Chapter one: Introduction
Background
Human resource management is highly essential for each organization, especially the multinational corporations, with a significant role in facilitating the multinational employee teams in adapting to the changes experienced in the international business environment. Also, comprehensive HRM strategies are essential in exploiting the new global opportunities and ensure that the multinational company is performance aligns with the expected international business standards. Chopra (2017) emphasizes the importance of the company’s acquisition of the right personnel, and this explains why Human Resource Management adds to a company’s competitive advantage. However, Human Resource management personnel faces numerous challenges since they play a crucial role in driving business success through the acquisition and management of the employees. Strategic human resource management strategy is a concept that emerged in the 1990s, and it continues to draw the attention of most organizations. Thus, SHRM is concerned with human resource management practices, manager’s involvement in managing teams, developing human resource practices and strategic organizational management among other roles.
The multinational corporations (MNCs) focus on international human resource management intending to gain a competitive edge that promotes the success of business in a foreign market. Thus, MNCs are faced with a challenging task of managing global employees. Harrison and Bazzy (2017) explain that it’s a challenge for MNCs to recruit, train and retain employees who are from different countries and different cultures. However, it is the role of IHRM to ensure that global employees are well managed across various countries and also geographical locations for business success. Based on this understanding, IHRM is defined as the process used to employ, train, develop and compensate employees in a multinational corporation (Kaufman, 2015). An MNC has businesses in various countries, and its headquarters are situated in one country. Therefore, the IHRM is concerned with activities like international staffing, cultural integration and employee selection, training employees, performance management and compensation. It is indeed true that IHRM engages HRM practices at a global level.
IHRM contributes to the success of multinational corporations. There is a higher probability that cross-cultural conflicts would arise within multinational teams of employees. These conflicts result in anger, cross-cultural misunderstandings, frustration and also low morale which affects the employees’ job performance. As a result, most MNCs managers believe that effective management of the multinational teams adds to the company’s competitive advantage within the international business environment. According to Liang et al. (2020), IHRM is concerned with six functional areas of human resource, and they include labour relations, employee benefits, compensation, recruitment and selection of employees, performance evaluation, employee training and development. These functional areas are among the key factors that have made IHRM an essential factor for business success in an international environment. Therefore, IHRM ensures that a company survives competition considering that there is a continued increase in the number of multinational corporations globally. Also, IHRM is essential since it contributes to a company’s’ competitive advantage. A company that has an effective IHRM is capable of identifying the employee’s skills, motivate employees and assign jobs based on the skills acquired by the employees, and this increases efficiency and improves the performance of MNCs.
Huawei is a telecommunication company that was established in 1997 in Shenzhen, China, by en Zhengfei. The company started by trading telephone exchange equipment that used to be imported from Hong Kong. In 1997, the company established its first research and development centre in Bangalore in India. This was the company’s first move to venture in a global market. Also, the company was listed in a 500 list of Global fortune, having attained an annual net profit worth US$2.67 billion in 2010 (Liang et al., 2020). Currently, Huawei is one of the leading telecommunication company globally. The company has operations in 170 countries and has a total employee population of 180,000 employees. According to Huang (2019), Huawei is a market leader in China, Africa, and also across Europe and Asia. An annual report released by Huawei in 2018 shows that the company had made revenue worth US$107, and in the same year the company registered a 12% growth. Huawei’s business can be grouped into four business categories. The first category is the carrier network business category that provides services like wireless network, carrier software and fixed networks among other services. The second category is the enterprise business category that is concerned with the provision of equipment and software. The last business category is the consumer business category.
Currently, the company has approximately 180,000 employees globally. This indicates that Huawei’s HRM is concerned with management multinational employee teams. Guo et al. (2019) explain that the number of employees is likely to keep increasing having recorded a 3760% employee growth rate from 50 employees to 188,000 employees between 1991 and 2018. The success of Huawei as a multinational corporation is grounded on the company’s ability to break the existing boundaries and forming an ecosystem that accommodates all the employees from different countries and cultural backgrounds. Huawei has majored on research and development as a strategy to enable the company to thrive in a competitive international market. In 2018, 45% of Huawei’s employees were engaged in research and development. However, Ba et al. (2016) note that Huawei has not yet developed a clear strategy to incorporate both local and foreign employees in all its operations. The company offers promotions to outstanding employees, and more growth and development opportunities are availed to the employees. For recruitment, the company has established an effective internship training system which is used to recruit new employees to the company. During the internship program, the interns are allowed to attend training programs. At the end of the internship program, Huawei absorbs the best performing and talented interns. Also, the company recruits its employees from different countries across the world.
Several potential issues are likely to face Huawei. First, continuous technological innovation is a challenge since history has confirmed that monopoly control within the telecommunication industry is temporal. This requires the company to attract a pool of talented employees to keep up with the current innovation pace. Also, the company has employees from different countries and cultures. This creates a high probability that cultural conflicts across multicultural teams are likely to occur. This would harm the success and general operation of Huawei. Based on this understanding, there is a need to have an effecting human resource management strategy that is capable of shielding Huawei from issues results from the employee differences and conflicts. This creates a need for international human resource management to ensure that Huawei’s multicultural teams in various teams work effectively and collaboratively.
Problem statement
The organizational structures of multinational corporations have continued to be more flexible.
Also, the development of new technologies through the advancement of innovation has led to workforce diversity and flexibility, which have led to increased pressure on human resource management strategies. The international business environment is highly unpredictable, and multinational corporations have continued to engage different international human resource strategies to improve a company’s competitive advantage (Harrison & Bazzy, 2017). As a result, MNCs concentrate more on the management of the human resource. Also, the development of effective human resource strategies is meant to improve the international human resource management. Managers pay less attention to policies, and they have shifted focus to various ways that employees can be managed to enhance organizational performance.
There is need for Huawei to master the international markets by engaging the right and effective IHRM strategies. This requires effective management of the employees to improve its performance. This would need Huawei to manage the employee’s cultural differences to limit the occurrence of employee conflicts (XY). Several studied conducted on IHRM explain that MNCs thrive the competitive international business environment by aligning the human resource strategy with the organizational practices. However, this is dependent on the prevailing business conditions since the corporate strategy is influenced by human resource practices (Huang, 2019)). Also, Guo et al. (2019) explain that MNCs that have an effective human resource management strategy is highly successful and has employees who are committed and this has a positive impact on the general organizational performance. The available studies on IHRM have focused on the use of IHRM for business success, and the studies have focused on several industries within the same or different industries. As a result, this study seeks to conduct a critical evaluation of Huawei’s international human resource management strategy.
Research aim
This study aims to investigate the international HRM strategy of Huawei Company.
Research questions
- What are the recruitment and selection strategies adopted by Huawei Company internationally?
- How is Huawei managing employees toward achieving strategic objectives?
- What is Huawei’s innovation on HRM?
- What strategies are used by Huawei to promote employee engagement?
Research objectives
- To find out the recruitment and selection strategies adopted by Huawei Company internationally.
- To explore Huawei’s management of employees toward achieving the company’s strategies objectives.
- To find out Huawei’s innovation of Human resource management.
- To find out the strategies used by Huawei to promote employee engagement.