Cultural Implications on MNCs of Employee Voice Approaches - Essay Example

Cultural implications on MNCs of Employee Voice Approaches Employee voice is an issue that has attracted a lot of debate over the years. There are times in history of employee-employer relationship when there was a very negligible space for an employee to participate or voice out their views in the way they are treated vis-à-vis they way they would wish to be treated by the management (Wilkinson, 2014). Over time, things have changed, and still continue to change and employees are increasingly becoming enabled to voice out their opinion on wide-ranging human resource issues. They do it either through structured representation, otherwise referred to as indirect voice, or engage the management directly, a situation also referred to as direct voice. This assignment is an investigation of the cultural implications on the multinational corporations of the different approaches to employee voice. MNCs are large business organizations that operate on a global scale and are headquartered in the country and city of origin. The top leadership of any MNC is always based at the head office, but there are regional and country managers that oversee their operations at regional and country levels respectively. Organizational culture encompasses all the business norms of a business, in this case MNCs. The norms are the values, leadership styles, ways of doing business, human resource issues, goals, missions and more. The question, thus, is whether the different approaches to employee voice affects organizational culture of MNCs in any way. Employee voice approaches have never been a static affair. They have been changing and taking different dimensions over the years. MNCs have been faced with the trickiest of situations because of their unique business nature. They operate in very diverse environments before each country offers a unique business environment for any MNC. Attaining uniformity in the manner that employees of the same MNC are treated has been one tricky affair (Marginson & Sisson, 2004). Labor environments are unique due to the different labor legislations in the different hosting countries. Coca-Cola is one of the biggest MNCs in the world currently. The diverse environments of operation have given rise to different approaches to employee voice, and therefore constantly make it necessary for MNCs like Coca-Cola to adjust their business cultures in order to conform to diversity. Business goals remain the same, but other aspects of organizational culture such as human resource policies, ways of doing business and leadership styles differ from country to country. The three are the greatest contributors to the differing employer-employee relationships from country to country. In the past, the management of most of the MNCs favored direct voice as a way of engaging the employees in matters touching on their welfare. They were hardly ever allowed to have any definitive contribution to key decisions touching on policy matters. This voice approach was very friendly to the MNCs because employees could be manipulated from their own positions on issues, and the MNC managements would get away with it (Lawler & Hundley, 2008). In most cases, the approach did not result in win-win situations for both the MNC management and the employees. At that time, the employees did not have any other options at their disposal that could help them voice out their plight and opinions most effectively. They had their misgivings. Employee voice has been a continually growing and mutating issue. As times changed, employees got a little more aggressive with their demands. There have been increasing demands for more participation and inclusion. Such agitations swept across the globe, and proved to be the game-changing factor, both for the MNC managements and the MNC employees. Realizing that they were on the receiving end of the direct voice approach which proved to be prone to manipulation by the top management of the MNCs, the employees resorted to an indirect approach (Marginson & Sisson, 2004). The national and global labor organizations called for employees having elected representatives to be the ones negotiating directly with the management on issues touching on their affairs and the working environments. The indirect voice takes the forms of trade unions, work councils, employee representatives nominated to management councils and more. They are all different and unique, largely due to the different environments provided by the different countries where MNCs operate (Tchobanian, 1995). To date, the indirect employee voice approach has proven to be more productive for the MNC employees the world over. MNCs, like any other business, understand that no business can take place in a crisis situation that failure to listen and negotiate with employees may cause. They have, therefore, had to make very necessary adjustments to the aspects of organizational culture touching directly or, to an extent, even indirectly on the employee affairs. Today, very much unlike before, employees can engage in industrial action if their demands are not met. MNC managements try as much as possible to avoid such activities that may disrupt the efficient functioning of the regional and/or country branches. There is another employee voice approach that is a composite of direct and indirect voice, as it applies a combination of aspects of the two main approaches. The third approach is the most preferred by the MNCs because it allows the management to take direct voice as the first option. The indirect voice becomes necessary in cases where direct voice cannot arrive at a common understanding on given issues (Collings, Gunnigle, Quintanilla & Tempel, 2006). The MNCs, as they are today, have continually had to change tact. Most of them have had to resort to employee appeasement and appraisal as a way of creating a friendly environment in which both the managements and the employees can best perform and optimally deliver on organizational goals and objectives. The outcome of the appeasement strategy has led to the rebirth of the direct voice, which, as the MNCs have realized, is the least chaotic and least combative way of engaging employees. It provides a platform where an individual employee can productively engage the top management of an MNC with utmost sobriety (Whitfield, Marginson & Brown, 1994). Most MNCs have realized that even a junior employee can give opinions that have the potential of growing the business. Direct voice approach is the most preferred in the United States MNCs. Such United States MNCs top managements have always had the wish to apply the direct voice approach in all their foreign-based subsidiaries, but that has been a tricky affair especially when it comes to Western Europe and African countries where the indirect (employee