Institutional Contexts IHRM trends Complexity Challenges and Choices in Future

Again we touched upon areas such as importance of culture in HRM and also the organization strategy and HRM etc. Although these areas are very interesting we found it difficult to see the practicality of it. For an example in one point it was said that if a certain culture is high in power distance and have respect for authority then the authority should be centralized and if not it should decentralized. But in practice it is not the culture that influences the structure most but the objectives and the task of the organization (manufacturing companies are more centralized while service oriented companies are decentralized).

The most interesting form of structure for us it was the Matrix structure; it was different from all other traditional structure and had certain unique features. A matrix structure creates dual lines of authority and combines functional and product departmentalization (Robbins, Millett, 2004, p.g. 475). The most interesting part about the Matrix structure was that it broke the departmental boundaries and goes against the unity of command where now one employee reports to two mangers. This type of structure is ideal for a large matured organization. When an organization grows its information processing capacity could get overloaded, under a matrix structure this can be changed as it allows the flow of communication and greater flexibility.

But what we found out was even large complex organizations are reluctant to move along with a matrix structure. First of all it is a complex structure, and secondly breaking departmental boundaries has its own repercussions such as there is greater room for conflicts, there will be constant issues about span of control and level of authority and there will always be a struggle for power among managers etc.

What was clear for us is that it’s difficult to look at an organization and say this is the best structure for you. Whatever the structure selected it must be flexible enough to change according to situations and most importantly factors such as national culture, employee behavior must be taken into account prior to deciding on a structure.

An organizations structure is the spine that allows it to stand still, the HR activities of the organization and all other activities will depend on the support it gets from the structure. Thus HR has a greater responsibility in designing the structure, the structure should be strong enough not only to stand still against the internal environment but also against the external environment as well. That is why in IHRM we look at aspects such as national cultures, work practices, ethics, norms, behaviors etc. So that HR managers can design a structure that is suitable for the external environment.

There were always something new to learn in etiquettes, because every culture has their own unique way of conducting business.

The important thing that we want to understand that no matter how qualified and well equipped a manager maybe he can mess the whole thing up by just doing something that is not excepted in that culture. That is how important etiquettes are. By doing things according to the host’s culture you show that you respect them and their culture.

Handling these etiquettes should be one of the factors discussed in the expatriate training programs. As it will help the future expats to handle business smoothly, since then they know what they should do and what they shouldn’t.

The interesting part is that you can damage a relationship by doing something, or by not doing as well.

1. Globalisation

Global competition is the new norm, with employers and employees seeing themselves as global players in product and HR markets. The Australian Financial Review competes every day online with the UK’s Financial Times, all because consumers are flexing their purchasing muscle. Similarly, Apple and Google are recruiting Aussie talent with the promise of an engaging career in California.

2. Demographic changes

Demographic shifts are constantly changing workforce patterns. The most prominent aspect is the ageing population, which raises two concerns: the potential loss of organisational memory and intellectual property when ageing workers retire; and the subsequent demand for post-retirement incomes/pensions, and public health and welfare services. The other demographic pattern of concern is the emergence of a new younger ‘lost generation’ – those neither in education nor employment, and for whom prospects appear quite dismal.

3. Technological changes on the employment market

The structure of the workforce is changing too. The power of IT is causing a permanent loss of jobs in the middle tier and at first-job entry level. Also experiencing hardship are those with narrow industry-specific skills that are becoming outmoded, such as automotive workers, and the future re-education burden will be heavy.

4. Technological changes on how work is undertaken

Technological innovations provide both threats and opportunities. Fewer people need to work in a central office location, and are instead able to do their jobs remotely. On the other hand, these trends are increasing workplace diversity through the growth of a multigenerational, flexibly skilled, cross-cultural workforce, which is requiring more sophisticated people management practices.

5. Education

While education responses are common solutions to demographic challenges, the traditional educational sector is becoming a workplace challenge in itself. Business practitioners are finding the divide between acquired formal professional qualifications and workplace learning needs is getting wider. Plus, the quality of tertiary and technical qualifications varies enormously across institutional providers.

6. Smart work

Smart work in the services sector is now dominating employment growth patterns. The momentum of this is being met by relative reductions for labour required in the agriculture and manufacturing sectors, and the social and political resistance to this is finally crumbling.

7. Income distribution

Not all our global changes are simple net positives. Many connote serious tensions. Society’s standards for greater equity are intensifying demands for better income distribution and benefit sharing between wages and profits, and to even out regional growth disparities within Australia and internationally.

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