International Human Resource Management

College of technology, London

Submitted by- Ramandeep kaur

Mba term-2
Pathway- Human Resource Management
CTL ID- 093192-85
UWL ID- 29002142
Lecturer- Teddy Foster

Describe, and critically evaluate the internal and external factors that
determine employment relations in companies that are multinational,
working globally, but originating from UK.

INTRODUCTION:Employment relationship is a legal notion that is now used worldwide to refer the
relationship between a person called an employee and an employer. With
the increase in the globalisation of business and other economic activities the
importance of human resource management is also increasing. The increasing
number of employees are experiencing more international job mobilisation in the
global environment. Multinational companies have the capacity of implementing
expertise in different countries where it is operating; one of the elements is the
transfer of employment across countries. If we see from the individuals point of
view, a globalised business can experience a number of positive responses,
which can include acquisition of skills, development of the personal and even
long term career advancement. However it has been experienced that all good
and positive outcomes comes with some difficulties as well. Many problems have
been reported with the expatriation which adds to the family and social tension
with the assignments. International assignments can prove to very frustrating
because of lack of respect, loss of status, different culture, language etc.
International relocations of employees are linked with these positive and
negative aspects. Before taking up an international and foreign assignment an
individual asks questions to themselves, which includes:
1)
2)
3)
4)

How much satisfaction he will get from the assignment?

How will he feel when he will return back?
Is it worth to accept the offer, or rather rejecting it?
Who will be more satisfied me or my co-workers who work in the home
country?
5) How am I going to come up with the family, and the different culture? etc
These are just the few examples of questions, the range of questions or issues go
far from that. And that includes all the four stages from pre-assignment to postassignment. Now another thing comes here that how important is the
management process? Is change required in the on-going process, what are the
policies, procedures, and the issues arising out of it? As there are lot of
complexities of factors of the organisations working across the global and
apparently they have to agree on the HR policies and procedures and practices.
Moreover we will discuss the internal and external environment of British Airways
and its effect on the employment relations and critically evaluating and
discussing the factors with the academic references of various authors in the
particular topic. Recently it has been seen that British Airways faced a lot of
difficulties with their employees due to some factors and the effect was seen
globally. We have to look into the issues through different aspects for better
understanding of the problems.

Overview of British airways and its employment relations through

different perspective
Recently the development has been seen in the International Human Resource
Management and it was also reviewed in the top 20 journals from year 1996 to
2000 Werner (2002), the focus was on the expatriation including a wide number
of issues which also includes acceptance of the assignment (Aryee et al, 1996),
concerns and expectations of the doubled sided career of expatriates (Harvey,
1997), withdrawing from assignments psychologically (Shaffer and Harrison,
1998) thoughts like pre-departing (Garonzik et al, 2000) and moreover
commitments (Gregersen and Black, 1996).
Employment Relations- the main focus of this essay assignment- is a
significant part of the all these issues as all these factors directly or indirectly
effect the employment relations in an organisation. Employment Relations is
defined as the two way process between employers and employee and their
mutual understandings and adjustments of interests, goals and ideas. It covers
all the aspect of the employee or staff from acquire, develop, maintain motivate
and later when he leaves the business. Employment relationship is more than
just exchanging labour for pay cheques. It is an economic relationship on one
side but it is also a psychological and social relationship on the other (Baron and
Kreps, 1999). And when all these factors go globalised and international than
management have to manage their HR policies and procedures in a way that can
match these factors.

leader
leader

pier
pier

employ
ee
relation
s
subordinat
subordinat
e

pier
pier

This figure shows the relationship between pier to pier, leader to pier and leader
to subordinate as well, moreover apart from relations at home an employee has
to maintain relations with the family as well. There is a thin line between the
employee relations at work and his relations at home which is known as the
porous boundary. Now we know that environment is ever-changing and so as the
demands, we cannot control the environment but rather we can cope up with it
and improve our own management strategies. Things were simple before when
the exchange of employment was not on the international scale. The events and
situations prevail in and outside the organisations that can affect it in both the
positive and negative ways are known as the driving forces. Now these driving
forces can be Internal or External. Internal forces are generally under the control
of the organisation unlikely external forces which are not under control. The
potential external influences on the policies and practices of HRM are:-

1) Change in the national and international economy: - The impact of

change in the economy on business is high in globalised environment. If
the HR strategies are unsuitable in the continuing competitive
environment and organisations still stick to their old and depressed
earnings than the results can be very contrasting. And if we talk about the
British Airways here the same policy was adopted by the airlines which
resulted in the strike of cabin crew and lot of challenges have been faced
by the airlines due to it. The staff announced strike in may as well June for
five days as they wanted airlines to negotiate on the salary structure
despite of the fact they knew that in the time of recession every
organisation faced problems.

