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INTERNATIONAL HUMAN RESOURCE MANAGEMENT

MSc International Business with Human Resource Management

Module: BMG935

TABLE OF CONTENTS

INTRODUCTION
...
4
OVERVIEW OF NESTLÉ
...
6
ANALYSIS OF THE STAFFING PROBLEM IN NESTLÉ
...
10
REFERENCES
...
While increasing their engagement in the
global activities, the firms have to adapt their management functions to the requirements of the
global environment
...
In
the attempt of adapting to the international environment, the human resource management is
facing various challenges and issues, the most common being linked to the recruitment and
selection of the employees, preparation and training for the job they need to perform in the
foreign country, support with the adaptation to the local environment, availability of cultural
education about the habits, traditions and customs in the foreign environment, as well as
support with learning and understanding the language spoken there, local legislation, pay and
compensation regulations, performance management, etc
...
In the first part, will proceed with a short review of the relevant literature
to the international human resource management concept
...
In the third part, the focus will be on the analysis of the staffing issues faced by
Nestlé and on how the company manages them
...


3

INTERNATIONAL

HUMAN

RESOURCE

MANAGEMENT – LITERATURE REVIEW
The international human resource management has been defined as “the study and
application of all human resource management activities as they impact the process of
managing human resources in enterprises in the global environment” (Tarique, Briscoe and
Schuler, 2015, p
...
Morgan (1986) has highlighted three dimensions of the international
human resource management, interrelated, and they make reference to the human resource
activities performed, the countries where the organisation operates and the type of individuals
that the company employs
...

The purpose of the international human resource management is to contribute
effectively to the multinational enterprise’s global success, by ensuring the achievement of
sustainable global competitive advantage, efficiency, local responsiveness, flexibility and
adaptability to the new environments in short periods of time, as well as capability of
transferring knowledge and learning across different globally dispersed subsidiaries (Schuler,
Budhwar and Florkowski, 2002)
...
In this context, the adaptation of managerial attitudes and of the
corporate culture to the specific of the foreign country where the organisation operates, to
accommodate the cultural diversity of the multinational company employees, is crucial for the
venture’s success (Fatehi and Choi, 2019)
...
al
...

The global staffing process in the multinational corporations has received a particular
attention (Collings and Scullion, 2006; Sebastian Reiche, 2007), with the expatriate recruitment
and selection being one of the most controversial issues in terms of criteria used for selection
and barriers to the international mobility (Brewster and Harris, 1999), the adaptation of
expatriates to the local environments to fight their liability for foreignness and to overcome the
failure (Pudelko, Reiche and Carr, 2015), or the limitations to the effective management of
international human resources staffing by exclusively relying on the expatriation-based staffing
(Harvey, Speier and Novecevic, 2010)
...
This study aims to identify Nestlé’s human resource management to the staffing
(recruitment and selection, expatriate assignments) challenges and to develop effective
solutions meant to improve the staffing procedures and policies and to increase the
organisational efficiency in the foreign countries
...

The company has developed an innovative infant food in 1867 and few years later, in 1905, the
firm has merged with Anglo-Swiss, forming the Nestlé Group
...

The company has rapidly expanded, having a presence in 187 countries and employing
291,000 individuals, committed to “unlocking the power of food to enhance quality of life for
everyone, today and for the generations to come” (Nestlé East and Southern Africa Region
5

Profile, 2021)
...
Nestlé has more than 2,000 brands in its
portfolio, from baby foods to bottled water, breakfast cereals, chocolate and confectionery,
coffee, dairy products, drinks and foods, ice cream, pet care and healthcare nutrition
...
al
...

Nestlé is a people-inspired company, focused on both employees and customers, highly
preoccupied about the wellbeing of the consumers and of the workers
...
The Nestlé’s employees are being supported through training, are offered
flexibility and stimulated to become more productive, which helps the firm to face successfully
the competition challenges
...
The human resource policies and practices of Nestlé
are focused on the promotion of the opportunities and on the optimisation of the workforce
(Meyer and Xin, 2018)
...
For this reason, Nestlé must ensure the
coordination of the operations in the different foreign countries
...

Despite of being a successful company and this is mainly due to the contribution of the
employees, the human resource management is facing challenges related to the recruitment and
selection process in the foreign countries, due to the difficulty in sourcing the people with the
right skills set and the right cultural fit (LinkedIn Corporation, 2021), as well as because of the
issues related to the international assignments of the expatriates, given that the willingness of
the individuals to emigrate has significantly dropped (Strack, et
...
, 2018)
...


