The success of multinational businesses’ competitiveness in the global economy is conditional on the potation capability to develop and acclimatize their resources tactically to the gradation of the widening global playing ground.
Business practices that firms adopt to maintain competitiveness need to be developed in concurrence with their human resource departments (Ferner 2007: 98). The human resource strategies should be congruent with the firm’s strategic plan so as to enhance successful implementation of their business strategies
Given that it is individuals within the business who sell and market, develop and make products, make decisions and implement programs, human resource management is essential to the success of any business. To be strategic human resource strategies should maximize workers’ effectiveness according to their firm’s visions, aims and goals.
However, in a multi-cultural world and global economy, cultural misunderstandings persistently threaten an organization’s ability to function in an efficient and cooperative manner. Thus, for effective management of a multi-cultural company, it is essential that the management should be familiar with its staff culture and traditions (Poole, 1999: 78, Bell, 2007: 69).
International human resource departments have a difficult role: they have to come up with strategies that will sustain correspondence with the entire strategic plan of their particular multi-national companies, while matching with the economic, social, political and legal constraints of the numerous host nations.
Global management practices in multi-national corporations will differ significantly. The strategies, practices, systems and structures developed to implement those strategies will as well differ. Developing global practices can be challenging, given the conflicting demands on the multinationals placed by the global environment.
These conflicting demands frequently crop up as multinationals try to maximize their capabilities to handle the demands of the host nations (local responsiveness), while trying to uphold their controlled corporate structure globally (global integration). Mostly, the more autonomy foreign subsidiaries have to operate autonomously and address local issues, the less integrated the global company gets – and vice versa (Beret, Mendez, Paraponaris & Richez 2003: 450).
Numerous staffing strategies (such as recruitment, selection and placement) are conditional on the multinationals worldwide management strategy. The human resource management structures that multinationals adopt for their foreign operations and the socialization strategies applied for host national staff are examples of strategies that may differ in accordance to the adopted policy.
For instance, when staffing a foreign subsidiary, many multinationals employ expatriate workers to fill a variety of key positions abroad. If positions in foreign subsidiaries are not staffed by expatriates, they are staffed by either third country citizens or host citizens.
There are benefits accruing with host nationals staffing multinationals operations, since host citizens are versant with their own nation’s cultures, traditions, legislations and resources, thus easing the work of running the operations. Furthermore, unlike expatriates, there are no relocation expenses in connection with host citizens.
To handle multi-cultural issues, the human resource management can; enable cultural self awareness, create cultural consciousness, have multi-cultural negotiations, or adopt a global mindset or “global thinking” (Williamson 2002: 1380, Caligiuri 2000: 70).
References
Bell, M. P. 2007. Diversity in organizations. Mason, OH: Thomson South-Western.
Beret, P. Mendez, A. Paraponaris, C. & Richez-Battesti, N. 2003. R&D personnel and human resource management in multinational companies: between homogenization and differentiation. The international Journal of Human Resource Management, Vol. 14, No. 3, pp. 449-468.
Caligiuri, P. M. 2000. Selecting expatriates for personality characteristics: A moderating effect of personality on the relationship between host national contact and crosscultural adjustment. Management International Review, 40(1): 61-80.
Ferner, A. 2007. Multinational Companies and Human Resource Management: an Overview of Research Issues. Human Resource Management Journal, Vol. 4, No. 3, pp. 79-102.
Poole, M. 1999. Human Resource Management: Critical Perspectives on Business and Management, Volume 1. London: Routledge.
Williamson, D. 2002. Forward from a critique of Hofstede’s model of national culture. Human Relations, 55 (11): 1373-1395.