• Home
  • Finance
    • Financial Management
    • Strategic Management
    • Investment Analysis and Portfolio Management
    • Project Management
    • Islamic Banking & Finance
    • Auditing
  • Marketing
    • Principle of Marketing
    • Marketing Management
    • International Marketing
    • Advertising & Promotion
    • Commercial Challenges
  • HRM
    • Human Resource Management
    • Principles of Management
    • Training & Development
    • Employee Performance Management
  • Others
    • Introduction to Business
    • Business Communication
    • Banking & Finance
    • Entrepreneurship
    • Economics
  • Personal Skills
  • Tips & Tricks
  • About Us
    • Contact US

Business Study Notes

B.Com, M.Com. BBA & MBA Exam Study Online

  • Home
  • Finance
    • Financial Management
    • Strategic Management
    • Investment Analysis and Portfolio Management
    • Project Management
    • Islamic Banking & Finance
    • Auditing
  • Marketing
    • Principle of Marketing
    • Marketing Management
    • International Marketing
    • Advertising & Promotion
    • Commercial Challenges
  • HRM
    • Human Resource Management
    • Principles of Management
    • Training & Development
    • Employee Performance Management
  • Others
    • Introduction to Business
    • Business Communication
    • Banking & Finance
    • Entrepreneurship
    • Economics
  • Personal Skills
  • Tips & Tricks
  • About Us
    • Contact US
Home » What is the Importance of Human Resource Management for Business?

What is the Importance of Human Resource Management for Business?

By Richard Daniels Reading Time: 4 mins
Updated August 12, 2020

Importance of Human Resource Management: Human resource management in an international business plays a significant role at the strategic level. The executive manager of human resource management in an international business actually acts as a decision-maker & strategic partner of the business organization.

The complete comprehension of the overall global system is essential so that the productivity of the employees of the entire organization is maximized. Human resources must also be global in nature in relation to its global organization.

Importance of Human Resource Management

The role played by human resource management in international business should be oriented positively towards international human resource management along with the identification of the strategic role that must be executed. The importance of human resource management for international business can be explained in the following ways.

Importance of Human Resource Management

  1. Stages of International Involvement:

When an organization initiates international operations, then it has been passed through five stages which are as follows.

  • Domestic Operations
  • Export Operations
  • Joint Ventures or Subsidiaries
  • Multinational Operations
  • Transactional Operations

As the organization passes from a lower stage to a higher stage, the human resource functions need to be more adapted to the diverse economic, cultural, legal & political environments.

For example, when the human resource management is passing through stage five (transactional stage), policies & procedures should be developed & implemented that maintain diversified employees belonging to different cultural backgrounds in order to develop the identity of share corporation along with a common vision. The global business evolves through the following stages.

  • Exporting
  • Licensing
  • Franchising
  • Multinational Corporation
  • Global Corporation

It really enhances the importance of human resource management for multinational companies.

  1. Global Human Resource Management:

The human resource policies & procedures should be employed that best meet the global requirements so that the wider organizational objectives can be achieved. The human resource management in an internal business should be operated similar to the domestically operated HRM by promoting the more integrated working system.

  1. Global Staffing:

For the achievement of the goals of the international organization, the specific jobs should be filled with specific individuals at the proper time and proper place. For this purpose, there must be global human resource planning, recruitment & selection procedures for obtaining the required employees.

  • Types of Staff Members:

The following are different types of employees that can be acquired by global organizations.

Expatriate: Expatriate is an employee who is working in an international organization and he is not the citizen of that country in which he is currently working, but he is the citizen of the country in which the headquarter of the international organization is located.

Host Country National (HCN): Host country national is the employees who are working in the international organization & he is also the citizen of the country in which he is currently working. But the headquarter of the organization is located in some other country. Most of the employees working in international organizations are host country nationals.

Third Country National: Third country national is the employee belongs to one country and who works in the international organization in another country, but the headquarter of the international organization is located at some third country.

  • Approaches to Global Staffing:

The following are some of the approaches to global staffing.

Ethnocentric Staffing: The higher-level foreign positions in an international organization are filled with expatriate employees.

Polycentric Staffing: In this kind of staffing, most employees of the host country are hired by the international organization for many tops to bottom level positions.

Regiocentric Staffing: It is similar to polycentric staffing, but in this case, the regional subsidies of the international organization work together as a single unit.

