International Firms' Practice of International Management Functions

Managing International Business
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Managing International Business
Introduction
International businesses operate beyond national boundaries. Like any business, multinational firms engage in various operations or activities as they expect to realize specific goals in the long run. Most importantly, these firms practice the commonest international management functions in various ways. For instance, international companies consider different human resource management staffing approaches like the ethnocentric, polycentric, and geocentric models to hire key personnel for specific positions. They apply ethical frameworks such as egoism and utilitarianism to guide their operations and effective interactions at the organizational level. Also, organizations manage political risks using integrative and defensive methods. Specifically, the methods have several strategies like political lobbying, political donations, contingency planning, and risk insurance. Practicing these management practices allows the firms to control the problems of working in selected markets and intensify success opportunities globally. The essay will comprehensively discuss political risk management, ethical behavior, and human resource management as the leading international business management functions.
International Firms’ Practice of the International Management Functions
Three main staffing approaches, the ethnocentric, polycentric, and geocentric models, are important for international businesses to consider in their Human Resource Management (HRM) frameworks (Harzing, 2001). Firstly, the ethnocentric staffing tactic entails a company’s use of parent country nationals to manage foreign processes. Workers from the parent firm or headquarters fill the foreign subsidiaries’ crucial positions. The model suggests an organization’s operations, techniques, and values are transferable to other locations. Although the approach might offer uniformity and effective control, it can fail to use local skills and cultural information and interfere with local responsiveness.
Secondly, the polycentric staffing technique uses a decentralized strategy, permitting local employees to manage subsidiaries. The model alleges that local staff better comprehend the culture, market, and business operations. Therefore, it believes that local managers can control organizational activities more efficiently. The polycentric staffing approach helps evade the language barrier and get more business networks. However, this model can lead to insufficient communication and collaboration between subsidiaries and headquarters. It can also create a strategic alignment gap between the parent corporation and its foreign practices. The polycentric staffing model indicates to the local and main governments the corporation’s dedication to the market. The technique allows companies to think internationally and perform locally. The local managers assure a local understanding of culture and control of the business, permitting firms to familiarize their model efficiently. Overall, the staffing model differs from geocentric and ethnocentric models primarily because the firm mainly utilizes host country inhabitants or managers from the secondary location.
Thirdly, international businesses can also use the geocentric staffing method, which advises organizations to select workers using merit. It is the best model because it relies on something other than nationality to get the best people for crucial positions. It places staff in positions based on their critical talent, skills, and capacity to drive the business to higher levels. The approach values a worldwide mindset, diversity, and inclusion and encourages businesses to transfer knowledge beyond boundaries (Kiuna, 2013). This technique might be disadvantageous because corporations occasionally must conform to the strongest pressures to recruit residents. It utilizes global and local talent, promoting efficient coordination and interaction among subsidiaries. Most importantly, the method is fair since it seeks to employ the best talents regardless of their backgrounds. The global management group can decrease cultural misinterpretations and promote a multinational enterprise’s (MNE’s) awareness of market conditions in various locations.
Although women’s underrepresentation in international business management does not occur in all firms, there is no significant priority for women in the management regime. The underrepresentation happens due to several stimulating factors. According to Insch, McIntyre, and Napier (2008), the glass ceiling is the leading factor contributing to fewer women in organizational leadership positions across different global businesses. This refers to the synthetic or invisible barriers that stop women and minority ethnic groups from proceeding past a specific level, like in management. Another factor limiting women’s representation in international management is their lack of interest in the roles. Women sometimes lack the concern to participate in global business assignments for several reasons, such as nurturing kids, the effect on the husband or partner, or conforming to cultural principles for female contribution in workplaces. Organizational prejudice during hiring also contributes to fewer women in key organizational management positions. The stereotypes that women never involve in international management drive HR managers towards leaving women out of the selection phase during hiring.
Recruitment is the leading HRM department function. The process is crucial because it increases an organization’s strategic recruitment and competitive advantage. Regarding today’s international business context, most firms are outsourcing recruitment services. However, some depend heavily on channels such as job advertisements and social media platforms to explore potential recruits for new organizational positions. Some firms utilize relevant recruitment software to improve their recruitment processes. Examples of this great software include Applicant Tracking System and Candidate relationship management. International firms try hard to improve, knowing that appropriate recruitment and selection is the foundation of every company. Also, human resources’ effectiveness largely relies on fair and sensible recruitment steps. The critical goal of including recruitment and selection is to locate unique candidates with talents to serve the specific organization. The employment procedure enables recruitment to come first before selection, determining who takes an unfilled position. The selection step also allows the selection of a candidate from the qualified group (Karim, Bhuiyan, Nath and Latif, 2021). Organizations follow different processes or steps when recruiting employees. For example, the authors allege that the essential five stages in a contemporary recruitment process include strategy formation, objectives, actions, process variables, and outcome. Overall, the current international firms have adopted new approaches in the recruitment and selection process.
