HUMAN RESOURCE MANAGEMENT IN THE GLOBAL CONTEXT – REAL ESTATE AGENCY EXPANSION INTO SPAIN

Posted: December 21st, 2022

HUMAN RESOURCE MANAGEMENT IN THE GLOBAL CONTEXT – REAL ESTATE AGENCY EXPANSION INTO SPAIN

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Table of Contents

1. Introduction……………………………………………………………….………………3
2. Cultural Comparison and Analysis………………………………………………………..4
3. Cultural Similarities and Differences between the UK and Spain…………………………4
4. Significance of the Differences for the Choice of HRM Policies and Practices……….……6
5. Institutional Comparison and Analysis……………………………………………………6
6. Institutional Similarities and Differences between the UK and Spain……………………6
7. Significance of the Differences for the Choice of HRM Policies and Practices……….……9
8. International HRM……………………….…………………………………………………9
9. Importance of UK’s attitudes to internationalization with Respect Employing People in Spain…………………………………………………………………………………..9
10. Advantages and Disadvantages of Employing PCNs, HCNs, or TCNs…………………11
11. Gaps between the Aspirations of Corporate Social Responsibility………………………12
12. Recommendations………………………………………………………………………..13
13. Conclusion……………………………………………………………………………….14
14. Reference List……………..…………………………………………………………15

Human Resource Management in the Global Context – Real Estate Agency Expansion into Spain

1. Introduction

Businesses nowadays increasingly focus on expanding globally but it is necessary to consider certain factors while venturing into global markets. Hitt et al. (2015) inform that in today’s global economy, firms of all sizes are initiating operations in foreign markets. This form of expansion can offer various merits, encompassing enhanced opportunities for diversification and market growth. Hitt et al. (2015) argue that global diversification of business assets can safeguard the organisation’s bottom line against unpredicted circumstances. For instance, a firm with international operations can offset poor performance in one market by operating effectively in another. Businesses can also use international markets to introduce unique services and products, which can help sustain a progressive revenue stream. However, a critical factor to consider while expanding globally is the HR implications of expanding into a second country. It is even more important to pay considerable attention to this area if a business has little experience of hiring, retaining, and managing people across international borders. The study expounds on the significance of paying attention to the concepts of international HRM and comparative HRM when expanding globally. International HRM in this case refers to the global management of people in the multinational firm. It entails deploying HRM policies, practices, and theories in multinational and transnational organisations. Comparative HRM, on the other hand, focuses on comparing and contrasting the similarities and variations between two or more nations, and explores the sameness and variations in HR practices, policies, and theories between different nations. The study focuses on the HR implications of expanding from the UK to Spain, particularly along the coastal areas. Construct Me, a UK based real estate agency, is set to gain valuable information from the report that will foster future organizational success, particularly in terms of embracing HRM practices that are not likely to affect how the firm relates with employees at the newly established enterprise. The firm learns the need to create a HRM policy that appreciates cultural differences and one that fits into the institutional characteristics of the target market.

1. Cultural Comparison and Analysis
2. Cultural Similarities and Differences between the UK and Spain

A suitable framework for understanding the cultural similarities and differences between the UK and Spain are the Hofstede’s cultural dimensions. Culture in this instance refers to the language, beliefs, religion, literature, music, and art associated with a particular society, group, or country (Pathiranage 2019, p. 2). Culture also refers to a set of norms, values, and beliefs shared by a particular group of people, as well as how people make sense of the environment or world around them (Shahzad et al. 2012, p. 976). Based on the analysis by Hofstede Insights (2021) it is possible to compare the cultures of the UK and Spain depending on six dimensions of culture – power distance, uncertainty avoidance, individualism-collectivism, masculinity-femininity, long term-short term orientation, and indulgence-restraint. In terms of power distance, which reflects the measure to which hierarchy and imbalanced distribution of power are acknowledged, Spain scores higher (57) compared to UK’s 35 (Hofstede Insights 2021). Spain’s high PD score signifies an evident acceptance of evident status variations between subordinates and superiors. Managers in Spain, therefore, tend to be paternalistic and autocratic while workers tend to follow what they are told. The two cultures also differ in terms of uncertainty avoidance that signifies the measures of comfort with ambiguous scenarios and the level to which efforts have been put into place to reduce or avoid these incidences (Hofstede Insights 2021). Spain scores higher in UA (86) compared to UK’s 35, which implies that people in this society rely on facts, absolute truth, and codes of behavior. On the other hand, people in the UK may be open for changing ideas, are dynamic, and the society imposes fewer restrictions and the environment is more flexible.

