Diversity of HR Practices Employed by Multinational Corporation in Two Countries - Assignment Example

? The Diversity of HR Practices employed by different branches of a Multinational Corporation in two countries and their Respective influence on the operation of the organization Name Professor Course Date Definition of the research This research will seek to present the initial findings of multi-national companies’ employment practices. In this report, we draw on the assessment data from a multi-national company operational in the United Kingdom, namely coca cola, and try to scrutinize the role of the company’s human resource function in setting auxiliary level human resource policy. According to (Armstrong, 2008), almost all of the human resource managers’ effect various human resource practices to ensure that their operations are successful. Logistic analysis has been used to study the comparative impact of human resource organisational structures. There are many determinants to an organisations corporate human resource’s involvement in setting subsidiary level human resource policy up to and including the laws that exist in the country of origin. Literature search, strategy and aims In this paper, we will try to argue that human resource structures arbitrate the impact of the country of origin and the current host country of the subsidiary. For coca cola, the results we found tend to support an arbitration effect: it is important to note that the effects of country of origin on corporate human resource’s role are umpired by human resource structures for United States of America’s companies but the same is not true for Nigeria’s companies. The findings also imply that the salience of human resource structures as apparatus for influencing auxiliary level human resource policy is not universal across all multi-national companies’. Data was collected from the company website, “Management, 4th edition” by Englewood Cliffs, “How institutions evolve: insights from comparative historical analysis” by Streeck, W. and Thelen, K (2005) Farndale, E. and J. Paauwe (2005), “The Role of Corporate HR Functions in Multinational Corporations: The interplay between corporate, regional/national and plant level” Cornell Working Paper Series, Working Paper 05-10. One of the key feature of the responsibility of multi-national companies’ as job creators is their ability to disseminate their trade across borders. By doing this, the companies improve their competitive edge. In this report we will consider the overseas multi-national company Coca-Cola and seek to find out how it is as a player in globalisation at the general level. Multinationals tend to act as channels for the movement of the ‘incumbent’ set of laws of the domicile’s national business structure by controlling auxiliary level guiding principles and practices. This report considers the scope in which the structural features of the United Kingdom’s Coca-Cola plant differs from that of Nigeria in corporate human resource at the organisational level. Preliminary review and evaluation of the relevant literature To a large extent, the coca cola company since it began operations, has had the lavishness of having to deal with a relatively narrow set of financial, cultural, and even legal requirements, as most of the countries it operates in are basically very entrepreneurial and competitive societies. For a company that is running numerous businesses overseas, it is usually not blessed with such relative homogeneity. For example, the least number of legally authorized holidays may vary from none in a country like the United Kingdom to five weeks annually in Nigeria. Currently, a very troubling issue is the need for every company to tighten its security and that of its employees; this is mostly due to the acts of terrorism that have been witnessed in the past. Coca cola just like most other companies has been training its employees especially those who are to be sent to places such as Colombia and Nicaragua, where kidnapping of alien managers is the order of the day. How the human resource function is handled in multinational companies like coca cola is convoluted largely by the need to become accustomed to human resource guiding principles and procedures and adjust to the differences among countries in which each branch is based. We will seek to answer the question: how does coca cola’s human resource policy cut across borders? In the course of doing business in both countries, coca cola encounters some of the following inter country disparities that demand such adjustment. Cultural Factors Cultural differences are as diverse as the people who practice them and they vary differently in both countries. The result is that their diversity demands matching differences in human resource practices for all coca cola’s subsidiaries in these countries. The cultural standards of say the Far East and their significance there affect the typical Nigeria’s worker’s outlook of his/ her relationship with the coca cola company, its management as well as sway how that individual works. It is said that the Nigeria’s labour force look forward to lifetime employ and in return, they offer their loyalty. In a study by Professor Geert Hofstede, he draws attention to other global cultural disparities. Hofstede starts by saying that civilisations vary first in what he calls “power distance”; meaning that, they diverge in the degree to which the people at the lowest level of the society accept and look forward to that power being disseminated unequally. He writes in a chapter he titled “Individualism versus collectivism” that bonds between persons are in normal situations slack rather than close. The countries coca cola operates in can be classified either as individualistic countries and these are those where all employees are expected to take care of themselves and their immediate next of kin. These individualistic countries include the United Kingdom and the United States of America. The