Understanding international human resource management from a Canadian perspective

Human Resource Management is a growing trend in business, as businesses make efforts to develop systems that increase employee investment in company goals and increase the development and recruitment of quality personnel. Significant changes have occurred within businesses that create significant reasons for streamlining to an HRM system, as the importance of competition is increasing exponentially across the board. Furthermore, the importance of global trade and global economies has also significantly impacted business, and there are very few remaining businesses that are not in some way affected by the trend toward globalization. Global competition is a rapidly increasing and influential aspect of business, even for those who do not trade globally or support markets with global ties:

Recent years have seen increases in global activity and global competition. As the multi-national corporations (MNCs) increase in number and influence, so the role of international HRM is those MNCs grows in significance. (Scullion, 1995, p. 352)

The difference between HRM and international HRM, according to Scullion, is that international HRM is far more complicated and therefore intricate than that of national HRM, or smaller HRM models. (p. 351) Traditional HRM is limited by culture and distance, as the majority of the stakeholders in such a plan are likely to be relatively homogenous or at the least attempting to assimilate the dominant culture, while this cannot be said of international HRM, where significant cultural issues, differences in laws, education, titles and other issues may play a significant role in the development of an HRM model.

Scullion stresses that International HRM may be particularly challenged by the fact that management is likely to be of a homogenous (origin) culture, which has limited or no international experience, beyond reports and/or limited visits to international sites. (pp. 358-360) This is a significant challenge, in that management may need to rely heavily on filed management or as Scullion stresses expatriate employees who are of the origin culture but who have or do live within the international community. Such positions do not always meet the full expectation of the company and its needs. (p. 360) the answer to this according to this brief introduction is to recruit and train highly skilled international managers to answer for the need to translate goals and standards across the cultural divide. (p. 377)

Globally competent managers are critical for the future success of all multinational organizations. To address this HR need, many strategic HR departments have initiated global leadership development programs to groom future leaders. There are two inherent assumptions in all global leadership programs. First, that "global competence" can be defined in terms of developmental dimensions. Second, that, once defined, these dimensions can be developed through global experience. (Caligiuri & Santo, 2001, p. 27)

The value of the development of such management futures is essential as is a greater understanding of the context in which international business will be defined by the growing number of trade agreements, such as NAFTA as well as the growing links between Canadian business, Asia, Mexico and South America, all influenced by international trade agreements and trends.

In the 1960s, though, regionalism began to develop, with the emergence of the European Common Market, NAFTA, ASEAN, and other regional trading groups. Countries kept their own political systems and social values but formed economic trading blocks. So big companies established regional headquarters within the various major trading blocs. Ford Europe was established in this period. This was when most of the regional and functional fiefdoms (with each region becoming very independent) became firmly entrenched at Ford. (This is what is referred to in this book as the "regional" corporate structure, an extension of the "multi-domestic" structure.) the fiefdoms were excellent at what they did: they squeezed every last ounce of efficiency out of the regional model. For example, back in the period of nationalism, Ford had multiple accounting activities around the world - there were fifteen in Europe alone. The regional model got it down to four: one in Europe, one in the United States, one in Asia-Pacific, and one in South America. (Briscoe & Schuler, 2004, p. 42)

The international trend, though it has been around a long time was traditionally based on the idea that the dominant culture in each region was responsible for many of the regional issues associated with international business. The current trend in trade agreements has demanded a reevaluation of such change that is likely to remain an aspect of IHRM for its entirety. "International law clearly delineates that companies have human rights responsibilities, although some of the specific responsibilities are ambiguous." (Aaronson, 2003, p. 63) Significant lawsuits against U.S., UK and Canadian Multinational organizations has made it clear that if business and government are not willing to police themselves, on issues of universal human rights, such as labor policy and political and social intimidation through the workplace then the international communities will do so independently through amendments and amalgamations to trade agreements.

Scullion reiterates the importance of the issue of International HRM in the second edition of Human Resource Management: A critical Text, edited by John Story. In this section Scullion elaborates on the ideas that were introduced in the first edition by the same author and editor. In so doing he develops a more complex understanding of the issues that will be decided by international trade and trade agreements and the growth of international markets. In development Scullion acknowledges that IHRM is far more complicated than simply recruiting and/or training adequate international managers to fill positions that had previously been filled by members of the origin culture of the company and that they issues include culture, laws, educational standards, regional standards, communications differences and international and national employment standards and laws. (2000, pp. 288-313) Other experts also stress that IHRM is far more complicated than simple management issues, as employees and managers must also follow international employment standards, established in large part by trade agreements. (Briscoe & Schuler, 2004, p. 143)

NAFTA signed in 1992 by Canada, the United States, and Mexico, aims at promoting more trade and closer economic ties between the three member countries. The treaty provoked considerable protests from groups, such as labor unions, concerned about possible negative consequences that such freer trade might have on employment, wages, and working conditions. It was then decided to negotiate a supplemental agreement on labor issues. This agreement (NAALC - North American Agreement on Labor Cooperation) was concluded in 1993. Under this agreement, all countries are committed to respect and enforce their own labor laws but, in addition, the NAALC provides mechanisms for problem-solving consultations and evaluations of patterns of practice by independent committees of experts. (Briscoe & Schuler, 2004, p. 145)