Further examination of the UK and Spain cultures using Hofstede’s cultural dimensions give valuable information about the practices and beliefs in the two nations. Comparing the two in terms of masculinity (MAS) helps to know the measure to which assertive and tough behaviors are encouraged. On the contrary, femininity (FEM) promotes nurturing and tender practices and behaviors. The UK scores 66 in masculinity and Spain 42, thus suggesting that the British pay considerable attention to elements of assertiveness, material rewards, and heroism (Hofstede Insights 2021). It also mean that women in the UK are competitive and assertive but not as much as men. Spain, on the other hand, seems to encourage more femininity elements sharing and caring are dominant. Another aspect that helps to understand the difference between the two cultures is time orientation, which reflects the level to which short-term pain is acknowledged in return for long-gain gains (Hofstede Insights 2021). The UK and Spain tend to score almost the same in long-term orientation, which implies that people are likely to embrace new and pragmatic ideas to solving problems. The fifth element is time orientation, which reflects the level to which personal autonomy is appreciated and valued over collective or group practice and indulgence (Hofstede Insights 2021). The UK scores higher in this area (89) against Spain’s 51, thereby implying that more British prefer privacy, autonomy, and personal goals as opposed to the Spanish who prefer group goals and objectives. The final comparative element is indulgence where the UK scores higher (69) than Spain (44) (Hofstede Insights 2021). Hence, it means that the British society gives more freedom to its people as opposed to Spain. The Spanish, on the contrary, tend to be more restrictive on how people indulge in practices that could be viewed as enjoying life.

1. Significance of the Differences for the Choice of HRM Policies and Practices

The variations in cultural practices and beliefs in the UK and Spain play fundamental roles in determining the creation of HRM policies and guidelines. The variations help to create HRM policies that foster employer-employee relationship taking into account that how seniors relate to the subordinate staff may differ from one culture to the other. For example, Construct Me while venturing into the coastal of Spain, may have to create HRM policies that define the hierarchy of power and dictate how senior and junior employees relate taking into account that the Spanish pay more attention to hierarchical structures as opposed to the Britons. The cultural variations are equally essential in developing other aspects of HRM policies and practices that would allow the agency to establish its position in the newly established Spanish market. The parent firm in this instance will know whether to formulate HRM policies that encourage individualism or collectivism as well as whether to create guidelines that advocate for free exercise of employee desires or to formulate stricter measures that confine employees to their organizational duties.

1.  Institutional Comparison and Analysis
2. Institutional Similarities and Differences between the UK and Spain

Conducting an institutional comparison and analysis of the UK and Spain provides further insight into how the two regions differ and how their features could impact on business performance. The histories of work and management in the UK and Spain differ significantly. Substantial changes happened in the British workforce between 1880-1950 with changes in time introducing new concepts aimed at improving the well-being of workers, including increased working conditions, transformation of management law, and enhancement in occupational health. The mid 1900s ushered an era for increased diversity and enhanced engagement in employee groups. In Spain, increased desire to join the workforce gained momentum during the 19^th and 20^th centuries when more labour laws came into force. Labour policies and management guidelines in both countries have continued to change over the years.

The legal frameworks for employment in the UK and Spain also depict some differences that could impact on firms operating in these regions. The Employment law in the UK governs the employer-employee relationship, and regulates what employers can expect from workers (ICGL 2021). It also defines what employers can direct workers to do, and defines employees’ right at the workplace. The employment law in the UK also impacts significantly on the creation of policies that determine the national minimum wage (House of Commons 2017). On the other hand, the Spanish legal system acknowledges three categories of professional categories; dependent self-employed, self-employed people, and employees (Prado 2021, p. 1). The law is similar to the UK framework because it calls for proper relationship between employers and employees. Furthermore, the Spanish framework offers guidelines for hiring workers, accountability, and termination (Vivero 2021). The guidelines in the UK and Spain are instrumental in determining how firms develop their HRM policies.