representation) approach has become deeply entrenched. In Germany, for instance, there must be work councils that handle employee affairs (Ferner & Varul, 1995). Such policy clashes between the US and the nations hosting the USA MNCs subsidiaries has made things very tricky for the MNCs, but they have over the years managed to cede grounds for the sake of business success. They felt compelled to comply with local laws and labor arrangements in the host countries. Voice arrangements cannot be separated from the effects they have on employment patterns and employee-employer relationship, though the direct voice approach is the best because it causes employees not to feel overpowered or relegated to peripheral contributions to serious organizational issues. MNCs, whether US-based, UK-based or Japan-based, have one thing in common; they both value innovativeness (Ferner, Colling, Almond & Edward, 2005). Achieving innovativeness requires an environment in which employees are more directly, rather than indirectly involved. Most MNCs today have streamlined their act to accommodate the direct employee voice approach, which is what United States and UK MNCs have always advocated. This makes it easy for most of them to survive the storm that diversity and different environments bring. The managements of MNCs have come to the realization that establishing a consultative forum in which the employee voice is heard without stringent precondition has overarching benefits to business growth. Apart from enhancing productivity and having a happy working lot, MNCs have become breeding grounds for innovativeness and creativity (Schnabel, Zagelmever & Kohaut, 2006). Unlike the past popular belief by the MNCs managements that employees should never be afforded to much space for airing views and grievances, today’s MNCs have become more liberal, and perceive effective communication between the managements and employees as the being a key approach to achieving organizational goals. Employee voice is a motivating factor, and is thought to be a way of creating harmony between the MNCs top management and employees. In essence, eliminates the rift between the two entities. The direct or indirect voice can be weak or strong voice instruments depending on the environment in which nay of them has been applied. In the US, for instance, MNCs consider direct voice to be the only way of engagement between MNC management and the employees. Employee desire for inclusion and participation are more easily achieved in the USA through direct voice approach than anywhere else in the world. The employees are made to have a sense of belonging because they are engaged in a two-way manner without representatives. This approach impacts very positively on the employee confidence and productivity. Today, even the indirect voice approach has become unreliable as the representatives such as work councils and unions have resorted to pursuing self-interests rather than the interests of the employee groups that they represent. In parts of the world, such representative voice approaches have become more prone to manipulation through acts of bribery, and thus made it necessary to adopt a redefined direct voice approach in sections of the western world. A MNC’s country of origin largely determines the voice approach taken, but more success has been registered where the countries of origin of the MNCs consider the prevailing conditions in the host environments (Ferner, 1997). A hybrid of direct and indirect voice, for instance, works best for US MNCs having subsidiaries in countries that require representative voice like Germany. It is no doubt that US MNCs do not favor unionism, and have for a very long time been hostile to the combative approach. Therefore, they would never totally abandon the direct voice approach in favor of any other approach. On the flipside, they also know they must continue doing business in the different countries. That is the reason they have the hybrid approach as the fallback option when it comes to engaging their employees. It is thus no wonder that the US MNCs have the highest index when it comes to innovativeness (Ferner, 1997). In the African set up, trade unionism is the only way of adequately addressing employee problems. Labor organizations sprang up mainly because employees felt they were paid poorly and the direct voice approach proved very ineffective in changing their situation. Direct voice approach works best in environments where employees work as a unit when it comes to welfare matters. At some point, subsidiaries of MNCs hosted in African countries were paying very poorly and offered very limited space for employees to voice out their plight. This is what contributed to the birth of an activist society where unionism was the only sure instrument of ensuring that employees were seriously engaged in the issues touching directly or indirectly in their welfare. Over time, MNC employees in African countries have been enabled to participate more in even more serious affairs of the MNCs (Lawler & Hundley, 2008). It can be concluded that the voice systems have greatly led to massive alterations of the organizational norms and cultures of virtually all the major MNCs all round the world. Several adjustments have had to be made to make it possible to fit in the local systems and arrangements of the host countries. The old direct voice approach that didn’t prove very effective for employees has been redefined and is now increasingly taking center stage. The combative, forceful and, many cases, chaotic unionist/representative voice approach is hardly applied in solitude. The desire to have a peaceful business environment overrides all else. MNCs are increasingly embracing diversity and recognizing that management uniformity may not be applicable in today’s international business. Direct, indirect or a hybrid of the two voice approaches are applied by the MNCs depending on the environment of operation. The environment in this case encompasses all the prevailing conditions in the different countries of operation, such as local labor issues and a plethora of legal issues touching on employer-employee gainful relationship (McDonnell, Lavelle, Gunnigle & Collings, 2007). There still remains no uniformity in the employee voice approaches anywhere in the world, and none of it is like to be achieved in the future. The MNCs only try to conform to the diversity and it works both to their advantage as far as achievement of business and organizational goals, and also to that of the employees. This results in a win-win situation for both the MNC management and employees. References Colling T, Gunnigle P, Quintanilla J and Tempel A (2006) ‘Collective representation and participation’ in Almond P and Ferner A (eds) American Multinationals in Europe. 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