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Topic: International human resource management


Human resource practices in the international business environment have continued to change dramatically in recent times. These changes are related in a big way to the ongoing process of globalization. Organizations are increasingly changing their human resource practices to increase flexibility. In this case, flexibility occurs in different ways, including production and management of resources. The need for flexibility arises from the emergence of new competitive conditions within the contemporary global information economy.

Carnoy (1997) uses the term “disaggregation” to refer to a new trend where focus is no longer on stable, permanent jobs. These jobs are increasingly being replaced by flexible, individualized employment managed through human capital portfolios. Employees who work in flexible employment are not restricted to working in one organization. They feel free to move from one organization to the other in search of temporary or contract work.

            One of the organizations that have embraced this concept of flexibility is IBM, a multinational computer company based in the U.S. IBM started adapting to changing international human resource practices by encouraging employees to drop the formal approach to employment by working on projects from remote locations. This enabled the company to overcome the problem of cultural differences since employees no longer had to go through the face-to-face familiarization process before settling down to commence project work (Edwards & Ferner, 2002). The aim of this paper is to critically evaluate the HR practices of IBM. This paper assesses the extent to which an  appropriate level of “fit” exists between the overall international human resource strategy followed by IBM and the broad international or global context in which it operates.

Recent developments in international human resource management

In recent times, many changes have occurred in international human management. Advanced economies are going through major changes as part of the process of globalization. At the same time, technological advancements have impacted dramatically on labor markets across the world. Many companies prefer to outsource their back-office operations. Permanent work is longer the dominant practice in human resource management. As part of this HR revolution, an increasingly large proportion of the global workforce operates in self-employment, part-time work, contractual work, and in virtual environments.

            In the United States, employment continues to become increasingly “insecure” in the sense that the employer can lay off workers without incurring major costs (Wright, 1998). The standard employment relationship of the industrial age was characterized by full-time employment. In this relationship, efforts were made to characterize jobs into different categories, including transportation, communications, mass production enterprises, wholesale trade, and service industries such as banking and insurance (Inkson, 1997). However, with the advent of the information age, this categorization has become blurred. Organizations are looking for flexibility in employment relations in order to be strategically positioned to take advantage of rapid changes in the global business environment.

            According to Wright (2002), the field of human resource management (HRM) has undergone an evolution in both strategic and functional aspects. To understand this evolution process, Wright (2002) suggests that an integrative view of international human resource management should be adopted. This view is supported by Sparrow (1994), who introduces the notions of convergence and divergence in reference to the use of human resource policies and practices as a way of creating competitive advantage at the international level.

            Changes in international HRM practices continue to occur at a time when the world has become increasingly competitive and volatile (Purcell, 1998). In this environment, firms are compelled to look for numerous ways of gaining competitive advantage. Traditionally, the main aspects that were targeted in efforts to establish competitive advantage included technology, capital, and location (Huselid, 1997). Today, more innovative sources of competitive advantage are being sought. One of these sources is human resources. The way the HR department is managed has changed a lot in recent decades. Focus has shifted from the traditional approach that consigned HR practices and policies exclusively to the personal department. Today, the management of HR practices and policies tends to be shared among managers, personnel directors, non-managers, and line managers. The point at which the highest authority is conferred varies depending on the type of competitive advantage that an organization seeks to establish.

            Organizations that operate globally are confronted with the choice between the adoption of a uniform HRM strategy for all operations and the use of strategies that vary from one region or country to the other. According to Sparrow (1994), a trend towards convergence continues to shape up in terms of how organizations use HRM to gain competitive advantage. However, the process of pursuing this convergence some divergences emerges since different companies choose different themes, nuances, and areas of HRM. They also utilize different aspects of work structuring, cultural reorientation, and performance management to gain competitive advantage.

            In project-oriented companies such as IBM, HRM is a core process that influences the process of acquiring and using human resources. It also affects the experiences of employees as far as the employment relationship is concerned. In its traditional conception, IBM may not be referred to as a project-oriented organization. Rather, it is viewed as a large, stable organization. However, in today’s dynamic international business environment, IBM seems to be evolving towards the adoption of the characteristics of a project-oriented company. This is partly because of the adoption of flexible employment practices that allow different employees to work on different projects, at different locations, and at different times (Huemann, 2007). According to Huemann (2007), organizations whose work is modeled around projects as the main component of work design seem to have been marginalized in discussions about the practice of HRM especially in the international context.

