Impact of Globalization on Management of Multinational Enterprises - Case Study Example

Task: A marketing report on two issues; a general issue and a specific one on Electrolux Company (Sweden) Student’s Name: Course Code: Date of Submission: The impact of globalisation on the management of the Multinational Enterprise’s (MNE) Employees The roles and responsibilities of human resources departments are changing as the pressures of globalization penetrate the modern business. Global staffing and management of human resources embedded in diverse cultures and language skills spread in different nations are the key goals of globally based human resource departments (Boundless 2014). Globalisation has had a tremendous effect on how multinationals manage their employees. First, it has impacted on how the multinationals recruit potential employees. The multinationals have diversified their recruitment exercises (Bradley 2015). Because of globalisation, multinationals are now making associations with customers and stakeholders from diverse cultures, social backgrounds and languages. These groups of people assume a different set of values, customs, beliefs, symbols and language (Sims 2007). In responding to that companies have also resorted to hiring employees from equally diverse backgrounds. Companies appreciate the fact that in order to have a competitive advantage they need employees within their ranks with diverse backgrounds. This will ensure that relates well to the customers because they understand their cultures and way of life and can also contribute diversified ideas to the organization (Bradley 2015). Case in point here is Electrolux, the appliance company that has for many years now have had a strategy of recruiting and developing a group of international managers derived from different countries. These creates a pool of managers who are utilised by the company in their various facilities whenever the need arises (Treven 2001). Globalisation has also put companies on their toes as far as supporting their employees’ professional development is concerned. This is in order to attract and retain these employees as globalisation had also within itself increased employee turnover. Companies have pushed for professional development of their employees (Bradley 2015). Companies have started affording their employees opportunities to develop and enhance their career related goals. Companies even sponsor their employees to earn university education while others allow the employees to attend conferences, networking events and training days. This creates in employees a sense of being taken care of (Bradley 2015). Electrolux has for years now been training the subsidiary managers on how to actually meet their customers’ demands by learning their needs through the Consumer Innovation Program which highlights on how they can innovate (Bloomberg 2006). There has been a greater emphasis on the training of employees due to globalisation. Globalisation has presented a new environment for business firms. And in order for the multinationals to operate in these new challenging environments the employees of the multinationals require to be trained in new skills to cope in the new cultures that the organization is spreading its wings to (Sims 2007). Some companies even host language classes for their employees working in the call centre section. Training can also be on how to use global software to automate operations. Training gives these companies a competitive edge in the global markets (Bradley 2015). Globalisation has also made multinationals to embrace laws governing employees in all jurisdictions. Companies have started having a well understanding of minimum wage requirements, working hours, tax allowances and the union laws inherent in the country these organisations are based. Case in point is the scenario that Electrolux Thailand found itself in when it didn’t respond to its workers demand in increasing their annual salaries. The company instead dismissed the workers union president and illegally dismissed the employees (Industriall Union 2015). This is an indication of the lack of knowledge on the existing labour laws within Thailand on the part of management and lack of touch with its employees and inability to understand and respond to their requests in a civilised and democratic way. Globalisation has also introduced new technologies into the workplace. The adoption of technological progress within multinationals has seen workers in the global arena create virtual networks through the internet. Most multinationals have embraced these technologies with a view that it will enable them stay ahead in the competitive global arena. The technology enables its employees to collaborate and compete, share work and knowledge. The human resource personnel through the use of human resource information systems, that collects and stores large volumes of data, are capable of analysing the data to create business insights and predict future market demands and fill those needs in time hence customer satisfaction (Kapoor 2012). According to Kapoor (2012), companies have started embracing the aspect of human resource management as a strategic partner. Those multinationals that are willing to adapt and align their human resources practices to the changing global labour market specifications will have the ability to attract and retain quality talent. Those that are willing to foretell the needs of their workforce especially for high quality talent will be more likely to have an edge in the competitive global market arena. Type of training and development Electrolux would use on its employees in its international subsidiaries An organization’s capability to attract and retain a top quality workforce is an important aspect that should be looked at by any organisation intending to spread its wings into the international marketplace (Sims 2007). Hence, developing and training the workforce is one way of achieving a competitive edge in the global marketplace. Electrolux should train expatriates so as to fit into their new stations of work. Expatriates are employees assigned to work at stations outside their home