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In today’s competitive Global market, various MNCs has chosen and improvised it marketing and managing strategies in order to achieve a higher competitive advantage (Wagner III and Hollenbeck 2014). Microsoft is one of the chosen MNCs for the assigned report.
Microsoft is an American multinational company that is currently leading the market, offering software and networking technologies. Microsoft is a leader in offering its customers smart technologies like software, latest operating platforms, smart response systems and smart phones. Microsoft owns Google, one of the most crucial search portal and operating platform that are used by billions of people all around the world. The primary strategies that are used by Microsoft to expand its business are mostly flexible customer service and operational in nature. The offering of open connections to Microsoft’s high end volume products, keeping a check on the industry’s support on standards and extensions, higher flexibility of the current products, introduction of the open source of Interoperability Initiatives (Campbell, Coff and Kryscynski 2012). The organization’s successful inventory management is also one of the biggest strengths that is responsible for the global expansion of Microsoft.
The purpose of this report is to explain and evaluate the significance of the international HRM with reference to the selected organization and help explain the fundaments that are inter related to the principles and policies of International HRM and global expansion.
On exploring with the arguments of entering the Global market, the Microsoft can face several complexities in terms of establishing a consolidated ground. Microsoft uses strategies like collaboration, undertaking or acquiring a pre existing firm and setting up a wholly owned subsidiary (Reiche, Mendenhall and Stahl 2016). Microsoft with its distinctive competency and cost effective strategies can potentially generate higher revenue margin by applying those strategies in the foreign market as well. The higher profit margins can be evaluated through the economies of scale that includes the low cost incurring leadership. Microsoft characteristically face difficulty from the two kinds of business complexities. The first being demands for global cost reduction and integration and the other being, demands for the delineation and the local receptiveness. The duality of the cultures, its commonness and yet its uniqueness affects highly on the business strategies (Collings, Wood and Caligiuri 2014). The pressure that is presumed be of local responsiveness involves the consumer taste and preferences, the differentiation in the infrastructure and the national business system protocols that is obligated upon by the host governance. The other complexities in terms of entering a new market are the globalized workforce, the guidance of the corporate strategy in the decision making process, preparing for the future prospects of the company and the obliging with the legal propositions. The challenge of the global workforce involves the complications that can arise from the recruitment or the selections of the workforce for the organization. The gaps of shortage of the workers are often filled with aged workers. These workers are probably experienced in terms of service and knowledge but can pose a threat in terms of occupational health and hazard. The second complexity defines the complications that are incurred in terms of incorporating the human capital opportunities and risks from operating in a new market into the corporate strategic decision-making (Machado 2015). The primary challenge arises, when the period comes for the gathering, accessing and understanding the cultural, labor and the market intricacy in the new market, in order to predict the company’s prospects and risks of sustenance and integration in the new market (Story et al. 2014). Cultural diversification is one of the challenges that can be one of the biggest strengths but the primary question arises about the successful implementation of the diversity management strategies and how the diversity can be made useful in the organization as well as successful mitigation of the abrasion. The final complexity is related to the legal complications and the challenge in terms of workforce planning in order to understand the nuisance of the laws and the customs in the region of operation. Lack of sufficient knowledge about the ever-changing legal regulations in terms of labor can be a feasible complication.
As per the requirement, the two countries that is considerably chosen for the assignment are South Africa and Australia. The reasons for choosing the two countries, being economical stability and technical awareness. These two countries are also a consolidated market for the IT industry and networking systems. The strategies that can be taken for the international development of Microsoft are breaking of the local-national boundaries, building up of Global database related to the necessary talents, construction of a mobility pyramid, identification of the leadership capital and the management of the overseas vacancies or designations (Kotler 2012).
The benefits of application of strategic diversification of cultures in a workforce that can be helpful in solving critical complexities in a more detailed, creative and innovative manner, instead of being biased towards the employees who are the nationals of the country where the headquarter of the organization is based (Landis and Brislin 2013).
Building of the global database can help the organization keep a track of the career developments of the other viable employees who can be promising and benefitting for the organization. The construction of mobility pyramids enables the organization to keep a track of the employees in terms of willingness to relocate in different locations as per the company requirements, evaluate their capabilities, and experience (Dowling and Donnelly 2013).
The strategy of identification building the leadership capital in beneficial in terms of building the company’s mix of managerial skills by updating the information related to the company in the employees’ c.v. as well as their managerial skills and potential that enables the organization to keep a track of the employees preference and career shifting tendency over time. This information can be stored and used for analysis to understand if the employees require additional training.
Overseas operations are important part of a company that needs to be managed. The overseas postings are equally important as the business assignments. Overseas operation help the organization understand and evaluate it other activities in the different regions that needs to be understood and manipulated. This also helps in the regular monitoring of the company’s gaps and pit falls that can be identified and mitigated on time.
The limitations of the diversity management is cultural and linguistic misunderstanding both internally and the prospective clients, that can could be costly for the company and result in the breakdown of a relationship between the company and its collaborator.
The precincts of maintaining the database by the organization are subjected to the internal managerial activities of the organization that needs to be taken care with responsibility and dedication to keep the monitoring. This can often result is data loss or data theft, which can be one of the viable liability of the company, towards a huge loss.
The limitations faced by in terms of relocation vacancies is the lack of willing employees who are less eager to relocate or take up overseas assignments that can be strenuous.
