Being successful in the national market alone is not enough for an aspiring company. Globalization has presented enormous opportunities to grow the business in most parts of the world and businesses must utilize it to build wealth. Also, in order to sustain the competitive advantage and explore the possibilities of establishing a presence in multiple markets, the overseas operation is desirable and necessary. Operating in another country is risky, but can be overcome by deploying culturally sensitive managers in the business development process. In this context, the process of expatriation and expatriates are highly relevant and essential (Verešová, 2017).
Managing a business globally is never easy; it is relatively tougher than running it at the local level. A number of factors affect the existence of a global organization which includes economic, legal, political, cultural, and social environments. A number of risk factors also affect the overseas operation of a company such as political risks, currency risks, cultural risks, etc. A need for strong Human Resource Management is emphasized for effective global business (Berry, 2015). There are many aspects that can be overcome by the function of human resource management such as cultural risks, legal risks, etc. Relocating an employee from Melbourne to London is an opportunity for the company to develop skills in managing global human resources. The following challenges, factors and theories are useful for an HR manager in managing the repatriation process.
One of the political risks that have emerged recently with respect to business operations in the UK is Brexit; the exit of Britain from the European Union. The political decision of Britain to withdraw membership from the EU created uncertainties in several quarters such as economy, employment, international trade, etc. (Le, & Karlsson, 2017). Many organizations that operate from the UK are concerned about the unfolding crisis of lower economic growth, rising unemployment, etc. The Brexit context dominates the repatriation process of the employee who is to be relocated from Melbourne to London. The HR manager is required to apply all the resources to make the employee settle effectively in the new job in London.
The primary task of the HR manager is to successfully repatriate one employee from Melbourne to London for a managerial job in the UK. The process of expatriation is complex and the HR manager must be aware of the challenges the organization has and also about the challenges the employee is likely to face during travel and settlement in the new city. By application of various theories, information and data, the HR manager must develop a relocation program that will protect the interests of the organization as well as the employee (Abrashi-Smajli, & Baum, 2017). Because of the Brexit, many unforeseen issues might crop up in the employment process as well as managing the performance of the relocated employee. The HR manager must be prepared for the contingencies that may arise due to the changes in employment laws and business scenarios.
London is a prominent city not only for Great Britain but also for the World. It has a rich history and is a centre of happening in many sectors such as financial, economic, artistic, political and social. Expatriates are likely to be excited by the vibrancy of the city. The business opportunities, the market characteristics, agility of the service providers, etc. shall present a stimulating experience to the incoming employee.
One of the challenges the city of London poses before the expatriates are its density of population and the cost of living. Because of the population, London presents a crowded look, and the living expenses are on the higher side. The relocating employee must earn sufficient income as salary to pay for the accommodation, insurance, amenities, healthcare, etc. while staying in London (Sarkar, 2017). If the family also is relocating to this city, they must be prepared to live in smaller houses. Australians would not have much difficulty in navigating through the city, because there is a sizable population of immigrants from Australia, who look for support from each other and it is easy to get connected to their community.
Brexit is expected to disrupt many sectors of Britain and other European nations. The business houses are expecting a shortage in the availability of talented workforce because the movement of employees from other countries will be restricted. The business revenues also may be affected; the economists are forecasting slower economic growth in the coming years. With respect to the salary and expenses in the UK, the exchange rates of GB pounds is expected to fluctuate frequently, which can affect the financial planning of the employee (DeLarosiere, & Nielsen, 2017). The employment law is also getting changed due to emerging scenarios and the UK government must convert all EU laws into British laws.
The human resource functions are highly ordered and are effective in the UK. The performance appraisal systems are advanced and many of the employee decisions are based on performance reviews (Waddington, 2010). The HR manager must include the HR functioning in the UK while imparting expatriation training.
Expatriation often gives rise to problems in communication. One of the requirements of the expatriation process is to expose the employee to intercultural communication. It is applied to create awareness about a wide range of communication issues due to differences in employees’ religions, languages, communities, ethnicities, education, etc. Researchers have studied intercultural phenomenon to know how people from different cultures communicate, behave and perceive their social world (Nardon, Steers, & Sanchez-Runde, 2017). Three theories shall help the HR manager to orient the employee to a successful settlement in the job i.e. Hofstedes’ four dimension theory, Hall’s context and Time theory, and Trompenaar’s five dimension theory. They are described below briefly.
In the book Cultures and Organizarions (2005), Hofstede has elaborately described the four dimensions of cultural differences among societies of the world. The dimensions of the theory are provided below.
Edward T. Hall’s theory proposes that some cultures have high context communication, while others communicate with low context.
Trompenaars proposes that culture is defining relationships with time, nature and people. In his book Riding the Waves of Culture (1997), the author details a Five-Dimensional Theory.
The key challenges for an HR manager are to identify the probable issues the expatriate may face in the relocated country. As soon as the main challenges are known, the next step is to get the employee trained so s/he is able to adjust to the new culture without much problem. For gaining business internationally, it is important to train the employees and relocate as this can be seen as an investment for the business and can help it to gain more profit in the future.
Abrashi-Smajli, N., & Baum, M. (2017). Expatriate Managers from Emerging Economy Firms. In Expatriate Management (pp. 265-296). Palgrave Macmillan UK.
Berry, J.W., (2015). Global psychology: implications for cross-cultural research and management. Cross Cultural Management, 22(3), pp.342-355
DeLarosiere, J. J. H., & Nielsen, S. (2017). Information Uncertainty and Volatility in Financial Stock Markets: Commodity Price Fluctuations and Business Cycles. In Value Relevance of Accounting Information in Capital Markets (pp. 207-219). IGI Global.
Hall, E. T., & Hall, M. R. (1990). Understanding cultural differences. Yarmouth Maine, USA: Intercultural Press
Hofstede, Geert (December 1983). “Culture’s Consequences: International Differences in Work-Related Values“. Administrative Science Quarterly. Johnson Graduate School of Management, Cornell University. 28 (4): 625–629.
Hofstede, G., & Hofstede, G. J. (2005). Cultures and organizations: Software of the mind (2nd ed.). New York: McGraw-Hill
Le, T. H., & Karlsson, M. (2017). UK post-Brexit; The Service Economy Fallacy.
Nardon, L., Steers, R. M., & Sanchez-Runde, C. J. (2017). Developing multicultural competence. Space.
Sarkar, M. (2017). Living on the margins: undocumented migrants in a global city.
Trompanarrs, F., & Hampden-Turner, C. (1997). Riding the waves of culture. London, UK: Nicholas Brealey Publications
Verešová, E. (2017). Expatriates in multinational enterprises (MNEs).
Waddington J. (2010) European Works Councils and industrial relations. A transnational industrial relations institution in the making, London, Routledge.
Zafar, B., (2013). College major choice and the gender gap. Journal of Human Resources, 48(3), pp.545-595.Order Now