second category is that of collectivist countries and these include Nigeria and Pakistan. These inter country differences in culture impact on coca cola’s human resource management methods. First, the company has had to adapt human resource practices such as employee selection and training and salary schedules and plans and customise them according to local cultural norms. Coca cola has tried hard to ensure that human resource staff members in any subsidiary in the UK or Nigeria are drawn from the populace of the country currently hosting it. It is a very sensitive undertaking when trying to select an employee to fill an opening in a foreign country. The company has to consider the cultural demands of fellow workers. As one expert phrases it, “if a human resource staff member shares the same cultural milieu as his/her employees, he/she is more likely to be responsive to the needs of said employees and their prospects in the place of work. This fact makes them administrate the company better.” Economic Factors The two countries have different economic systems in place and these too translate into differences in human resource practices. Nigeria has or uses the free enterprise system, in these countries coca cola’s need for efficiency and competence tends to support human resource policies that add value and productivity, resourceful workers, and they also use it to cut some staff when the economy dictates so. Where the country’s economic systems tend to be more socialist, coca cola’s human resource practices tend to move towards the prevention of unemployment, and this often happens at the expense of achieving efficiency mostly in the UK. Labour Cost Factors Just like culture, labour costs vary in both of these countries and these affects human resource practices. Where the labour costs are quite high like the UK, the company will purposefully focus on employee efficiency, this means that the human resource department will require employees to sign performance contracts with the sole aim of getting their money’s worth and improve the workers’ performance. These inter-country variances in labour rates are significant. For example, hourly reparation costs in United States dollars for assembly workers in manufacturing in recent times ranged from a high of $25.56 in the UK to an all time low of $2.65 in Nigeria. Apart from the monetary aspect, there also existed disparities in the number of hours worked. For example, the workforce in Nigeria averaged an estimate of about 1980 hours of work per year, while their counterparts in the UK averaged only 1648 hours in the same period. Workers in most European countries normally receive about 4 weeks of holiday in contrast with the 2 to 3 weeks the workers in Nigeria get. Industrial Relations Factors Industrial relations in any country affect the business differently, and particularly the rapports between the worker, the trade union, and coca cola, vary noticeably from country to country and have a massive impact on human resource practices. In a country like Germany, for example, co-determination is the canon. Here, workers have the legal right to representation during the setting of any company’s policies. On the other hand and these happens in most of the countries coca cola has set up shop, the government meddles little in the affairs between the company and the trade unions. Summary The differences in culture, economic structures, costs of hiring labour and employer employee industrial relations arrangements complicate the task of choosing, teaching, and supervision of the workforce abroad. These differences produce equivalent differences in management techniques and practices of all coca cola’s subsidiaries from country to country. Reflections and discussions on the implications of this study In conclusion, the analyses imply that human resource arrangements in different countries are imperative predictors of corporate human resource and influence decision making and human resource policies in all coca cola companies. In addition, the facts and data indicate that coca cola companies exercise control through human resource structures which have the advantage of increasing corporate human resource’s involvement in the existing local policies. Just like coca cola, companies that want to go multinational will be confronted with a lot of new tests. As a result, these corporations need to put measures in place regarding the selection, workers’ training, monetary compensation, and repatriation of overseas employees. Differences in the cost of labour, trade union industrial association norms, cultural and economic factors all influence a company’s human resource processes and they vary from country to country. Locals rather than aliens should be chosen to fill most administrative positions. Prior to being sent to a new country, it is important to conduct training for overseas administrators in the human resource department and probably by a local. This training should typically focus on cultural differences, attitudes, behaviour, and facts about the host country. Just like coca cola, organisations opening branches abroad find considerable differences in industry relations practices in different parts of the world. For example, in European countries, differences subsist with respect to the art of collective bargaining, trade union independence, formation and use of employer associations, and complaint treatment. The study presented here is introductory and involves a company that is very large and thus could not be sufficiently covered at this first stage of a two-staged survey process. Caution needs to be observed when interpreting this report on subsidiary and branch independence as a large percentage of coca cola companies assert that they have total independence in human resource policy decision making. It is recommended that an extensive survey be conducted to explore this issue further. References Armstrong, M. 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