Rajesh Software Limited is a fast growing software company in India.

It defines,
designs and delivers technology-enabled business solutions to its clients. It has a
global presence through strategic alliance with leading technology providers located
in different parts of the world. In fact, it conducts its global operations through its 22
overseas offices located in countries like the USA, UK, Australia, China, Poland, South
Africa, the Philippines and Argentina. The company has 15,000 employees, of which
3200 are expatriates on an international assignment at any point of time. It has an
international HR division as part of the well-developed HR department to prepare,
expatriate and repatriate the employees linked to foreign assignments. The HR
department of this company is managed by Mr. Pranav Kumar, director (HR). The
International Human Resource (IHR) division, headed by AGM (IHR) Mr. Srinivas Patel,
is responsible for identifying, training, orienting and compensating the expatriate
employees. It is also responsible for evaluating the performance of the expatriate on
overseas missions. Since Rajesh Software gets a sizeable portion of its income from
overseas operations, it has spent a considerable amount of time and resources to
develop a global HR system. Yet, the international division of this company faces a
few specific problems like high employee attrition among expatriates and a high cost
of maintaining them on international assignments. An employee satisfaction survey
conducted among the expatriates revealed employee dissatisfaction over
performance evaluation and pay differences. Some of the expatriates complained
that the IHR division was ignoring the dissimilarity in the expatriate assignments and
foreign situation while evaluating the performance of the expatriate employees in the
same positions posted to different countries. As such the international performance
management tools have failed to recognize the country-or-region-specific difficulties
in job performance. Another major problem associated with the expatriate
assignment is the high cost of maintaining expatriates on overseas jobs. Rajesh
Software estimated that the cost of using local employees. The management also felt
that the expatriates often overemphasized short-term results rather than the
necessary long-term results since they were aware that they would be working in the
foreign assignment only for a few years. The management sought the view of the HR
department about the expatriate problems and instructed it to develop strategies to
surmount them. The HR department forwarded the letter to the IHR division for its
views and responses. Mr. Patel, in his reply, defended both the performance
evaluation system for expatriates and the practice of deputing parent-country
employees. Regarding performance evaluation, he maintained that a cross-section of
the employees, including expatriates, was consulted while designing the international
performance standards and evaluation techniques. Thus, the international
performance management system was objective and comprehensive. As regards, the
high cost associated with the expatriate employees, he wanted the present system to
continue in the future despite managerial vacancies. According to him, the expatriate
system enabled the company to have a better and direct control over the foreign
branches. When his response was placed before the management, there was a sense
of disappointment among the top managers. This was because the response from
IHR division was devoid of any concrete solution. Understandably, the management
was seriously pondering its next move.

Questions:

1) What is your understanding of the seriousness of the problem faced by Rajesh

Software Limited in its overseas operations?

2) What is your opinion about the response of the IHR division to the queries raised
by the management?

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Introduction
Local Human Resource Management practices are different of international Human
Resource Practices, because the core different in the organizational structure. The
structure of a Multinational organization as Coca Cola should be different of another
American local organization. These differences come from the significant role and
senior strategies of the company. This should cause some significant change in the
HR practices and functions.

Since Coca Cola is a company operates its business around a huge number of
countries around the world it began to respond to both of local and international
needs. Environment, culture and political differences exist from a region to another.

Globalization is the most important factor of the multinational enterprises

phenomenon. Coca Cola one of the American companies became a multinational
company to take the benefits of new markets and to minimize the labour costs. Haile
(2002) mentioned that Bernadin and Russell (1998) and Robbins (1997) all stated that
Coca-Cola and Pepsi receive more than half of their revenues from operations
outside the United States. These reasons and more encourage the company to
operate its business outside the boundaries. While the company started its
operations outside USA it considered the environmental, cultural and political
change. Also it considered the differences among the multinational employees.
Therefore it started to find the methods and the practices which help to avoid any
obstacles since the IHRM has new concepts were developed internationally. As a core
point, the international human resource practices should be aligned with the
predefined strategic business goals.

Company’s background
Coca Cola was invested in May 1886 by Dr. John S. Pemberton in Atlanta, Georgia.
Currently, its operations are in more than 200 countries, and with diverse work force
of approximately 55,000 employees.
The local and global strategy
The strategic vision of the company is to achieve five strategic goals: Profit, people,
value, partners and planet.

One of the above strategic is people, which is the most important element in Coca
Cola as people are the workforce which operates the whole work. Moreover the
company gives its attention to the HRM to control the human functions and roles
and to be aligning with the company’s senior strategy. In line with the higher
objectives of the company, human resources management seriously seeking to get
the best management achieve the objectives of the company. For these reasons,
IHRM should define know the structure of the company as a global.