Geocentric Staffing: In this kind of staffing, the international business used a worldwide integrated strategy.

In all kinds of above staffing methods, global training & development are required because of the differences in the people, jobs and organizations.

  1. Global Human Resource Development
  • Expatriate Development:

In this kind of training & development, the process is initiated immediately after the selection of the employees and even if the operations of the international organization do not start.

  • Repatriation Orientation & Training:

Before the repatriation, training & development are essential to be started in which the expatriates bring back to the home. The employees and their families are provided with orientation & training to prepare them for the return to the culture of the home country & to prepare other supervisors & subordinates of the expatriates for the return.

  1. Global Compensation & Benefits:

Because of the pressures of a high wage rate, organizations are compelled to operate in other areas of the world in order to maintain competition globally. Generally, the level of global compensation is lower. However, when the global compensation packages are developed by the organization, certain factors must be considered prior to living costs, variations in the laws, tax policies, etc.

  1. Global Safety & Health:

When the employees in the (international) organization are safe & healthy, they are turned into more productive & beneficial. So the human resource management in an international organization prepares & implements certain safety & health-related programs for making their employees more beneficial & productive.

Usually, the US-based global operations are regarded as the much healthier & safer than the operation of any other host country. But the operations conducting in the United States of America are much safer & healthier. So, all the international organizations should consider the working environment standards & other safety programs of the organizations that are belonging to and working in the United States of America.

Above are just only a few ways of the use of human resource management in the business organization. There are a lot more functions of human resource management, which also indicates the importance of human resource management for multinational companies.

Author at Business Study Notes
Richard DanielsAuthor at Business Study Notes

Hello everyone! This is Richard Daniels, a full-time passionate researcher & blogger. He holds a Ph.D. degree in Economics. He loves to write about economics, e-commerce, and business-related topics for students to assist them in their studies. That's the sole purpose of Business Study Notes.
Love my efforts? Don't forget to share this blog.

Related Posts:

  • 10 Must Have Project Management Skills
    10 Must Have Project Management Skills
  • Process of MBO (Management by Objectives) - Explained with…
    Process of MBO (Management by Objectives) - Explained with Examples
  • Partnership Agreements - Types Of Partners
    Partnership Agreements - Types Of Partners
  • What is the Process of Motivation? Explain in detail
    What is the Process of Motivation? Explain in detail
  • 8 Important Strategic Management Key Terms
    8 Important Strategic Management Key Terms

Filed Under: HRM, Human Resource Management Tagged With: Human Resource Management Importance, Importance of HRM, importance of human resource management

Related Posts

System-Views-of-Management-image

System Views of Management

System Views System views of management associates with the Management division of the organization and it assumes that all of the organizations are … [Read More...]

Leadership Theories

Situational Leadership Theories

Situational Leadership Theories Situational model of leadership is a factor that emphasizes the behavior of the leaders regarding different situations. … [Read More...]

Behavioral Leadership Model

Behavioral Leadership Model

Leadership  Leadership is the most critical and complex responsibility across any organization. It is because the leadership requires to be realistic, … [Read More...]

career development process in hrm

Career Development Process

Career Development Process Today's career development process has become a threat for students, especially a question that may stun many students who have … [Read More...]

Strategic leadership

Strategic Leadership Model

Strategic Leadership Model The strategic leadership model is basically the study of the leadership style. It describes the ways of modernizing an … [Read More...]

Types of Managerial Decision Making

Types of Managerial Decision Making

Managerial Decision Making Decision Making is an art of selection of one feasible alternative decision from many. Therefore types of managerial decision … [Read More...]

Quantitative-management-approach

Quantitative Management Approach

Quantitative Management Approach The quantitative management approach is used to enhance decision making power by using quantitative tools. As well as … [Read More...]

Effective-business-messages-image

Effective Business Messages

Effective Business Messages The process through which business messages are effectively prepared that have the potential to create desired results from … [Read More...]

Search the Site

ADVERTISEMENT

Business Study Notes

Business Study Notes is all about business studies or business education. Visit us to find here free business notes of all the subjects of B.com, M.com, BBA & MBA online.

Disclaimer

All the images and videos present on the Business Study Notes are not owned by us, if you found anything under copyrights, please Contact Us, we will remove it ASAP.

Categories

© Copyright 2023 Business Study Notes. All rights reserved. Privacy Policy, Sitemap.  
DMCA
PROTECTED