INTERNATIONAL MANAGEMENT

GROUP ASSIGNMENT

Compiled by:

Satrio

(C1K014

Rian

(C1K014

)
)

Agustina Dias Kartikasari Algunto (C1K012006)

Iftitahul Maulidah

(C1K012015)

Latzio Muhammad

(C1K0120

Muhammad Bayu Wirawan

(C1K012031)

Desy Fitriyani

(C1K012034)

INTERNATIONAL MANAGEMENT
ECONOMICS & BUSINESS FACULTY
JENDERAL SOEDIRMAN UNIVERSITY
2015

CHAPTER I

INTRODUCTION

Every organization is essentially a combination of physical and human resources

(HR). Physical resources refer to materials, money and machines pre-arranged by the
organization for production or trade. human resources, on the other hand, refer to the
knowledge, education, skills, training and proficiency of the members of the
organization. All organizational resources are important for achieving the objectives of
an organization. In fact, the effectiveness of an organization lies in the judicious
blending of the two resources to achieve optimum competency.
However, for a long time, it was felt that the efficient utilization of physical
resources was primary for developing an organization. This was so because the
acquisition of physical resources resulted in a huge outflow of funds and those assets
carried a definite value. On the contrary, it was felt that hiring employees never cost
anything substantial for a firm and it was also quite easy to replace them. This made
human resources less important for employers. But, in the past decade, employers have
realized that intellectual capital is critical to business success. The main reasons for this
change are due to the understanding that
Product innovation and marketing strategy, which are crucial for market survival
and growth in a competitive environment, are possible only when a good and creative
workforce is present. The challenge, opportunities and even disputes of creating and
managing organizations arise mostly from people-centred problems.

People are not alike and they cannot be treated identically. They differ physically
and psychologically. These differences require individual attention in order to achieve
the optimum productivity.
Indian organizations are no exception to this change in understanding. They
realize that technology by itself cannot triumph in the market and that technology
coupled with a workforce is essential for the success of an organization. The growing
importance of HR in Indian organizations is best reflected in their mission statements.

CHAPTER II
DISCUSSION

Meaning of human resources

Organizations are managed by people and through people. Without people,
organizations can never exist. Indeed, people who make up the human resources of a
company are unique and they can make or break an organization, depending upon their
level of commitment, contribution and cooperation. Hence, it is relevant to know the
intricacies of the term human resources first, before we discuss HR management (HRM)
in detail. Different people have defined human resources differently.
Uniqueness of Human Resources
The distinct features of human resources are:
1. Human resources are the only assets that appreciate over a period while physical
resources just depreciate with years.
2. Further, human resources alone can produce an output larger than the input. This
is possible due to the creative skills of humans. Creative thinking is the process
of predicting, envisioning and then inventing an idea, concept or insight along
innovative and alternative lines. People in the organization are the only basis for
such creativity and there is no obvious limit to their imagination.
3. Organizations require human resources of different types to operate all physical
resources. Thus, they provide utility value to each one of the physical assets. In
fact, the real worth of a physical asset depends on the quality and calibre of the

people working with it. An incompetent workforce will spoil the physical
resources available to it.
4. There is a growing realization that the flexibility of an organization depends
more on people than on any technical factors. Modern equipment may ensure
quality and cost-competitiveness but the operational flexibility, which is core to
product modification and innovation, is provided only by the employees. This is
so since humans alone could grasp the situation adequately and respond suitably.
The effective utilization of human resources is a complex task. It requires
greater foresight and strategic consideration on the part of the management. For
instance, attracting the most qualified employees, matching them to the jobs for which
they are best suited and retaining them within the organization are significant for the
success of an organization. But this calls for closer coordination and better
understanding between the employers and the employees. However, many enterprises
are too large to permit close contact between the top management and the employees.
This is where HR managers act as a crucial link between the management and the
employees.
HRM, as a field of study, makes a sincere effort to provide knowledge, skills and
ability for managing human resources more effectively. The basic task of HRM is the
selection of the right person for the right job at the right time to carry out the activities
of an organization in the most efficient way. It also aims to enhance the satisfaction,
morale and productivity of employees, control labour turnover, and help organizations
increase their performance by providing the necessary training and development
opportunities, suitable working conditions and appropriate career growth to employees.

