The study by Darrag et al. uses HRM as a mode to identify several clear obstacles to effective recruitment on an international scale. A major point of concern for MNCs, the article indicates, is the difficulty of penetrating culturally ingrained models of hiring and promoting. In such contexts as Egypt, Iran and Taiwan, the article reports that nepotism remains a powerful force preventing the use of merit in recruitment situations. These are concrete examples of the culturally-bound challenges facing the international human resource manager.
The Human Resource Planning theory states that these challenges require an HR department that is formulated according to the cultural particulars of a host country. The article by Darrag et al. concludes that where MNCs are able to make adjustments through their Human Resource Management departments, host countries are likely to see greater economic benefits. Yielding this presumption based on its case examination of MNCs operating in Egypt, the article contends that "As the acquisition of skilled personnel would substantially help in personal, organizational, and national success; ef-cient and effective management of the human element would substantially help any economy like Egypt to prosper and handle its workforce unemployment problems (Price, 2007, p. 113; Armstrong, 2006, p. 35). This effective management would require restructuring basic HRM functions in the market to be set-up on ef-cient and effective bases and processes. One of such basic functions is recruitment." (Darrag et al., 101)
Here, Darrag et al. resolve that in accordance with the Human Resource Planning theory, MNCs must rely on highly dynamic, flexible and culturally specific HRM approaches in order to obtain the benefits of global expansion. Likewise, the theory extends to developing nations which often play host to these MNCs, denoting that these local economies are also the direct beneficiaries of pragmatically oriented HR strategies.
Question 3) Please discuss how the knowledge-based view of the firm applied to international HRM may inform and guide HR personnel in the practical planning and implementation of international assignments (expatriation).
The knowledge-based view of MNCs argues that the integration of personnel both from a firm's host country and from its primary base of operation will stimulate the development of a shared cultural, organizational and operational knowledge that can bring unification to a diffusely spread company. Today, it is not uncommon for personnel to be drawn from one pool and placed in the other in order to facilitate greater intimacy between operational aspects separated by geography and culture. This condition is also producing a pattern which as a byproduct has forged what is referred to as a 'knowledge economy.'
At its most basic level, the knowledge economy may be said to exist within an organization, a region, a state, an industry or a broad system such as a global alliance. This is an extremely important force for helping to yield the true value from global labor exchange practices. Expatriation is a practice which has the potential either to significantly improve or dramatically impede the culture of knowledge facilitated within any given organization. As Brewster et al. (2007) point out, "since expatriates are very expensive, an organization has to clarify why it is sending them on an assignment. For an organization they represent a high cost investment. This cost should be justified against a set of payoff benefits." (p. 236)
The research by Brewster et al. also provides a theoretical framework for understanding the necessity of the knowledge economy in properly managing international HR concerns. The Cross-cultural theory denotes the need for proper cross-cultural training both for those who will be dispatched to host countries and those who will receive them. The text points out that at present, MNCs seem to fall largely short of this demand, with only 20% of HR departments surveyed in one study reporting to any type of cross-cultural training program. This suggests that many MNCs are not taking the proper steps to prepare for the knowledge-sharing which must facilitate internationalization. Brewster et al. provide two dimensions of cross-cultural training which are seen as the responsibility of HR managers. The text indicates that consideration must be given to the degree of interaction between expatriates and the host country and that consideration must be given to the relative similarities between the two interacting cultures which might be seized upon to ease knowledge-sharing.
The emphasis on the knowledge economy within an organization denotes that preparations will be made to facilitate the cultural exchange between expatriate personnel and their receiving firms. This means that any linguistic, practical or work-place normative differences between the two parties are to be embraced rather than eroded. The experience and practices which are of value to the respective cultures will ultimately contribute to a greater shared knowledge within the global organization.
Ardalan, K. (2008). Globalization and Culture: Four Paradigmatic Views. International Journal of Social Economics, 30(5), 513-534.
Brewster, C.; Sparrow, P. & Vernon, G. (2007). International Human Resource Management. London: CIPD.
Darrag, M.; Mohamed, A. & Abdel Aziz, H. (2010). Investigating Recruitment Practices and Probmes of Multinational Companies (MNCs) operating in Egypt. Education, Business and Society: Contemporary Middle Eastern Issues, 3(2), 99-116.
Morley, M.J. & Collings, D.G. (2004). Contemporary Debates and New Directions in HRM in MNCs.…