country (Harris 2008). These expatriates move into these new countries unaware of what awaits them together with their families. Hence, pre-departure training for the relocating assignee and family is paramount. This will help the expatriate and his or her family to adapt well into the new environment and prepare for successful associations in both social and business situations in the new country (Global.LT 2015). Cultural training prepares the expatriate and the family in general by introducing cultural concepts drawing comparisons between one’s culture and the culture in the host country and its influence to business life and daily social life. This prepares the assignee and his or her family to live and work successfully in the host culture. It also brings to the attention of the expatriate of the challenges inherent in the host country hence prepare well in advance on how to navigate them with ease (Global.LT 2015). Corresponding to this is the international leader program within the Electrolux ranks, a program which provides chances to employees to form networks and leverage global skills (Electrolux 2015). But Electrolux should reinforce this by introducing cross cultural training since most European multinational provide cross-cultural and language training to the expatriate and the spouse (Harris 2008). Electrolux should also train the locals in the host country in leadership skill so as to cut short on expatriate costs. Leadership development programs will assist leaders and managers to be well placed to deal with employee challenges such as inclusion, retention and performance in the cultural and geographical diverse settings (Global.LT 2015). In Electrolux this has been incorporated in the international leader program and the training of managers with a global perspective but this need to be extended to all its subsidiaries and be intensified. Repatriation training is also important. As statistics indicate that most repatriates are not willing to come back to the same organisation. So this type of training will ensure that the repatriates come back to the organisation and help the organisation by utilising his or her international experience. Training on reverse culture shock and reintegration of repatriates will go a long way in ensuring that talent is retained in the corporation (Global.LT 2015). Another important aspect that requires the attention of Electrolux in all its subsidiaries is the training and development of talent. This is because a firm’s talent can be the reason for sustained competitive advantage in the global market. The supply of talent is proving to be scarce in the global labour market. This accelerated with the fact that most multinationals cannot hold on to talent for much longer especially in Brazil, India and China (Kapoor 2012). Thus, developing and retaining talent will be important in preparation for the replacements of the ageing and the retiring baby boomers (Kapoor 2012). Electrolux should also turn its attention in training its employees in the emerging technological systems that will enable and facilitate access of information from any of its subsidiaries just by a click of a button and also employees to be able to form virtual teams. Thus, it should develop appropriate technology and invest in training employees on how to utilise the same to achieve effectiveness in their duties. Data can be easily accessed by employees and acted upon and used to tell the future market conditions with up to date technology (Kapoor 2012). There should also be the setting up of motivation and reward management departments with the subsidiaries that will be charged with letting the employees on a regular basis know of the rewards in store for them and letting them know about the plans of wages and salaries (Sims 2007). This department will also be charged with letting the top management know of how the employees need to be rewarded and motivated on a regular basis. This if were in place it would have avoided the employee crisis that was experienced by Electrolux Thailand in 2013. There should be the development of cultural centres in these subsidiaries to expose employees the various global cultures and customs inherent in the various countries. This will make the employees ready to deal with fellow employees and customers across boundaries with ease and in effective ways. There need also to be in place training of employees on the various laws and regulations inherent in various countries in order to avoid trampling on the rights of nationals of a particular country. References Bloomberg 2006, ‘Electrolux redesigns itself’, viewed 21 April 2015, http://www.bloomberg.com/bw/stories/2006-11-26/electrolux-redesigns-itself Boundless 2014, ‘The challenge of Globalisation’, Boundless management, viewed 21 April 2015, https://www.boundless.com/management/textbooks/boundless-management- textbook/introduction-to-management-1/current-challenges-in-management-21/the- challenge-of-globalization-133-10568/ Bradley, J C 2015, ‘Effects of Globalisation on human resource management’, viewed 21 April 2015, http://smallbusiness.chron.com/effects-globalization-human-resources- management-61611.html Electrolux 2015, ‘Leadership development’, viewed 21 April 2015, http://www.electroluxgroup.com/en/leadership-development-2799/ Global.LT 2015, ‘Multicultural training’, viewed 21 April 2015, http://www.global- lt.com/en/us/cultural-training/expatriate-training.html Harris, M M (ed.) 2008, ‘Handbook of research in international human resource management’, Taylor and Francis, New York. Industriall Union 2015, ‘Electrolux imprisons then sacks workers in Thailand’, viewed 21 April 2015, http://www.industriall-union.org/electrolux-imprisons-then-sacks-workers-in- thailand Kapoor, B 2012, ‘Impact of globalisation on human resource management’, viewed 21 April 2015, http://www.jimsjournal.org/6%20Bhushan%20Kapoor.pdf Sims, R R (ed.) 2007, ‘Human resource management: Contemporary issues, challenges and opportunities’, Information Age Publishing Inc., Charlotte Treven, S 2001, ‘Human resource management in international organisations’, Management, vol. 6, no. 1, pp. 177-189. Read More