All these strategies can affect the HRM of an organization, in positive and negative manner. Since HRM is not only involved with the employee management but is responsible for a diverse field of operation ranging from strategy making till the reward framework designing of the workforce of the organization as well as look after the organizational productivity based on the efficiency of these strategies.
HRM of an organization is liable for the formulation of the recruitment and selection of candidates, demarcation of the organizational from the liabilities, employee management and retention, formulating the business strategies, managing the performance of both the organization and employees, managing diversity, maintaining health and safety in a workplace are all the responsibilities of HRM. Failure to execute any of the responsibilities can affect the organization and the HRM in return.
Culture refers to a definite set of pattern in the diversity, which is mostly depended in the difference in the ethnicity, perspectives, educational backgrounds. Cross culture can refer to the company's initiatives to increase understanding of different groups, develop effective communication efforts to reach out to clients outside the traditional market.
The cross-cultural management theories of Geert Hofstede namely the power distance, masculinity-femininity, individual collectivism, long-term versus short-term orientation and uncertainty avoidance are first imparted to the employees is related to the adjustment process in the form of a U- Curve model of learning. The U-Curve model of adaptation is a framework which is used to identify the levels of psychological transformation that an individual undergoes under situational influence. The four different phrases of the U-Curve model is The Honeymoon stage, Cultural Shock, Adjustment and Mastery (Jaber, 2016). Following the learning process, the employees undergo evaluation process (Rehg, Gundlach and Grigorian, 2012).
An employee who is sent to a different cultural diversity or nation for an assignment on a long-term basis faces certain concerns related to the adjustments in the new circumstances. In certain instance, the expatriates take the family along with them and in such instances, the whole family has to undergo the adjustment process as well as the expatriates have to adjust to the new work culture (Berardo and Deardorff 2012).
The expatriate’s cultural process is affected by several aspects that can be categorized under four cultural dimensions such as self-oriented, others oriented, the perceptual dimensions and the cultural- robustness dimensions (Berardo and Deardorff 2012). The initial three components are usually individual eccentric factors that are subjected to change and improvement whereas the final factor is influenced and controlled by the mastery of the first three factors (Haslberger, Brewster and Hippler 2013). Different companies use different methods of teaching the expatriates the cross-cultural skills that are targeted to facilitate the interaction with the different cultures (Lenartowicz, Johnson and Konopaske 2014). Training methods of didactic, Experimental, Attribution, language, cultural awareness, interactions, sequential and cognitive behavior and its modification are used by the Microsoft s to train their employees before relocating or placing them in a different cultural environment (Argote 2012).
Cultural shock as the term refers is the concern that every individual face while in an overseas assignment. Usually this normal daily setback can hit any one, the first timers or the experienced ones. Cultural shock is the outcome of the combination and the accumulation of the several factors that give rise to stress and anxiety (Furham 2012). Usually the difficulties in coping with the newer environment as well as the cultural differentiation, loss of regard for the friends and other possession are considered as the probable factors to give rise to a cultural shock. As per the U – Curve model of the adjustment process which has been explained previously, defines the various stages, with the first phrase as the interesting or fascinating part that occurs after coming in contact with a new environment, usually known as the honeymoon period. Gradually with further inclination towards the bottom of the model, comes the steep turn. This is where the individual learns the complication of the new environment and tries to cope with the situations and gradually starts facing stress and anxiety, under the pressure (Trueba, Jacobs and Kirton 2014).
Certain expatriates who are unable to cope with the scenario choose to remain hostile and tend to develop a sense of injustice, towards the host nationals throughout the period of the assignment. Whereas some people who never learn to cope, tend to return to the home place or choose to socialize with only the other expatriates, until the return back to the place of origin.
United States of America has been chosen for this segment of the assignment and the organization that has been chosen is Microsoft. Two effective strategies adopted by Microsoft to successfully help the individuals to cope with the cultural shock as well as encourage and motivate the individuals includes two types of small training sessions such as the pre-departure training sessions and the post arrival training sessions.
Microsoft’s pre departure training briefing for American expatriates are usually held over a day with lectures and important work information conveying about the policies, practices, insurance, security, health and remuneration as well as the additional incentives. The expatriates from the other countries received a DVD with information that is a substitute from the briefing session as well as teaching the expatriates about the cross-cultural intelligence (Ang and Van Dyne 2015).
The post arrival training includes the cultural specific induction as well as the other general information that are received, which is organized by the host organization. The contacts with the existing expatriates who are familiar with the country are also present in the induction to help the new expatriates develop a familiar environment and avert the cultural shock.
Apart from this, the constant support and assistance from the host as well as the mother organization can be beneficial for the expatriates to adapt to the new environment and avert the cultural shock, using the constant financial as well as moral incentives and motivation.
With the help of this report, it can be concluded that HRM is indeed the most important performing wing of any organization in the world. Based on which top multinational companies like Microsoft can create it market in new market opportunities and flourish its business both nationally and internationally. IHRM although has certain limitations with its respective advantages, these limitations can be overcome with proper identification and analysis of the crisis. Cross-cultural training is essentially important for every organization that is performing globally. The expatriates are provided with rigorous training as well as they are armed with both theoretical and practical knowledge about cross-cultural intelligence, before entering a new cultural diversity. This is significant for the expatriates to help them adapt to the new environment as well as successfully avert the cultural shock using the training module that was initially imparted to the expatriates.
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