2) Change in the technological structure: - Technological changes at

different staffing levels can also effect the employment relations as
adoption of new technologies by the organisation can affect the HRM
policies and practices. Improved knowledge, skills, attitudes is required in
the workforce (Fisher and Shaw, 1992; Lansbury, 1992; Schuler, 1990;
Stace, 1987). For example if a new technology is adopted by an
organisation where it can take over the work of five people, can create the
threat of job insecurity among the employees. Adoption of technology of
putting automated check in machines at Heathrow airport have taken the
job of two to three person, which can lead to job insecurity at different
levels as well and can adversely affect the employment relations.
3) Change in the National culture and traditions: - Globalised economy
and the rise in the number of multinational corporations leading to a
considerable interest in the international HRM. A significant national
cultural differences have been found by the investigators in attitudes and
in the use of various HRM policies and practices (Hofsted , 1989; Laurent,
1989; Sparrow et al., 1994). If an employee from England is sent to
countries like middle-east that to a lady, it will be really very difficult for
her to survive there because of the language, lifestyle, food and countrys
rules and regulations and moreover if we talk about the holiday structure
of middle east and eastern countries there is a big differences. In context
to British Airways employees from England get holidays on Christmas and
New Year as these are the two main holidays as compared to Middle East
where Id is regarded as their main festival and not getting holidays in
these days will result in the imbalanced employment relations.
4) Change in the legislation, law, regulation etc: - frequent change in
the rules and regulation of the government directly affects on the area of
HRM policy and practice. Dyer and holder (1988) noted a strong impact of
legislation on HRM in the USA, Stablein and Geare (1993) indicated the
same problem in New Zealand. The new proposal of the government of
levying environmental tax on the flights to combat climate change is
opposed by the airlines; British Airways called them an extremely blunt
instruments to tackle carbon emissions. Whereas one of the competitor
Virgin Airlines said that it can damage the UK economy. Moreover the
proposal also included the VAT or fuel duty on Domestic flights and a
green air miles scheme (BBC News).
5) Policies of competitors: - When we talk about the competitors we
always want to adopt the HRM policies and practices adopted by them and
this kind of behaviour is referred by Dyer and Holder as pervasive
bandwagon effect. As if the strategies are easy to adopt than it wont
prove to be a competitive advantage as it will be easy to imitate. British
Airways are facing direct as well as indirect competition from the airlines
like virgin, Qatar, emirates etc. as they have the cost structures which are
lower than British airways and moreover they are even supported by the
government intervention. Services provided by British airways at higher
ticket price being a competitive price but still one can get same services
from the other less fare flights.