Both the UK and Spain strive to develop policies that would foster economic growth and development. In the case of Spain, the political tensions in the country is affecting economic growth and formation of policies aimed at improving the economy (OECD 2011). Spain’s economic development according to Sustainable Governance Indicators (2021) has escalated by 1.2 points from 2014. Nonetheless, Spain’s economic policy emphasizes on equipment investments, private consumption, and exportation (Sustainable Governance Indicators 2021). A report by Sustainable Governance Indicators (2021 a) reveals that with the Brexit-instigated factors derailing economic stability, the UK falls into the upper-middle position in terms of economic policy. UK’s international comparison of productivity shows that the UK pars with France and surpasses that of Japan and Germany (Holmes 2006). UK’s economic policy emphasizes on However, it is yet to achieve the rank of the U.S. as it appears in the chart below;

Holmes (2006)

More fundamentally, the UK and Spain have some structural variations in trade union structures and policies, which requires the UK-based firm to consider this while expanding into the Spanish market. Turner (1964, p. 165) informs that the UK trade union movement adopted its guidelines and structures to modern forms with the key objective of reforming socio-economic conditions for employees in Britain. The Labour Party pushes for the creation of policies that favor employees’ rights and desires. However, William and Bryson (2007, p. 93) raise the awareness that union membership is steadily declining in the UK. Similar trade unions exist in Spain with the UGT and CCOO being some of the most vocal unions aiming at safeguarding employees’ interests. Trade unions in Spain like in the UK have the power to call for strikes and to mobilize the formation of particular policies and practices (Loira & Fenger 2019). Nevertheless, the structure of trade unions in Spain follows the American model, thus differing from the Anglo-Saxon and northern and central European forms with regard to frequency of strikes, mobilization, and union density (Kohler & Jimenez 2013). Despite these variations, trade unions in both countries champion for what they think is the best for employees in different sectors.

1. Significance of the Differences for the Choice of HRM Policies and Practices

The differences in institutional factors impact significantly on the development of HRM policies and practices in both jurisdictions. Hence, Construct Me should consider these variations while planning to venture into Spain. Knowing that the employment law in Spain calls for stable employer-employee relationship offers guidance to the real estate agency on how to structure its HRM policy such that organizational leaders do not violate their worker’s rights. Similarly, team leaders understand the significance of developing HRM policies that allow for engagement in trade unions taking into account that workers in the UK and Spain consider such groups to be influential in the way they work.

1. International HRM
2. Importance of UK’s attitudes to internationalization with Respect Employing People in Spain

Businesses that seek to venture into a global market should pay considerable attention to the idea of internationalization because this could significantly influence how a firm performs. Internationalization defines the process of designing products and services to meet the requirements of users in the target global market or various nations or creating them so their modification can be easy often with the intention of achieving business goals (Roque et al., 2019). However, how a firm approaches the idea of internationalization may differ from one organization to the other. For example, internationalizationmay imply creating a website so that when its language is changed from English to Spanish, the aesthetics framework still works well. This may be difficult to attain because many Spanish words have additional words than words in English. In other context, internationalization could refer to an organization that takes measures to enhance its footprint or dominate larger market share outside of its parent country by venturing into international markets (Roque et al., 2019). A critical factor that determines an organizational performance is how it approaches the internationalization process, especially with regard to the attitude a firm has towards the initiative. It is advisable to have a positive attitude each time a firm seeks to engage in internationalization; otherwise, it may be difficult to achieve the targeted aspirations (Anderson 1993, p. 215). Internationalization is a process that requires effective planning and timing and failing to establish a positive attitude while focusing on the area could hamper performance and put into waste what the company has put much effort to achieve. Hence, operating firms in the UK, including Construct Me, should have the appropriate attitude in internationalization, particularly with regard to employing people in Spain.

Having positive attitude will lead the UK firm to believe that employees in Spain are equally competent to perform the job as much as it is necessary to embrace the concept of diversity. Holding to a positive attitude will encourage the British employer to consider hiring Spanish who have relevant skills and knowledge the firm needs to serve its clients better. Besides, sticking to a positive attitude while engaging in the internationalization process will encourage the firm to consider hiring Spanish employees who exhibit diversity in their appearance. For example, it may be necessary to hire people of Spanish origin but have different skills and possibly belong to different religions. Considering such factors during the hiring process will enable the firm to work with qualified workers who give a comprehensive overview of the Spanish workforce.