6

ANALYSIS OF THE STAFFING PROBLEM IN NESTLÉ
As a multinational company, Nestlé can follow one of the approaches to the
international staffing (Perlmutter, 1969): ethnocentric (with the decisions made by managers
from headquarters and subsidiaries managed by staff from the home country), polycentric (with
the subsidiaries managed by the host-country national, who are promoted in positions at the
headquarters and with the parent-company national rarely transferred to foreign subsidiary
operations), geocentric (having a global approach to the operations and with a particular focus
on the individual’s abilities rather than nationality) and regiocentric (with managers responsible
for particular geographic regions and having autonomy in the regional decision-making
process)
...
This strategy
encourages the effective cooperation and resource distribution across the subsidiaries
...
For example, a manager from
the headquarters is sent on an assignment in Singapore; during its assignment, the manager is
able to share the organisational values of the company with the local employees, helping them
to better understand the company’s mission and objectives and inspiring them towards
improving their performance in their job
...
Other issues are related to the high
costs involved in the training and relocation process, as well as to the long waiting times to
obtain the approvals and permits needed for the foreign nationals
...

The recruitment and selection process are a major challenge for Nestlé, especially in
the countries with a shortage of skilled employees or in the countries with low unemployment
rates, as the company is looking to source only candidates with relevant skills, experience and
7

adherence to the Nestlé principles (Nestlé, 2012)
...
An additional risk is associated with the tendency of the
international managers to focus on the standard hiring practices, ignoring the specificities of
the foreign countries (Edwards and Rees, 2017)
...
), internal promotion or use of external recruitment
agencies (Li, 2015)
...
The current
employees of the company are usually promoted in higher positions, in accordance with their
skills and firm’s necessities (Sasson, 2016)
...
However, the processes ae different in different countries
...
Apart from being a time-consuming and costly process, it does not offer a guaranty that
the persons selected possess the most suitable skills for the job; likewise, the number of
qualified applicants may be insufficient to evaluate, even if the company has advanced
selection systems in place
...

Nestlé is rated as being among the best companies to work for (Dabirian, Kietzmann and Diba,
2017)
...

Another major challenge for Nestlé, linked to the staffing issue is represented by the
selection of the expatriates sent on the international assignments
...
Even
though the number of the expatriates is relatively low as compared to the total number of the
employees, the preference of the internal workers for this type of assignments is observed, as
it is reducing the risks of poor selection decisions made by the human resource management
...
The expatriate needs to be
offered pre-departure training, helping with the understanding of the cultural differences
between the parent-country and host-country and with the understanding of the tasks it needs
to perform in the foreign market
...
For example, if an employee from the Swiss headquarters of the
company is sent on an international assignment in India, for a duration of more than a year and
the expatriate has a family in Switzerland, the physical distance between the countries, along
with the cultural and linguistic differences, the quality of life, uncertainty of the tasks it needs
to perform, that the individual cannot adapt to, may lead to its failure
...
There are also
situations in which the individual settles in the foreign country where it has been on an
assignment and decides to localise (Joinson, 2002)
...
The localisation of
the employee may result in lower costs for the company, due to the compensations packages
that may be paid lower than the expatriate traditional packages (Hailey, 1993)
...
In these situations, the employees do not
need to relocate to a host country, but they need to manage different international
responsibilities for the organisational subsidiary in a different country
...
This strategy saves Nestlé costs related to relocation of the employee and its
family, training in the new country, adaptation to the foreign environment
...


CONCLUSION AND RECOMMENDATIONS
This paper has investigated thew main challenges faced by the international human
resource management in the expansion process of the multinational corporations to the foreign
countries
...
It was found that the main problems of the organisation
include the difficulty of attracting skilled talent in the countries with low unemployment levels,
the struggle of finding skilled workforce in the countries lacking skilled individuals, the
generalisation of the recruitment and selection practices rather than their adaptation to the
specificity of the foreign market, as well as the challenges in selecting the expatriates for the
international assignments and dealing with virtual assignments
...
The organisation could also focus on increasing the brand reputation
by using the social media channels and offer competitive packages of benefits to attract the
highly skilled individuals in the markets with low unemployment rates
...
The pre-departure training should also be offered to the expatriates engaged in
virtual assignments, along with IT support and accommodation/flexibility of the working
hours, as needed to perform according to the expectations
...
However, an effective strategic management could help the organisations
to overcome these issues and gain or maintain their competitive advantage in the foreign
markets
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