6) Policies of unions:- If HRM policies and practices are analysed without

taking into account the importance of trade unions can create havoc in the
working environment as all the benefits to employee like pay, working
condition, health and safety and other issues are handled by unions, so
they play a very important role. Now in its annual report British Airways
says that they are making continuous effort to reduce employment costs,
through increased productivity and competitive wage rate which turned
out to be in contrast statement as the staff was on strike because of the
salary issues.
Potential internal influences on the policies and practices of HRM
1) Size and Structure of the organisation: - The size and structure of the
organisation also affect the employee relations, bigger the organisation
more complex is the relation. It has been found from several investigations
that organisational size is related to the HRM policies and practices
(Delery, 1994; Fisher and Shaw, 1992; Jackson et al., 1989; Terpstra and
Rozell, 1993) and same goes with the organisation structure Limerick
(1992). British airways as in size carry a large workforce and are UKS
largest international scheduled airline, flying to over 300 destinations.
2) History, traditions and practices in the past: Factors such as history,
traditions and past practices which are closely related likely to create
opposition change in most of the companies. British Airways traditionally a
government owned company transformed into privatisation as it faced
many losses in the year 1981 (estimated 140 million) resulting in cutting
their cost by reducing down there staff by 14000 in that year. After
privatisation it focused more on securing employees which resulted into
more deep rooted cultural change.
3) Top management:- It has been seen by some of the writers that
development and application of HRM policies and Practices is influenced
by top management. But some writers like Buller (1998) have gone ahead
and have seen that values and skills adopted by the top management for
the HRM acts as a crucial variable that effects the adoption of HRM
policies and it is the most powerful drive that oppose the adoption of
strategic approach to HRM (Dyer and Holder,1988). Now the BA internal
mismanagement of selling its carrier to GO for 100 million was snapped
by a competitor Easy jet and is doing loud business on the short haul
routes. Management at BA are still top heavy (SKYTRAX, 2002), even staff
cuts that happened unlikely persuade that it will go far to make required
changes at BA.
4) Recruitment Approach: - According to Francesco and Gold, 1998 can
put three different approaches to recruitment- A) Ethnocentric- where
the central focus will be on the home country practice, head quarters
takes the decisions for all. Home country employees divide the jobs and
subsidiaries follow the resource management act. B) Polycentric- acc. To
this approach subsidiaries works on local basis, where the management of
local company is taken care by the local managers as managers from
home country dont have enough knowledge to deal with the local market.
C) Geocentric- organisation managers are appointed on global basis.

5) Training and development: - this activity is regarded as a vital activity

by BA and it supports various approaches and programs such as- a)
highest standards for customer care is implemented by the corporate
customer training b) there is a big support of the MBAs and other
diplomas which are internationally recognised c) staff is updated on
industry news and issues on BA through company-wide communication
program d) multi-media open learning centres and business libraries are
also available.
Conclusion:
British airways a FTSE listed company, with a share capital of
288 million is one of the favourite flyers among customers. They
provide best services to customers after they launched the
strategy of people come first. But with so much of developments
it has seen some changes that happened to be small or radical
and that affected BA in one way or another. To diagnose the
change at British airways lets see thisJob cutting at British airways is like a tradition, there is a kind of job
insecurity at BA. If we talk about early 80s they cut down there staff by
14000 in one year alone because of the hike in fuel prices. After 1983 they
realised for more secure future they should focus on the retention of their
employees as through cultural change. But the story of cutting
employees is not ended there whether it was recession in early 1990s or
twin tower tragedy, which affected the business of BA majorly n result
they had to reduce their staff by 7000. It has been seen that BA faced so
many radical as well transformational changes. Now there is a need for BA
to do the force field analysis where it should tackle the recent problem
which is again with the employees globally. Strike made by the staff
because of the less wages resulted in the loss of BA globally. The flights
were cancelled from the major port i.e. Heathrow and many people
suffered from that and BA reported a loss of 164 million. They should
face the problem and try to solve it through a correct managing diversity
program and reward system.
This assignment purely highlights the different ups and downs of an
employee within an organisation and outside the organisation as well. It is
really important for an organisation to take care for an expatriates life
cycle and the employee needs and then satisfying them. Changes in the
organisation can affect the employee and employer relation in different
ways; it can be good and can be bad as well. If an expat takes up a wrong
assignment that probably it can happen to be a positive way of learning
for him if an organisation help them to with a safer environment for giving
back their mistakes and also sharing the learning with others. And talking
to colleagues about the mistakes can be helpful for transformational
learning. In case of BA there is a gap of communication between the
employee and a employer so if the flow of communication goes better
than one can see a better and shining future for BA. External and internal
environment with the organisational mission and purpose are expected to

influence the strategy of the organisation which will in turn influence the
HRM strategy rather affecting it directly.
And from my findings it has been seen that both external and internal
factors of environment impact the employee relations in one way or other,
and even few authors says that as well from their research in the
background reading.
References
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- Collins, R.R. (1988), The strategic contribution of the personnel
function, in Palmer, G. (Ed.), Australian Personnel Management: A
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