify the skills of an individual beyond his or her resume. Effective communication and a good understanding of human psychology can prove to be helpful for it. Interacting with the participants is a necessary process which helps to understand his or her qualities along with that it is important to identify the skills which can prove to be beneficial for the enterprise (Sanders, Shipton & Gomes, 2014). The challenge lies in identifying the desired candidates from a huge number of candidates who are willing to participate in the company. Evidently the HR manager needs to identify the key skills of the willing participants on the local level. Identification of the necessary skills among a large number of applicants is a significant and challenging task for the manager. The importance soares higher when the company works as a multinational platform and inevitably will to explore new markets breaking the geographical barriers (Ruël, H., & Bondarouk, 2014). The managers need to know how to mitigate the cultural barriers among the diverse people of the group. It is important for the leader to educate the managers to acquire necessary skills so that they can tactically train the employees in order to improve their organizational skills. The cultural difference in many cases creates language barriers and to some extent, communication gap between the higher authority and the subordinates. It is difficult to mitigate such problems completely but effective communication skill and a primary knowledge of different cultures can help to decrease the differences. Another notable thing is to have respect towards the individual values of the subordinates. The employees should not feel any kind of disrespect that can prove to be harmful for their self respect. The sole purpose of the manager needs to be concentrated upon motivating the subordinates and hence, they can feel free to share their individual innovative approaches. Several organizational programs can be arranged in order to increase the level of communication among the employees and most importantly it can also serve the purpose of creating a healthy workplace atmosphere in the organization. 


It is very evident from the apprehensions of the corresponding report that to adapt the most prudent HRM strategies is one of the effective empirical solutions to cope with the emerging issues that have been critically addressed here. Those strategies must include appropriate recruitment and retention strategy in order to prepare the potential subordinates for upcoming infrastructural changes. It has been successfully identified over here that this notion of encouraging the subordinates to avail higher excellence is one of the effective remedies that any report can pose while assuaging the other issues. Moreover, the critical tone of this report intends to encourage circumvent decision-making aptitude that paves the concern towards anticipating the vulnerability of the issues to occur. The development of this aptitude has been systematically suggested in this report that might encourage the respective unit to direct the subordinates accordingly and simultaneously facilitates the development of prudent sustainability strategy while enjoying a relative competitive edge.