            The debate on the advantages and disadvantages of temporary labor is in the past triggered disagreements among scholars (Jiménez-Jiménez, 2005). According to Geary (1992), temporary labor is disadvantageous. Geary’s view is based on a study of U.S electronics firms with operations in the Republic of Ireland. Contrary to the views made in recent discussions on the strategic benefits of a flexible firm, Geary’s (1992) indicates that reliance on a temporary workforce yields contradictions and tensions, making it disadvantageous. Geary (1992) also observes that literature on employment flexibility has tended to neglect responses to these initiatives by employees.

            Kalleberg (2000) also raises concerns regarding the fast-growing of temporary employment as a work option. However, unlike Geary (1992), Kalleberg (2000) acknowledges that temporary employment also has its advantages. Employing organizations that adopt this approach enjoy greater flexibility and lower costs. At the same time, temporary assignments are a major source of individual growth and variety among employees. However, Kalleberg (2000) warns that benefits for organizations can prove elusive if the temporary employees are less committed or less skilled in their work. At the same time, employee’s benefits may come at a great cost if temporary workers turn into a wandering underclass within the labor pool (Kalleberg, 2000). The only time when temporary employment can work well is if t is properly managed by both the employer and the employee.

Overview of IBM’s international human resource strategy

IBM has responded fairly well to dramatic economic and technological change in today’s world. One of the areas the company has focused on is the international human resource strategy, where the aim is to reorient its HR strategies and practices by abandoning the traditional analogue approaches and embracing the “highly unconventional” practices of the twenty first century.

            The process of changing the HR profile at IBM may be said to have started during the mid-1990s (Greenhalgh, 1986). At this time, the company started encouraging its global employees to start working remotely. Today, these efforts have yielded many benefits because forty percent of the company’s 400,000 employees are working from remote locations (Boudreau, 2010). The main reason for changing the HR strategy is that it no longer fitted the company’s workforce. One of the reasons for this lack “fit” is that during the twenty first century, the company has thrived by taking over ownership of many successful companies in different parts of the world. Such companies prefer to sell off divisions that are no longer thriving. This has created a scenario where about half of IBM’s workforce has been working with the company for only five years or less (Boudreau, 2010). Moreover, sixty five percent of these employees live outside the U.S (Boudreau, 2010). This is a dramatic change from the HR phenomenon of two decades ago, whereby most of the company’s employees worked and resided in the United States.

            Even as all these changes have been occurring, IBM has never reneged on its goal of maintaining high worker morale, loyalty, and productivity. In the environment characterized by these drastic changes and an increase in the challenges faced, IBM has been compelled to place new emphasis on the “resources” aspect of the HR strategy. One of the ways in which the company has been doing this is by emphasizing on equitable benefits for every employee regardless of his country of origin, gender, race, sexual preference, or ethnicity. In fact, the company has won recognition by human rights groups and women’s labor organizations for embracing diversity in issues of sexuality and gender.

            IBM also promotes its HR goals by seeking feedback annually from forty percent of its employees working from different parts of the world. The feedback sought relates to both workplace issues and the community conditions in which they work. To promote peaceful coexistence with local people the company has been emphasizing on and rewarding volunteer work. The company has also introduced a bonus program aimed at encouraging employees and executives to increase their performance levels. Another dimension adopted at IBM involves employee training. This dimension is indicative of the far-reaching implications of the process of reorienting the company’s HR strategy. In recent, the company has invested heavily in employee training. This training focuses on new skill areas including interpersonal and interactive skills.

            To succeed in this HR reorientation process, the company has focused a lot on experimenting with new methods. Some of the areas the company has ventured into include endeavor-based work, mass collaboration, and crowd-sourcing. In endeavor-based work, the company relocates employees whose services are required for a short duration. While in their new locations, they are expected to work on a specific project by contributing their skills.

