International Human Resources Management Management Research Paper

International Human Resources Management

Name

Institution Affiliation

International Human Resources Management

Overview

Operating a business in the overseas countries significantly differs from the way it is done in the domestic country due to differences in culture, economy, politics, and legal factors. The current research will use Brazil as an international country where Canadian companies can extend their businesses. Various factors that multinational corporations (MNCs) should consider will be discussed in details. Brazil is the largest country in Latin America and occupies nearly half of the continent. It is the fifth largest country in the world with a population of approximately 200 million and is the largest economy in South America (EDC, 2012). The country is divided into five federal districts, which are then divided further into 26 states for political and administrative purposes. The country has a democratic system of governance with executive, legislative, and judicial branches of government. It has a federal type of government headed by a president and has a bicameral legislative organ composed of a federal senate and a house of representatives. Brazil adopted a new constitution in 1988, and the country has remained politically stable since the implementation of this constitution (EDC, 2012). Before the 1990s, the Brazilian government controlled much of the economic activities with state-owned businesses operating in several key sectors, such as steel, finance, mining, aerospace, oil, gas, and power. However, since then, various governments that have been in power have allowed the full or partial privatization of companies and even foreign investments by multinational corporations. Brazil and Canada have had a good relationship as far as business and trade are concerned. For instance, in 2011 alone, Canada exported goods worth over C$2.7 billion to Brazil, making the eleventh largest exporter in the country. The major commodities exported include fertilizers, machinery, paper, and its products, fuel, and oils, and electrical appliances, each amounted to C$714 million, C$295 million, C$240 million, C$686 million, and C$140 million, respectively (EDC, 2012). Over 500 Canadian MNCs are currently operating in Brazil and in 2010, the country was the eleventh largest recipient of Canadian MNCs. The paper will discuss the various factors that influence the operation of human resource departments in foreign countries. Factors such as, economic, political, cultural and legal will be discussed comprehensively in this paper.

Key Factors Influencing IHRM Strategy

Management of human resources in different economic, cultural, political and legal contexts presents some challenges (Szabó, 2014). Nevertheless, when well-managed, international human resources yield significant profits. Several studies show that well-managed international resources and other factors account for more of the variance in productivity and profitability that does technology or research and development. Some of the most common impediments to effective human resource management in foreign countries include differences in workforce/organizational values, cross-cultural adoptions, management turnover, and styles of management (Szabó, 2014). It is fundamental that these concerns be considered by professionals and managers as they do business and establish operations internationally.

Political and Legal Influences

The stability and nature of political systems differ from one country to another. For instance, the United States and European countries enjoy relatively stable political systems, and MNCs are most likely to thrive in such regions (Szabó, 2014). While presidents, premiers, prime ministers, senators, governors, and representatives might change, the legal systems in these countries are well established and never change. Consequently, international companies depend on this consistency and continuity to operate their business. Nonetheless, in many other countries, political and legal systems are inefficient and turbulent. In some nations, governments are frequently overthrown through military coups that are commonly accompanied by civil wars, rendering business operations in such countries impossible. Others are reigned by despots and dictators who use their power to force global companies to buy raw materials, goods, and services from the firms in the host countries or those controlled by the rulers and their families (Szabó, 2014). Moreover, there are other countries ruled by one party, which has resulted in pervasive corruption, making it harder for international firms to operate effectively. Furthermore, legal systems differ in stability and character and some instances, enforcing business contracts becomes difficult as a result of internal political affairs.

In Brazil, operating an international company would have been difficult before the 1990s because most of the companies were state-owned and no any form of privatization was allowed (EDC, 2012). However, since then, the political landscape has changed, and there are several full and partial private firms as well as MNCs from various countries. Also, the political system in Brazil is relatively stable with a democratic type of government. The commercial litigation is under the jurisdiction