(The Times Newspaper, 2005, P. 2)

The company’s structure

The home country of Coca Cola is USA it controls both of centralization and
localization’s functions. Senior decisions at The Coca Cola Company are made by an
Executive Committee of 12 company Officers. This committee helped to shape the
strategic priorities. The chair of the executive committee acts as a head for the
company and chairs the board meetings. He is also the Chief Executive Officer (CEO)
and as such he is the senior decision maker. Other executives are responsible either
for the major regions (e.g. Africa) or have an important business specialization for
example the Chief Financial Officer.

(The Times Newspaper, 2005, P. 3)

There are seven main regions where Coca Cola operates in as the following:

North America, Africa, Asia, Europe, Eurasia, Middle East, Latin America. Each region
has divided into countries and each country has its own structure the following figure
explains the structure of Coca Cola in Great Britain.

(The Times Newspaper, 2005, P. 3)

IHRM concepts in Coca Cola’s practices and reasons to

transfer employees to the host countries
Staff selection, international assignments, international training and development,
international compensation, and IHRM in the host Country context are some key
concepts of the international practices which Coca Cola’s HRM is responsible to deal
with. And it is important to know the reason of transferring people from a region to
another among Coca Cola parent company, host countries and subsidiaries.
The reason of sending staff for international assignment in Coca Cola is to achieve
three major goals within short and long terms: to fill positions, develop the
management and to fulfil Coca Cola’s development. (Hartono 2009)

The following table shows the reasons of transferring staff from the parent country of
Coca Cola to the host countries (e.g. china).

Why does Coca Cola transfer staff from the parent

country (USA) to the host countries
Transfer of technical or Managerial knowledge, training of subsidiary managers, or
lack of qualified local personal

(Position Filling)
Level of education in host country is low

Subsidiary is young

Subsidiary is Greenfield establishment

Gain international experience

develop global awareness

(Management Development)
MNC is more internationalized

MNC is large

Control and coordination of subsidiary operations

(Organizational Development)
Uncertainly avoidance in home country is high

Level of cultural distance between home country and host country is high

Level of political risk in host country is high

Subsidiary is large

Subsidiary is majority-owned
Subsidiary is higher in corporate reporting chain Subsidiary is young

Subsidiary is under-performing

improvement of communication channels between head quarter and subsidiary

(Organizational Development)
Level of cultural distance between home and host country is high

Level of political risk in host country is high

Subsidiary is young

Selecting staff for global assignments in Coca Cola

Hartono (2009) argued that studies explained that selecting employees for global
tasks to achieve international specific jobs is difficult. Also wrong selection may lead
to significant problems. Therefore Coca Cola developed its own system for careful
selecting employees, in this system the company determines carefully the
appropriate persons for each assignment. (Slavenski 2003)

In Coca Cola they always give enough time to assess employees they wish to go for
an international assignment. First step is to receive applications from the employees
who find that he is qualified for the task. Then conduct five hours assessment for all
the applicants to identify the following nine skills:

1. Organizing and planning

2. Perception and analysis

3. Decision making

4. Oral communication

5. Decisiveness

6. Adaptability

7. Interpersonal skills

8. Written communication

9. Perseverance
Second step is to determine the best applicants who have succeed in the first
assessment and ask them to return next day for the organizational orientation, also
there is three days of training for the line managers who are responsible for this
selection. In Coca Cola usually the third step is an interview to select one of three
applicants to do the international assignment.

Comparing with the old approach of selecting staff to do a global task there are a
significant change in the way and technique used currently in Coca Cola. According
to Slavenski (2003) he stated that These results indicate that the new method of
interviewing is more effective than traditional interviewing. Hence, the
assessment/hiring ratio was lowered from 3: 1 to 2:1. T hat is, for every two people
assessed in the center, one could be selected. The cost savings amounted to about
$48,000 per center or $4,000 per candidate.

The disadvantages of traditional selection in Coca Cola

Selecting people who have equivalent skills, information, and organizational
expectations is more complex than it earliest appears. Someone who has been
successful somewhere else in a related position may not always be a good selection.
Old selection in most organizations is not as useful as it could be because it is not
based on an analysis of job necessities, rather than being prepared and logical, it is
unofficial and incompatible, making it hard to compare and assess candidates, it may
involve unrelated, and sometimes unlawful, it allows the candidates small chance to
express actual job skills and it is based on poor inspection and records and generally
relies on the interviewer’s ability to bring to mind complex information about
number of candidates.