This unconventional approach to talent development at IBM also stands out as a demonstration of the company’s level of commitment to success in the changing international human resource environment. Training specialists routinely provide directions to employees through the virtual environment that has been made possible by recent technological advancements. Moreover, colleagues sometimes choose to communicate via live-chat through smartphones, tablet computers, and laptop computers instead of battling traffic on their way to the office.

At IBM, many conventional business meetings are held in virtual environments. This environment provides an effective icebreaker for partners who are compelled to overcome differences in culture, political systems, work ethics, and languages before they start working on a project together. In formal business meetings, it is normally very difficult for an improvisational quality to be achieved during interactions. One of the ways through which IBM overcomes this problem is by holding virtual business meetings. Participants are given an opportunity to fill existing innovation-related gaps by connecting, mingling, and co-creating (Boudreau, 2010).

These efforts have immensely contributed to the emergence of IBM as one of the multinational corporations established during the industrial age to continue thriving in the information age. The company has done this by redefining its HR strategy in order to succeed in shifting from business machines to data flows, global connection, and interactive human networks. The company has appreciated the reality of today’s interactive global network, which requires international companies to change their HR practices, policies and strategies at all levels of the organization.

IBM’s ability to rise to the challenge of transformation in today’s international human resource environment has been widely publicized. A lot of focus has been on the extent to which the company has succeeded in transforming itself from a multinational business organization of the industrial age to a globally integrated enterprise of the digital age. To do this, the company had to integrate value delivery and production worldwide positioning business functions strategically based on proper positioning of skills and costs.

In the digital age, a need arose within the organization for other business needs to be supported. In response, the company’s human resources department realigned its own processes and functions. In this realignment process, the company differentiated between core HR roles such as internal business consulting and designing policy on the one hand and non-core tasks such as administrative work on the other. This approach was adopted upon the realization that the company was spending too much time on administrative and processing aspects (Mills, 2008). Too much emphasis was being placed on operation of technology and foundational things that were adding very little business value.

            In 2003, IBM’s HR leaders established a new division, the IBM Global Process Services (GPS), whose role was to provide back-office services to the company. Since the establishment of this division, the company’s HR professionals have been able to focus on employee development as well as the company’s strategic needs. HR services have also been streamlined, costs have been reduced, and efficiencies have been increased. It seems that in the long run, flexibility and service quality will be increased. Looking into the future, IBM GPS is set to continue building a stable foundation to emerge as a market leader in transforming business outsourcing.

            The back-office outsourcing services provided by IBM GPS are of great value not only to IBM but also other companies with global operations as well. The input of these clients greatly contributes to innovations and improvements that are of great business value to human resource management at IBM. Many companies continue to express interest to benchmark with IBM with the aim of comparing HR strategies and tactics. In turn, HR professionals at HR benefit by seeking guidance from other business organizations. This symbiotic relationship has continued to help transform IBM as well as other companies in the goal of enhancing the delivery of products and services around the world.

            One of the main negative aspects of IBM’s approach to flexible employment is that it neglects the employee perspective in the analysis of its benefits and long-term sustainability. Without a proper assessment of contradictions and tensions, the company may face serious consequences in the future in the form of unskilled labor and lack of commitment to the goals of the organization. Fortunately, the company has adopted an aggressive employee training campaign aimed at improving skills to enable employee perform the tasks assigned to them in a more effective manner.


In conclusion, this paper has demonstrated that an appropriate level of “fit” between IBM’s overall international human resource strategy and the broad international context in which it operates. The world has moved on from the industrial age to the information age, and so has HRM practices. In international HRM practice, flexibly employment engagements have replaced the traditional conception of permanent employment that is based on fixed categories of work. IBM, like other multinational companies operating in this context, endeavors to utilize the latest technologies to transform its HR strategies and policies. As a result, a large proportion of the company’s workforce operates from remote locations. Although this HR strategy has many benefits for the organization, not many efforts have been made to investigate its impacts on employee development and wellbeing. For temporary employment to work well, it must be properly managed by both employers and employees. At IBM, HR professionals have attempted to address this challenge by adopting transformative approach to employee training to go hand in hand with the shift towards employment flexibility.


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