Academic journal article Management International Review

Strategic International Human Resource Management: An Asia-Pacific Perspective

Academic journal article Management International Review

Strategic International Human Resource Management: An Asia-Pacific Perspective

Article excerpt

Regional Dynamics and the International Business Context

Located in the south-west of the Asia-Pacific region, Australia has burgeoning intra-regional trade and societal links. Australia also has strong historical, cultural, and trade links with European Union member states. Thus, Australia is in a unique position in that it has a European culture but is located geographically in the rapidly developing Asia-Pacific region. These two regions present complex challenges for multinational enterprises (MNEs), with implications for strategic international human resource management (SIHRM). The present study analyses the emergent challenges for SIHRM in Australian MNEs operating in the European Union.

There has been rapid and remarkable formation of regional trading Arrangements over recent decades. Regional trade groups include: the European Union (EU), originally established as the EEC in 1957; the North American Free Trade Agreement (NAFTA), formed in 1994; the Asia-Pacific Economic Co-operation (APEC), formed in 1989; and the Association of South-East Asian Nations (ASEAN), formed in 1967(1). In January 1992, ASEAN leaders agreed to develop initiatives towards an ASEAN Free Trade Area (AFTA), which is to be formed within fifteen years (Garnaut/Drysdale/Kunkel 1994). The incidence of inter-regional connections (between two or more regional groupings) is also increasing. For example, relations between the EU and Asian nations show significant development, with the first summit meeting of the EU and East Asia, known as the Asia-Europe Meeting (ASEM), held in Bangkok, Thailand in March 1996 (Turner 1996).

The EU, with significant political integration and international coordination, provides a complex example of regional trade. Developments in the social dimension of the EU present significant challenges for MNEs (Blanpain/Engels 1993; Brewster/Hegewisch 1994; European Foundation for the Improvement of Living and Working Conditions 1996; Wedderburn 1996). The growth of the European Union as a significant player in world markets has particular importance for Australian MNEs, as the EU is Australia's largest economic partner in terms of total transactions in goods, services, and investment (DFT 1994a, 1994b). Australia also has important trading relationships with APEC and ASEAN countries.

APEC is the primary vehicle for promotion of open trade and economic Cooperation in the Asia-Pacific region (Garnaut 1994). APEC members are home to 38% of the world's population, have a combined GNP of US $14 trillion, and represent 56% of the world's economic production, and 46% of total merchandise trade. In contrast to EU member nations, APEC members are largely island or peninsular nations, with great diversity of economic development and industrialisation, social, religious, political, and cultural contexts (Garnaut et al. 1994; Trood/McNamara 1996). Significant moves have been made towards regional cooperation in APEC. At the November 1994 APEC meeting in Indonesia, the Bogor Declaration was developed. This declaration constitutes an agreement by APEC's members to achieve regional liberalisation of trade and investment by the year 2020 for developing nations, and 2010 for industrialised nations (DFT 1994 a). This declaration is, however, more political than practical, as it contains little detail or guidelines for the achievement of the cited goals (Jiro 1995; Motoi 1995; Yumiko 1995). Dowling (1994) has observed that there are significant opportunities for co-operation between APEC countries to develop policies with regard to human resource development. In particular, large enterprises from industrialized economies could participate in an exchange program by accepting managers and HR practitioners from small and medium sized enterprises in newly industrialising countries for short-term assignments to maximise transfer of the experience and skills of larger enterprises. Such regional co-operation would conceivably influence human resource development policies in MNEs in Australia and across the Asia-Pacific region. …

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