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1. Abstract
Globalization has shifted the focus of multinational companies to expand their businesses in
foreign countries. It has been evident that globalization has narrowed the distances through
technology, ease of import export and convenient policies of states. However, the cultural
diversity, management issues, performance management and expatriates management are related
organizations. This research study is based on qualitative approach that examines the global
human resource management with case study of Nokia Company that operates in several
countries.
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Table of Contents
1. Abstract ................................................................................................................................................. 2
2. Introduction .......................................................................................................................................... 4
3. Literature Review .................................................................................................................................. 5
4. Focus Area of Study .............................................................................................................................. 6
4.1. Innovation ..................................................................................................................................... 6
4.2. Talent Retention Strategy ............................................................................................................. 8
4.3. Case Study- Nokia Company ......................................................................................................... 9
5. Results/Findings .................................................................................................................................... 9
6. Recommendations .............................................................................................................................. 11
6.1. Change management in human resources ................................................................................. 11
6.2. Organizational culture................................................................................................................. 11
6.3. Performance management of employees .................................................................................. 11
6.4. Retention of employees .............................................................................................................. 12
7. Conclusions ......................................................................................................................................... 12
References .................................................................................................................................................. 14
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2. Introduction
Developing international standards for policies and strategies is often a complex management
task because of many factors including cultural diversity, ethical values, societal standards and
difference in localities. Personal preferences of individuals also depend upon their thinking
which is developed through societal and ethical values which is different in each country.
system and working criteria is different which creates a challenging situation and companies
need to align their policies according to those laws. Thus these circumstances formulate
human resource management specifically in changing situation. The challenges include the
hiring, management and retention of global workforce, issues of expatriates, policies and cultural
adaptation of different employees, training and development, cultural diversity, benefits and
compensations and compliance with the international employment laws to adhere the innovative
This research attempts to examine the strategy of Nokia Company in managing and handling its
wide business with reference to global human resource management as the Company referred its
human resources to be the success factor for them. The human resource practices of performance
management and talent retention on international grounds are discussed in the paper which is
further linked with Nokia’s policy of creating the innovative culture by minimizing the global
HRM issues among its employees and its failure of talent retention in changing environment.
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3. Literature Review
The concept of international human resource management has been introduced in past couple of
decades that aims to tackle the differences across national contexts of countries where the
organizations operate (Dickmann, Brewster, & Sparrow, 2008). Despite the differences in
culture, economies, societal values, ethics, laws and standardized policies, the central factor for
succession of organizations and their progress is dependent upon the humans therefore, their
survival (Palthe, 2008). Many researchers have provided thorough studies to identify the
potential advantages of expatriate and inpatriate managers, according to Harvey, Speier, &
Novicevic, inpatriates are the managers hired in parent company from other social contexts
which are valuable assets if company utilizes these employees of multi-social knowledge to
operate in global market (Harvey, Speier, & Novicevic, 2000). Inpatriation can also create
Several issues are created in international human resource management because it is more
complex and risky than traditional HRM. Hiring the expatriates in organizations require to
prioritize the study of social adjustment and cultural preferences of recruits to proactively handle
future challenges of cultural diversity, ethnic origin, language or values that might differ from
Cultural differences and performance management issues possibly arise in global enterprises,
however once the issues are handled in efficient manner, the creativity and innovation of
employees emerge. This notion is supported by Phillips who considers the innovation as directly
linked with the diversified humans of several social contexts that can share their experiences and
provide valuable input in innovation of organizational products and services (Phillips, 2014).
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This innovation and creative abilities of employees can be polished with managerial implications
through international human resource strategies which focus on standard policies, selection of
management (Hill & Requejo, 2011). Moreover, Schuler, Jackson, & Tarique explains that
skillful employees of companies are sent abroad for tackling the management issues, reporting,
setup of new offices and developing rules and regulation aligned with parent company (Schuler,
Jackson, & Tarique, 2011). It is notable that Pudelko & Harzing have exclaimed the significance
developing bond of employees from different societal context to obtain maximum innovation
In changing work environment, the retention of talent in a company is also a challenge because
talented workforce is limited and requires enough compensation to avoid working for
competitors (Daniels, Radebaugh, & Sullivan, 2011). Therefore, adaptive to changing work
environment is an essential quality in which the workforce should be given both intrinsic and
extrinsic motivation with sense of accomplishment to retain the talent and stop the employees to
This paper focuses on the two main areas of Nokia Company’s success and failure; innovation
4.1. Innovation
It has been identified that innovation does not depend on copying the methodology of other
companies neither does it depend upon the technological basis. Rather scholars have signified the
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importance of human capital of an organization and term them responsible for building the
innovative culture. The innovative strategies of an organization should be aligned with suppliers,
activities and compensating the talent for innovation, rewarding the risk taking employees and
promoting the innovative skills through training in accordance with changing environment are
essential to enhance the innovation among employees. The fundamental cause of formulating the
innovation is however the organizational culture that is created in global human resource
management with respect to parent company’s developed policies which the subsidiaries are
individuals from different social and educational backgrounds that can contribute in creativity
and innovation which is the demand of changing work context (Wang & Zang, 2005). As the
figure indicates, corporate culture with strategic direction can generate ideas and these ideas with
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4.2. Talent Retention Strategy
With globalization, many changes have occurred in global work environment as continuous
adaptability to change is pre requisite for multinational organizations. The factors which drive
the change in global context include demand for change, economy of countries, technology, and
innovation, strong competition among companies, gaining competitive advantage, career growth
and opportunities and compensation and incentives for employees. A company fails to retain its
talented workforce when they are failed to provide both intrinsic and extrinsic rewards for
motivation. Employee engagement in innovative processes and decision making can result in
high retention of employees however, effective strategies in change management is complex task
where global markets and decision making is critical and risky factor (Bhatnagar, 2007). Human
resource strategies should be aligned with the strategic objectives of the parent company to
efficiently manage the global subsidiaries of organization (Christensen Hughes & Rog, 2008).
