Explain the Changing Role of The Corporate Human Resource Function in International Firms

Introduction:

Several past studies have revealed that the rapid pace of internationalization has created a more strategic role in human resource management. A varied range of typologies is found to be used in different organizations by employing different HR professionals. However, Baker (2011) mentioned that the typologies are mainly selected based on the changing nature of human resource management over the time. Varied roles such as a change agent, facilitator and other roles are normally exhibited by HR professionals depending on the changed portfolio of the business. In today’s globalized environment, crossing borders have become very normal, which actually has given rise to the issue of corporate human resource function in international settings(Balki and Gomez-Mejia, 2008). The present study is focused on identifying and explaining changing roles of the corporate human resource function in international firms.

1.1 International business unit and HR department:

Limited attention has been given to the role of corporate HR function. Initially, it was assumed that HR is not typically a key player in the development of corporate strategy. However, the rapid pace of internationalization has made the role of HR more strategic and influential to establish the corporate goals.

In the international business environment, the corporate HR department is found to act as a designer frequently. It is assumed as a creative process in which the HR team reviews all the change tools and interventions which are available in an international business context(Balkin and Gomez-Mejia, 2007).From the international business environment, many obstacles come to the workforce, which can effectively create demotivation among the employees. To mitigate the issues, the HR professionals are taking initiatives on selecting specific change tools prior to initiating any organizational changes.

In the next step, the corporate HR team arranges few training sessions fill the gaps in order to maintain the organizational values and goals in the near future.In this context, the author cited that evaluating the whole process is being done by the corporate HR department to identify and rectify any single mistake exists in the system. The overall process is done by employing tools such as “Winning the Game of Changes” where the performing employees of the training session are given specific rewards as per the performance deliverables.

1.2 General role of HR:

The context of operation always needs to be identified. As stated by Burack (2008), a simple model of HRM would be sufficient enough in stable environments. As a matter of fact, during changes the HR professionals are normally supposed to act as change agents. Furthermore, after overcoming the situation HR personnel are found to exhibit generalist role. The basic role of HR body is employee welfare, controlling employee absence and maintaining a healthy work atmosphere across the organization.

In the late 1980s, the rise of strategic human resource management has been emerged to manage all kinds of changes as then the business environment is becoming more and more competitive.

1.3 Shifting from Conformist role of the HR department to innovative role:

Among varied typologies, one of the most important jobs of HR professionals is to exhibit innovative role. Due to the globalization, the geographical borders have been removed by most of the organizations. Considering the fact, Chowanec and Newstrone (2011) stated that the removal of geographic boarders has made the HR professionals to adopt innovative ideas in order to mitigate the cultural barriers. On the other hand, Cranmer (2006) argued that globalization has four major drivers out of which managing global markets as per consumer need hold the highest degree of significance. This requires a specific understanding and response from HR professionals which could make the difference between domestic HR role and changing international role of the HR professionals.

Tesco can be considered in this scenario which is the largest retail, manufacturing unit of Great Britain. It has focused its corporate HR strategy into generating innovation by arranging special meet of the customers with the organization(www.cipd.co.uk, 2014). The same is being done either by face to face meeting or by approaching via social media networking channels.

1.4 Shifting roles of corporate HR as inspiration agent:

Inspiration agents act as a useful catalyst in motivating the employees to adopt organizational changes under any circumstances.The basic role of inspiration agent is to establish a strong corporate culture in a decentralized structure which is mostly observed in IKEA a retail organization headquartered in Europe.Inspiration agent conducts few steps which are mentioned as follows:

Step Deliverables
Step 1 Making people ready to experience change
Step 2 Controlling own feelings associated with each stage of adopting changes
Step 3 Helping other members to understand an deal with the own feelings
Step 4 Preparing to deal with resistance to change
Step 5 Making change process fun and exciting in order to mitigate frustrating behaviour of the team members
Step 6 Special training is given to overcome the barriers to change
Step 7 Implementing tools for making change process successful
Step 8 Introducing creativity and participation of all team members in order to smoothening the overall process.

