Multinational corporations (MNCs) are ranked second (after transnational organizations) when international organizations are categorized based on their level of involvement in international activities. By their simplistic definition, they are corporations owning facilities, assets and operating in at least one foreign nation. According to Haghirian (2010, p.59), modern MNCs have hundreds of thousands of organizational members or employees.
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These members fall under three types; namely expatriates, host-country nationals, and third-country nationals. They form diverse workforces based on the notion that they are mosaic of persons who bring different backgrounds, perspectives, beliefs, genders, disabilities, races, competencies and styles as assets to the MNCs (Rasmussen, 2006, p.1). It is from the above motivational background that the succeeding paragraphs discuss what really describes each of the identified members.
Starting with expatriates, this essay establishes that MNCs’ definition of the term complies with that of most academic literature. As such, the term defines specialized and highly qualified members (or employees) whose overseas assignments last from one to five years. The key reason for calling on the services of expatriates occurs from the need to fill assignments which are demand-oriented.
An additional reason is derived from the fact that the existing members may lack requisite expertise or technical knowledge thus calling on expatriates to address this gap. Nonetheless, borrowing from Barbian (2006, p.31), this essay advices that there is need to advance pre-departure training to these categories of members to expose them to the envisioned ‘culture shock’ likely to be experienced in all foreign cultures.
Alternatively, Host-Country Nationals (HCNs) are residents or citizens of a nation that provide or “host” local facilities and property, for MNCs’ operations abroad (Vance & Paik, 2010, p.144). These employees can come from the host-countries’ national labor forces. The obvious advantage of such members is that they are readily available and affordable.
Other advantages associated with HCNs are their familiarity and adaptability to local environment, economic conditions and general and common business practices. The above have seen many MNCs select HCN top leadership to oversee their operations. However, HCNs are commonly associated with the failure to share a common language of the MNCs’ expected business priorities, practices and strategic mindsets.
Notably, Third-Country Nationals (TCNs) are citizens or residents originating from different host or parent countries (third countries). These members also provide useful alternative labor force sources for effecting demanding foreign assignments. They are especially preferred in instances where MNCs have focused their efforts on obtaining the most affordable or cost-effective labor, regardless of the employees’ countries of origin.
In most cases, the recruitment follows region-centric approaches. Here, TCN employees are assigned to nearby countries that ‘host’ MNC operations. The main disadvantages of such members originate from the facts that they may experience difficulty in understanding national languages, culture, MNCs’ strategic business operations and priorities. In addition, governments in designated host countries may obstruct their presence on the feeling that they ‘rob’ jobs from local HCNs.
In conclusion, this essay has been very useful in attaining its aim of discussing the three types of organizational members in any multinational corporations. In the first case, the author has stressed the importance of preparing members for successful interaction with foreign cultures by use of pre-departure training. In the second case of the host-country nationals, the author has pointed out that their familiarity with the local environment is likely to act as head starts in the operations of the MNCs.
The third case of third-country nationals has brought to our attention that MNCs can recruit their workforces from many third world nations provided the costs associated with such ventures are affordable and appealing to them. In a nutshell therefore, this essay has demonstrated that MNCs have diversified their organizational members to derive the varying and multiple benefits associated with embracing such.
Barbian, D. (2006). Expatriates predeparture training: An investigation into the approach of two German-based MNCs. Germany: GRIN Verlag.
Haghirian, P. (2010). Multinationals and cross-cultural management: The transfer of knowledge within multinational corporations. New York: Taylor & Francis.
Rasmussen, T. (2006). Diversity mosaic participant workbook: Developing cultural competence. San Francisco: John Wiley & Sons.
Vance, C. M. & Paik, Y. (2010). Managing a global workforce: Challenges and opportunities in international human resource management. 2nd edn. New York: M.E. Sharpe.