Performance management is another crucial activity within the HRM function. Most importantly, it constitutes performance evaluation and appraisals. Global organizations have identified essential means to include significant performance management resolutions in their business practices. This has been highly encouraged due to the urge to mitigate the inadequacies of traditional performance management and be updated in the current business landscape. First and foremost, today’s international corporations use the performance management concept to define company expectations and communicate them among the organizational members. It helps them recognize what to expect from workers, including performance goals, standards, and workplace roles. Secondly, organizations use performance management to provide workers with constant performance-related feedback. This feedback is often important as it helps the employees improve their workplace performance leading to goal achievement. Thirdly, the current era is experiencing rapid globalization – a reason that has made technology an essential ingredient in business (Weisblat, 2019). For instance, technological advancement has enhanced performance management processes since businesses can use performance management software to systematize processes like performance evaluation and goal-setting actions.
Training and development are important components of the modern company’s HRM strategy. In the current highly competitive business setting, an organization considers employees its major assets. They play an increasingly active role in a company’s prosperity. As a result, international businesses prioritize training as part of their human resource development. The companies equip these unique assets using efficient training methods to promote exceptional job performance. The training departments create learning programs for employees to achieve expertise and understanding. Such learning and developing programs involve e-learning modules, on-the-job training, mentoring, and classroom coaching. Today’s firms foster a sense of constant learning by providing regular training chances for all members. Also, the contemporary global business space prioritizes training using the role-play technique. Specifically, this technique requires the trainees to react to particular challenges and people’s anticipations that they may experience in their duties. Role-playing is a modern approach that trainers can use to coach skills like problem-solving, effective communication with clients, negotiations, and overall productivity while completing duties (Lekhi and Nussbaum, 2015). Modern firms incorporate these most useful approaches in their training and development programs.
International associations are largely focused on fostering diversity and inclusion in the workplace as part of their HRM function. The concept has become crucial for today’s firms as they realize the advantages of developing a diverse and all-inclusive working environment. Encouraging diversity and inclusion ranks as a top responsibility human resource managers should deal with. HR experts ensure that a firm recruits staff with diverse workers while forming a culture that respects and values every member of the specific workforce (Garg and Sangwan, 2021). Corporations form an inclusive environment by adopting numerous positive values like empathy and collaboration. Adopting these values can easily occur through employee training, where they are instructed on maintaining a coherent workforce and allowing workers to share their thoughts freely. The international firms also conduct regular seminars and workshops where leaders converge to gain useful knowledge and capacity.
Organizations apply ethical theories to guide their operations and effective interactions at the organizational level. According to Crane and Matten (2010), an ethical theory entails the principles or regulations that define right and wrong for a specific situation. Firms use theories as a guiding technique for their practices and decision-making activities. The different theories offer varying contexts on what to consider wrong or right and help organizational members to solve complex problems and understand each other in a conflict scenario. Implementing theories and including them in an organizational culture help encourage fairness, transparency, and consistency in processes or decisions made. Ethical egoism and utilitarianism are two important theories for controlling ethics within a business environment. They are significant and serve different purposes.
Ethical egoism believes everyone is morally obliged to increase their utility and explore their desires despite coming at other people’s expense. Ethical egoism’s main intention is to foster self-interest and individual contentment as the moral goal. However, the ethical theory might constitute undesirable implications, such as encouraging self-centeredness and disregarding others’ welfare, resulting in conflicts within a firm. Secondly, the utilitarianism theory concentrates on the interests of the greatest number of individuals. It argues that actions must look forward to maximizing happiness or utility for most individuals. It encompasses focusing on activities that create more benefits than harm for most people involved. The function of this theory is to form a moral basis that informs effective decision-making that leads to the utmost general welfare. However, executing the ethical theory in international business might present problems like correctly evaluating actions’ outcomes and possibly ignoring the rights of the minority group not considered (Luthans and Doh, 2018). As utilitarianism concentrates on the majority’s wellness, ethical egoism focuses on a person’s pleasure and self-interest.
International companies accomplish the ethical behavior function in various ways. The first one e...