Larsen and Toubro's international human resource management expansion strategy

¶ … International Human Resources. This project sheds light on an Indian company that has decided to adopt the international human resource management plan. In doing so will allow the Indian company to explore many new opportunities that once wasn't available.

The economy is in a struggle and hopes for a better tomorrow are fading away. As a result, Larsen and Toubro decided to expand internationally. Soren Kristian and Henning Larsen founded Larsen and Toubro in 1938. The value of the company sits at 8.5 billion. According to www.larsentoubro.com, the value of Larsen and Toubro sits at 11.7 billion. It specializes in manufacturing and engineering services. It's quite evident that the company has experienced much success in the international world. The company has made the following achievements:

• Implemented hydrocarbon projects In India, Middle East and South East Asia

• Implemented power projects in India, the Gulf, and Sri Lanka

• Has the largest coal gasifier made in India

• Has made the biggest EO reactor.

• Has made the world's largest FCC regenerator.

• Has the highest viaduct in Asia

• Has the longest limestone conveyor

METHODOLOGY

This research is explained via qualitative and ethnomethodology means. Ethnomethodology is defined as the study of methods that are used by people to explain their actions. However, qualitative research is of much importance. This research includes the use of surveys and interviews. Adopting this form of research increases the reliability of the data. It is responsible for explaining the outcome of an experiment. Primary data is vital because without it, research would continue to be a repeat of another researcher's work. Primary data is usually gathered in case studies, trials, and studies. It is favored over secondary data because it adds legitimacy to whatever that is being researched. Although primary data can be quite useful, it has its limitations. It is often that the means of obtaining primary data can be quite expensive and time-consuming. The way in which a researcher retrieves primary data can be unethical if he or she doesn't receive consent from the participant. Also, primary data can be biased based on the opinions and beliefs of the researcher.

LITERATURE REVIEW

Cook (2006) defined change as "the coping process of moving from the present state to the desired state at individuals, groups and organizations undertake in response to dynamic internal and external factors."

Laurent (1986) defined International Human Resource Management, as "the challenge faced by infant field of International Human resource Management is to solve a multidimensional puzzle located at the crossroad of national and organizational cultures."

Desatnick & Bennett (1978) declares, "Many firms underestimate the complexities involved in international operations, and there is some evidence to suggest that business failures in the international arena may often be linked to poor management of human resource."

Morgan (1986) defines International Human Resource Management as "the interplay among three dimensions -- human resource activities, type of employees and countries of operations."

DISCUSSION

• Increased in responsibilities -- More responsibilities exist when the human resource department functions in various countries.

• Relationship between employee and family -- The manager of the Human Resources Department is responsible for the arrangement of the family and employee to the foreign land.

• Awareness of culture -- Employees should be aware of the culture that surrounds him or her. This can greatly affect the success of the business. Employees come from different ethnic backgrounds and cultures. Therefore, adjusting to the new culture is key for success.

APPROACHES TO INTERNATIONAL HUMAN RESOURCES Management PLAN

• Ethnocentric Approach -- Companies that adopt this approach view the world as one big marketplace.

• Polycentric Approach -- Unlike the ethnocentric approach, the polycentric approach views the globe as a differentiated market place.

• Geocentric Approach -- This is an approach where the organization utilizes methods whenever it feels necessary to do so.

IMPORTANCE OF INTERNATIONAL HUMAN RESOURCES Management PLAN

L&T paid importance to international boundary expansion. IHRM gained immense importance in the age of globalization. The basic points that support the aspect are as follows:

• Creating competent global leaders is the most essential factor in terms of a successful business in the world.

• The business world id becoming increasingly global. Most of the markets worldwide are now part of a global network.

• Today, India is one of the most emergent and exciting markets in the world. Technical manpower and skilled managerial activities are the best that match in the world.

• Foreign trade and FDI in India have been increasing at a rapid pace. India has become a very important destination for many MNCs.

• Increasing the business means increasing the manpower.

• It is also important for the international firms to note that it is not very easy to get a qualified and talented manager in every part of the world.

• Strategic managers can create successful businesses.

FACTORS AFFECTING INTERNATIONAL HUMAN RESOURCES Management PLAN

• National Culture -- Culture is defined as a set of beliefs shared by individuals of a country. Values are standards of how things should go. This explains the difference in requirements and expectations of employees who belong to different countries or cultures.

• Political Forces -- The political turmoil is an indication of the political changes taking place across the globe. The political scene in a country has a major impact on the business operations of the country. Managing employees and expatriates in a politically dynamic country is a challenging task for human resource managers.

• Economic Forces -- The economic conditions of a country will have an impact on the functioning of an organization operating in that country.

• Market Forces -- Industry specific changes can have a big impact on the management of human resources in the international scenario.

• Technology Changes -- Sweeping changes in a technology intensive sector can have a dramatic influence on the human resources function of a firm which operates globally. It also has an impact on the educational system in the country and hence the products of the system too.

• Legal Forces -- Changes in the legal system of a country have a major impact on its economic performance. Liberalization has made India the favorite destination of many MNCs planning an expansion or relocation.

• Labor Forces -- The availability of talented and skilled labor in a nation can attract a vast number of investors, which can add value to the business environment of the country. There should also be healthy labor-management relations.

• Corporate Culture - The corporate culture of an organization has the power to rule over all the other forces mentioned earlier. If an organization succeeds in establishing and strengthening its own unique corporate culture, it can serve as its best competitive advantage.

THE SEVEN C's OF INTERNATIONAL HUMAN RESOURCES

• Cosmopolitans -- Companies involved in international business employ people who are engaged to spend most of their time in other countries. They are classified into four components -- firstly, the true cosmopolitans who are the high-flying elite. Secondly, the expatriates who relocate themselves for several years to different countries and take their families with them. Thirdly, the occasional parachutist who spends short periods at overseas branches to deal with specific technical matter. Last but not the least the mobile worker is the person seeking employment in a foreign country.

• Culture -- Across the globe the human resource have to face immense difference in cultural background which result in the problem of adapting management. To avid misunderstandings and inefficiency initiatives from the side of employees is a must.

• Compensation -- Expectations of employees have to be realized and their expenses have to be reimbursed.

• Communication -- The management have to build up a strong network communication that will overcome the problems of culture, geography, and rivalry. Personal specialists in international companies are assigned with the duties of providing uninterrupted communication service to various branches across the globe.

• Consultancy -- The consultancy has two aspects, one as a bought-in service and another as a personal managerial goal. In IHRM the facility is different from that of national boundaries. The consultancy mode has to be given special attention and care to work with the subsidiary branches located overseas.

• Competence -- The primary aim of every business should be to increase the competence level in its people continuously. The responsibility increases even more for an international business because the competence level of people belonging to different cultural, political, and sensitivity level has to be developed.

• Coordination -- To create synergy and coordination in different types of divisional structures, formal and informal methods have to be applied in different parts of the business work.

CONCLUSION

The world has become a global village during recent times. Companies all over the world have geared up to meet the challenges of working in a global market. For global companies, management of human resource is a critical task. International Human Resource Management involves the following characteristics: increased difficulties of HR activities, cultural wakefulness and forbearance, stronger association with workforce and their families, dissimilar outlooks and necessities of employees across cultures, and managing of cross-cultural stipulations.

Thus establishing international presence primarily involves the management of the human resource, as they are the key and dynamic factors of a business that result in the success or failure of the international operations. As the global barriers are diminishing, international opportunities have become the need of the hour for every multi-national company.