Risk Managment
Essay Preview: Risk Managment
Report this essay
Task & Risk Management Plan
Business
Janna Bronechter
University Affiliation
Task & Risk Management Plan
Introduction
The Human Resource Management role is changing brought about by the demands of globalization. Cross-cultural issues are now included in human resource management strategies. A few decades ago, the role of human resource management has not been associated with company performance. Companies during those periods did not put much importance of human resources as a key driving force in defining the influencing the progressive direction of the company. Today, human resources represent the strength of a company. Traditional human resource models are abandoned favoring contemporary issues. While there are many variants of the new models, typical elements include employee participation, broadly-based training, and variable compensation plans. (Leckie & Betcherman, 1994)
The globalization trend in business operations of most firms today necessitates the need to deploy personnel for overseas assignment. There are several reasons why many companies would opt to expand their operations abroad: 1) Increase in global competition among multinational companies; 2) Technological advancement; 3) Markets are broadening in scope; 4) Organizations are becoming decentralized; 4) Shorter product life cycles; 5) Relatively cheaper operational costs (labor and physical facilities); and 6) Potential tax equalization. Thus, with these developments, the Human Resource Management must be aware of the impact of sending personnel offshore. According to Tung (1981), there are four categories of overseas job assignments: chief executive officers, who oversee entire operations; structure reproducers or functional head, who establish departments in foreign affiliates; trouble shooters; and elements, who are lower-level members of the organization. Most of the individuals selected are between ages 30 to 45 and are mostly male. The Human Resource Management must be proactive when preventing expatriate job attrition.
Specific Tasks and Milestones
The specific tasks include:
Implementing new recruitment strategies for overseas deployment;
Provide cross-cultural and pre-departure training for successful candidates;
Provide a repatriation plan;
Provide support upon arrival at host country or international post.
The Milestones of the project includes:
Performance review for deployed personnel after a year to determine whether the specific tasks implemented to support and reduce job attrition and the incidence of returning employees before contract is completed was successful or not;
Successful repatriation rates;
Attrition rates Ð- determining the number of personnel returning prematurely measured against number of personnel successfully completing their tour of duty.
Costs attributed to the plan;
Project Risks
Sending expatriates on foreign assignments has always been a high stakes venture. The expatriate benefit packages costs between three and 3.9 times the expatriates salary. The failure rate of overseas assignment is quite high. In the United States, about 20%-40% of US expatriates fail in their assignments. Failure in this case is defined as “not achieving the goals their companies expected.” (Burgess, 2000) A single failure can cost a company dearly. It may lose between $250,000 US to about a million dollars. Aside from the fiscal expenditure, collateral effects also include loss of business opportunities, damaged corporate reputation, loss of goodwill, and reduction in productivity level.
Majority of the unsuccessful placements are not the result of the incompetence of the personnel. It is the inability of the personnel to adapt to the lifestyle and customs of another country. Corollary to that are problems on the personal aspect like family and human relations. This could result to either the expatriate not performing well in his assignment because of unwanted distractions or compulsive behavior such as substance abuse, overworking, eating disorders and other psychologically related imbalances.
Human Resource Management is also confronted with a heterogeneous group of people working for the company. This happened because more and more opportunities are available and more and more people are realizing their potentials. Demographic diversity can occur along several dimensions Ð- age, tenure in the organization, gender, education and training and so forth. (Pfeffer, 1997, p. 83) Pfeffer further argued that, “organizations that had more discontinuous tenure distributions were more likely to experience intercohort conflict and subsequently greater turnover.” (Pfeffer, 1997, p.83) It is sometimes difficult for people who do not belong to the same age bracket or gender to integrate immediately into the team. The more the members of organization are demographically diverse, the more difficult it is to achieve homogeneity within the group. The demographic differences also hindered “interpersonal communication and, consequently, social integration and interaction.” (Pfeffer, 1997, p.84) A further study of processes that undergird the effects of composition and demography demonstrated that “the greater the work-unit diversity, the lower the levels of psychological attachment, operationalized as commitment, attendance at work and turnover intentions (Tsui, Egan and OReilley, 1992)” (Pfeffer, 1997, p.85). This has serious implications for expatriates assigned in foreign posts.
Finally, the Human Resource Management aspect is faced with the challenges presented by cultural diversity. Multicultural diversity exists in todays workplace. National boundaries are blurred because of globalization. Complications brought about by differences in cultural identity may make it difficult for business people to communicate among themselves. National culture can be viewed as “the norms, values, and beliefs shared by individuals from a particular nation that distinguish it from other nations.” (Appreciating cultural diversity, n.d.)