Objectives of HRM

The primary objective of HRM is to take care of the work life of the employees
from the time they join the organization to the time they leave it, while ensuring their
best possible cooperation in achieving the organizational goals and objectives. This
broad objective of HRM can be classified into the following specific ones:

To act as a liaison between the top management and the employees

To arrange and maintain adequate manpower inventory, which, in turn, ensures

the smooth working of the organization

To offer training as a way of developing skills, enhancing productivity and, most
importantly, increasing individual and organizational performance to achieve the

desired results
To devise employee benefit schemes for improving employee motivation and

group morale and enhancing employeremployee cooperation

To ensure and enhance the quality of work life, which refers to the employees

perception of their physical and psychological well-being at work

A Tata
company
shallvalues
provide
opportunities
to employees
all its employees
and
To help
keep
up ethical
andequal
behaviour
amongst
both within

all and
qualified
for employment without regard to their race, caste,
outsideapplicants
the organization
religion, colour, ancestry, marital status, gender, sexual orientation, age,
Box 1.3 describes the HR objectives of the Tata group.
nationality, ethnic origin or disability.
HR policies shall promote diversity and equality in the workplace as well
as compliance with all local labour laws, while encouraging the adoption of the
best international practices.
of the
a Tata
Tata Group
company shall be treated with dignity and in
Box 1.3 HREmployees
Objectives of
accordance with the Tata policy of maintaining a work environment free of all
forms of harassment, whether physical, verbal or psychological. Employee
policies and practices shall be administered in a manner consistent with the
applicable laws and the other provisions of this code, respect for the right to
privacy and the right to be heard, and that in all matters equal opportunity is
provided to those eligible and that decisions are based on merit.

International Human Resource Management

International HR managers face a more complex task than their domestic
counterparts because differing cultures, levels of economic development, and legal
systems among countries may require companies to adapt their hiring, firing, training,
and compensation programs to each country.
Firms must decide whether managers will be selected from the home
country, from the host country, or from third countries. Training and development in an
international firm may be more complex than in a domestic firm. Finally, compensation
systems must be adapted to meet the needs of each countrys labor market.

International Managerial Staffing Needs

There are two broad categories of staffing needs facing international human
resource managers: (1) recruiting, training, and retaining managerial and executive
employees; and (2) recruiting, training, and retaining nonmanagerial employees, such as
blue-collar production workers and white-collar office staff.
Scope of Internationalization

Organizational structure usually evolves along the following lines: export

department, international division, and global organization.

As the organization

evolves, so do the staffing needs.

Most firms begin their international expansion with small-scale exporting. Thus,
during a firm's initial foray into foreign markets, a home country citizen, who may or
may not have special training in working in foreign markets, usually manages the firms
international transactions. Later, when the firm establishes an international department,
subsidiary managers (usually host country citizens) report to the vice president of the
international division (usually a home country citizen).

As a firm further expands its operations in a global organization, a team of managers

with expertise in the firms product lines, necessary functional skills, individual country
markets, and the firms global strategy is usually assembled.

Centralization versus Decentralization of Control

Firms that centralize decision making at headquarters typically favor home
country managers while firms that decentralize decision making to the subsidiary level
often employ host country nationals. Since most companies do not fall at one extreme

or the other, most companies have a combination of both home and host country
managers.
Performance Appraisal and Compensation
Assessing Performance in International Business

Performance appraisal is the process of assessing how effectively a person is

performing his or her job.

Performance appraisals have several important

objectives. It is a source of feedback to individuals as to their performance, it

provides a basis by which top performers can be rewarded, it highlights areas
where additional training and development may be required, and it identifies
problem areas that may require changes.

In many cases, firms must employ different standards when evaluating the
performance of subsidiaries and their employees because each subsidiary is
likely to have a unique set of circumstances and outcomes. Performance
appraisals in international firms may not be conducted as frequently as in a
domestic firm.
Determining Compensation in International Business

Competitive international firms provide prevailing compensation packages for

their managers in each market.

The text provides examples of common

components in a compensation package in Germany, Japan, Britain, and the U.S.

Compensating Expatriate Managers. Compensating expatriate managers can

be a complex process because factors such as differences in currency valuation,
standards of living, lifestyle norms, and so forth must be taken into
consideration.

A cost-of-living allowance may be given to managers to offset differences in the

cost of living in the home and host countries. A hardship premium (also
known as a foreign service premium) may be paid to managers that accept
assignments in relatively unattractive locations.

CHAPTER III
SUMMARY

Human resources refer to the knowledge, education, skills, training and

proficiency of the members of an organization. HRM is concerned with the policies and
practices that ensure the best use of the human resources to fulfil the organizational and
individual goals. The primary objective of HRM is to take care of the work life of
employees even while ensuring their best possible co-operation for achieving the
organizational goals and objectives. The personnel aspects of management run through
the entire organization. All managers are, in a way, HR managers as they get involved in
HR activities such as choosing, training, inducting and compensating employees.

CHAPTER IV
REFERENCES

Unit - 1 : Introduction to Human Resource Management

Accessed from Unit - 1: https://online.vmou.ac.in/oldweb/studymaterial/BBA

%2008.pdf

CHAPTER 1 Introduction to Human Resource Management

Accessed from:
https://www.academia.edu/6794754/CHAPTER_1_Introduction_to_Human_Resource_
Management_CHAPTER_OBJECTIVES

HR study case

Adapted from: http://www.tata.com/aboutus/articles/inside.aspx.

CHAPTER 19 International Human Resource Management and Labor Relations

Accessed from: http://www.slideshare.net/hunjoo14/griffin-ib6e-im19-7th-editionrevisedsd