1. Advantages and Disadvantages of Employing PCNs, HCNs, or TCNs

Construct Me should assess carefully the potential benefits and demerits of hiring parent country nationals (PCNs), host country nationals (HCNs) or third country nationals (TCNs) in the organization. A major benefit for hiring PCNs is that such employees have adequate knowledge of the organizational products and culture, thus minimizing the need for additional training (Harzing 2001, p. 3). Another merit for hiring PCNs is that it is possible to achieve loyalty and it is also easier to nurture workers to take over leadership positions (Harzing 2001, p. 3). However, hiring PCNs only could create an impression that the firm is not hiring people from other nations, and not in support of diversity. Furthermore, paying attention to PCNs deters the firm the opportunity to recruit highly talented workers from other areas or fields (Harzing 2001, p. 3). On the other hand, paying attention to HCNs is beneficial because the firm is likely to get the support of local inhabitants who develop the feeling that the establishment seeks to elevate their economic well-being. Another reason why hiring HCNs is beneficial is that employees in the host nation are more conversant with what local consumers want, thereby making it easier for the organization to attract more buyers and generate more revenue (Harzing 2001, p. 4). Nonetheless, entirely hiring HCNs denies the company an opportunity to diversify its workforce at a time when a corporation can achieve competitive advantage by exemplifying diverseness in its operations. TCNs, on the other hand, are helpful in promoting organizational success because they come with diverse skills and competence (Harzing 2001, p. 4). They also enrich the group by demonstrating a diverse workforce that is committed to achieve common goals and objectives. Despite the merits associated with TCNs, they may experience considerable challenges getting together and acclimatizing to the needs and culture of local consumers (Harzing 2001, p. 4). Construct Me must clarify its reasons for settling for either of the group of employees in its HRM policy to conduct its operations flawlessly.

1. Gaps between the Aspirations of Corporate Social Responsibility

Firms engage in corporate social responsibility initiatives with various objectives. Venturing into the practice allows the firm to achieve increased brand recognition, enhanced sales, consumer loyalty, better financial outcome, and organizational growth. Some of the practices that organisations perform as part of their CSR programs as it appears in the chart below, include offering suitable customer service, engaging in honest practices, offering quality products, and environmental concerns among others;

Ipsos (2012)

However, some firms encounter significant challenges that could deter their desires to excel in this area. Whereas many firms in the UK strive to achieve impressive outcomes when engaging in CSR, several concerns affect actual practice, including lack of accountability, avoidance of key business stakeholders, and the public’s failure to acknowledge the firm through CSR (Grigoris 2016, p. 46). Such concerns require urgent attention, especially when a firm is contemplating expanding its operations to foreign markets because CSR play fundamental functions in determining organizational outcomes and its relations with key stakeholders.

• Recommendations

The leadership of Construct Me can achieve impressive outcomes in the implementation of an HRM policy that fosters good performance in the target market by taking certain factors into consideration. One possible way to increase the likelihood for deploying a successful HRM plan is to conduct adequate research on how the Spanish and British cultures vary and how the variations could determine the formation of HRM policies and practices. Thus, it is vital to pay considerable attention to Hofstede’s cultural dimensions that give a comprehensive guideline for assessing the variations between cultures. Besides conducting researches to understand the variations between the Spanish and British culture, Construct Me will have little hardships implementing its HRM policy and practices in the target market if the management embraces diversity that is increasingly becoming influential in the way firms perform. Hiring employees from a particular region or who share similar features may depict the firm as being less diverse in its operations, which could derail how it appeals to employees and buyers from diverse backgrounds (Inegbedion et al. 2020). The third factor that could help the firm to establish a robust HRM policy while venturing into Spain is to offer training on the benefits of diversity and to emphasize on why the group hires from diverse backgrounds. The training should offer valuable tips on how to deal with emerging constraints as well as equip employees with the capacity to forecast future changes and make necessary preparations (Inegbedion et al. 2020; Kochan et al. 2003, p. 4). Another critical factor that would enable the real estate firm to function effectively in Spain in terms of implementing its HRM policy is to review the policy as regularly as possible. The review process presents an opportunity to identify areas that require improvement and to work towards enacting change. Finally, it is important to engage employees in the decision-making process because this presents an opportunity to develop an HRM framework that is inclusive and not subject to criticism.

• Conclusion

The study focuses on the need to develop effective HRM policies when venturing into an international market. It shows the need to understand how cultures differ and what appears to be normal or widely applicable in a particular region may not apply in another place. Knowing how cultures differ presents an opportunity to develop HRM policies that are not prone to controversy. Moreover, the analysis reiterates the significance of creating HRM policies and practices that are in line with the institutional features in the target market. The study provides recommendations that could help the real estate firm to venture in the target market, including acknowledging that cultures differ and impact on people’s beliefs and practices, embracing diversity, offering training on diversity, and reviewing HRM policies. Otherwise, failing to take these factors into account could derail how Construct Me performs in Spain.

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