Table 1: Role of HR as inspiration agent

(Source: www.ashoksom.com, 2014)

1.5 Shifting of corporate HR role in the context of International business environment:

The international corporate HR role is mostly dependent on internationalization and HR strategies associated with it depending on which roles and responsibilities of corporate HR varies.The overall corporate HR functioning is segregated into three domains which internationalization strategy, International HR strategies and International HR roles.Many power generations and distribution organisations such as EDF is found to shift from generalisation to the internationalisation which is mainly focused on the facilitator role having a strength of 167,000 employees across the globe. On the other hand, Unilever is having 234,000 employees and it dominates the FMCG sector of the globe is presently focusing majorly on the restructuring of global operations(www.cipd.co.uk, 2014). This is being done by employing Hr professional as corporate trainer and motivator.

1.6 Shifting to the corporate facilitating role in the context of international human resource management (IHRM):

A corporate HR function helps the workforce in understanding the common objectives of the individual and the overall planning process in order to achieve the desired goal. However, Deshpande and Damodar (2007) cited that standardization of HRM role is often required to achieve the same as it creates cross border equity to highly facilitate an internal labor market. On the contrary, Dyer (2005) argued that standardization can also lead to conflict between parent firm practices and local conditions with respect to local national phenomena. In this critical condition, the role of facilitator acts as a catalyst to resolve all kinds of issues.

Several countries are found to adopt different corporate HR roles. US MNCs are often using centralized HR role and innovators in industrial relations. On the other hand, Ellig (2011) argued that Japanese MNCs are found to follow strong and informal centralised coordination with a network of expatriate managers. In this context, country of origin factors needs to be divided into core and periphery values out of which the former is treated as more consequential in determining organizational practices than later.

1.7 Shifting of corporate HR role as primary monitor and guardian of culture:

Corporate HR also plays a vital role in monitoring the implementation of overall corporate HR policies across overseas subsidies. In this context, Evans and Davis (2009) stated that HR can become “Champion of process “by shifting from generalist role to a flexible workflow process. On the other hand, Gaertner (2009) cited that corporate HR can build commitment of top management by providing special training to the managers and monitoring the overall process.Siemens and ABB is basically focused on maintaining cultural flexibility and monitoring overall activities having working strength of417,000 and 116,000 respectively(www.cipd.co.uk, 2014).

Furthermore, Galbraith and Schendel (2005) cited that corporate HR equally can exhibit some social responsibility for ensuring that future leaders are sensitive and well skilled in dealing with all global challenges. This approach has created a new role of corporate HR as “Guardians of culture” which is mainly focused on over viewing the implementation of global systems and values.Basically, the extent of the the centralised structure has impacted on the uptake of the processes.Decentralized organizations also have a similar type of corporate head office mostly similar to the main office(Hannon et al. 2006). Due to a small area, a limited number of corporate HR executives are recruited to perform a limited range of activities with primarily focused on expatriates and top management.

1.8 Shifting to the corporate HR role as human capital steward and relationship builder:

Internationalization of contemporary business unit has led to the shifting from general roles of HR professionals. As cited by Horowitz et al. (2008), in international business unit HR professionals are mostly working as a human capital steward, relationship builder and rapid deployment specialist.In the role of “Human capital steward”, HR professionals act as a guide and facilitator in partnership with the workforce. The basic aim is to achieve the highest possible return on human capital investments of an organization.In the role of “Relationship Builder”, HR professional enhances social capital across the overall value chain by maintaining healthy relationship between individuals and groups both internal and external to the firm.In the role of “Rapid deployment specialist”, HR professionals become responsible for developing flexible human capital resources by emphasizing more on tolerance and adaptability (Lam and White, 2008). Japan has implemented relationship builder role of HR in the governance in the Electronics, FMCG and Automotive. The same has improved the relationship of the organization with the clients. 

Summary and conclusion:

After analysing all statistical data it is clear that most of the contemporary business organisations have moved beyond the typologies of Hr role in an international business setting. Most of the organisations of UK, USA, Europe and other sub-continental regions are focusing on imposing specific HR role in a transitory phase. The new role of corporate HR as a change agent, facilitator and other positions are needed to be implemented to improve the overall functioning of the contemporary business firms. It would not matter actually whether the operation is decentralised or centralised and what is the area of operation. Special HR roles could be implemented to observe the effects on employee behaviour and improving the success rate of the international organisations in the specialised business portfolio.

References:

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