Commitment of CEO
Performance assessment
Compensation
Career development
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4.3. Case Study- Nokia Company
The global management of human resources and bring out innovative culture and outstanding
talent management is a necessity. Moreover, in times of drastic changes in global economies and
customer preferences, there is a need to manage the internal change in organization to retain the
talent with effective policies and opting between centralized or decentralized approach for
strategic decision making for the parent company and its subsidiaries.
Nokia Company had profound history of being market leader and managing its human resources
in effective manner. However, in last decade, the company failed to manage its global human
resources due to lack of change management skills and taking effective decisions on time
(Surowiecki, 2013). The lack of innovation in Nokia’s products is directly linked with ineffective
human resource management that was raised because of ineffective policy and direction less
strategy.
It has been identified that Nokia human resource data management was based on SAP software
for which effective training was not provided to the employees. Moreover, the decision of
centralized and decentralized policy adoption for global subsidiaries of company was taken quiet
late that further required training and change in human resource policy for next two years
(Goodwin, 2011). In this evolution of international HRM of company, the focus was diverted
from innovation and performance management that lose the market share of company.
5. Results/Findings
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International human resource management is significantly different from traditional
human resource management, it comprises of more risks and complexity of decisions due
In Nokia’s case, the innovation capability of employees was reduced due to inefficient
Data compilation of human resources in Nokia’s Company was also not up to the mark
and foreign managers were not given appropriate training for compiling data or use SAP
software.
When Nokia confronted with challenges of reduced market share and incapability of
employees were elevated because they found more chances of career opportunities and
growth in other mobile companies. Hence, the employee retention strategy was not
important factor to make them loyal through trainings, commitment and career
opportunities so that the employees may show their skills in redesign of organizations.
Job security is also an essential aspect in global human resource management and
expatriates and inpatriates management require keen consideration of policies that ensure
foreign states should be cleared for all divisions, employees and their managers.
because otherwise the company cannot survive in global context (Aspara, Lamberg,
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Laukia, & Tikkanen, 2011). The demand of customers, current trends, economies,
technological changes are evident that require subsequent training of employees, their
Finally, the organizational culture plays a critical role in managing the global businesses.
Therefore, despite of cultural diversity, the employees must be aligned with similar
policies that are developed by parent company in order to reduce cultural impact and
conflict of interests.
6. Recommendations
After studying the impact of global human resources on Nokia Company’s performance, the
The company wide change cannot be executed without its implementation in human resources of
all subsidiaries of multinational organization. Responding t the current trends with innovative
organizational culture and combined decision making are rules to succeed in global context.
organizational culture on foreign units of company so that the impact of cultural diversification
For proper innovative culture integration, the performances of employees can be enhanced
through motivation and training programs. Organizations operating in different countries can
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have decentralized approach of rewarding their extra ordinary employees on their performance
and they can be sent to foreign units for training or recognition programs. Moreover, the training
of employees to be adaptive and responsive to contemporary trends of global market and align
The retention of employees in global context can be made possible through communication,
coaching, career opportunities and growth, positive tangible rewards and feedback exchange and
to recognize the employees on international level are the sources of intrinsic and extrinsic
7. Conclusions
The innovation in a company can be executed merely with the proper management of human
resources and addressing their requirements. Highly talented individuals also require incentives,
career growth opportunities and job security which were not ensured by Nokia Company.
Moreover, the change management process was relatively slower in the company and they failed
to embrace the change of mobile phones revolution that decreased their revenues. When
company becomes financially unstable or begins to lose market shares, there is a complex
situation and they have to take critical decisions. Human resource were decided to downsize for
cost-cutting, however it created job security issues in employees. Moreover, for retaining the
capable employees, other employees were given up that consequently resulted in low level of
trust for management. Under so much pressure, expecting an innovative approach from
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unwillingness for adapting the change ultimately resulted in losing potential employees, reduced
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References
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