Multinational Human Resource Management - Essay Example

? Multinational Human Resource Management Lecturer: Multinational Human Resource Management Multinational companies have been confronted with stiff competition for the past few decades. Forces of globalization such a use of e-marketing, linearization of international trade, product integration and marketing research have all posed profound impact on the way companies may improve their business performance. Therefore, human resource managers have made significant efforts of transforming the organization through implementing business strategies and policies that can enable them to achieve a competitive advantage in the global market. Human assets have become a recent and emerging source of competitive advantage for multinational companies for the purpose of supporting functions of strategic important. Human resource policies and practices in the global business companies have become significant. This is because they act as a mechanism through which organizations can coordinate and control international business operations. Human resource systems or functions and values help in shaping organization culture and human asset. Despite the efforts HR managers made in transforming organizations, in an achieving a competitive advantage, they face varied challenges. To larger extent, human resource managers in multinational companies are restricted by cultural and institutional factors in implementing policies and practices across their subsidiaries. Companies in varied nations differ with respect to their human resource management policies and practices. Therefore, shifting these HR policies and practices to varied nations appears to be somewhat challenging1. One of the main obstacles multinational companies face in HR management policies and practices transfer is national cultural differences. Cultural difference is one of the critical elements that have restricted HR managers in multinational companies, in implementing policies and practices across their subsidiaries. Culture is considered among the significant organizational elements that shapes value and creates organizational change. However, cultures can impacts organizational performance in case it is not taken into considerations seriously. Culture can create transformation and increase organizational flexibility and agility as multinational companies strive to become competitive in the global market2. However, many HR managers in multinational companies face complex issues in business operation because culture changes from one business environment to another. One of the cultural frameworks that remain widely used across the global is Hofstede’s cultural framework. This framework is significant for multinational companies, but it also creates complex issues to managers in the process of policy implementations and practices. Culture impacts the role of HR managers when they attempt to address the issue of cultural differences on HR system change. 3Ghemawat and Reiche argue that the greater cultural distances among host and home companies, the complexity in the change process. Many companies employ the approach of Hofstede of national cultural differences, which include power distance, individualism, masculinity, uncertainty and Confucian dynamism in establishing a relationship and various outcomes. Managers use high performance work system practices in relation to Hofstede cultural dimensions in various ways in order to create organizational transformation. However, the national cultural differences vary from one country to another; hence, they impact effective organizational performance from multinational companies. The legal and regulatory environment varies from one state to another in which these multinational companies are situated. Labor union is one of the institutional factors that impact beliefs and organizational norms within the associate companies. Many countries have varied laws that protect employees who participate in unions in order to support employment stability and compensation practices. For instance, Germany has strong laws that protect employees and similar policies exist in European Union countries. This may make multination HR managers undergo difficult moment in an attempt of trying to align or implement their policies and practices for multinational companies. The varying union policies can be an indicative way towards higher likelihood of conflicts4. This is because they can undermine the underpinning effective high power work system implementation. The assumption behind this is that the utilization of high performance work system practices may decrease across the institutional subsidiaries as the percentage of union group increases. Cultural differences have impacted the role of human managers in multinational companies on the way they can implement policies and practices across their subsidiaries. Cultural differences differ from one country to another, and this may make managers face difficulties in the process of policy or strategy implementation5. Although cultural aspects are difficult to observe and measure, they are profoundly significant in any organization. Failure of HR mangers to appreciate or understand them may lead to poor relationships, embarrassment, and they can drag business perform down. For instance, the Korean airline company is one of the significant multinational companies that have national culture on the way they perform their business. This national cultural difference across border interaction has contributed to better performance of the organization. This is because they shape the behavior or influences organizational aspects including governmental regulations and policies. However, these cultural differences have considerably impacted the way HR managers can implement policies and practices across their subsidiaries6. This is because persistence of cultural value differences across the everyday operations of multinational companies; thus posing substantial complexity. Culture poses challenges for multinational companies because some companies especially that are owned by families, relatives or owners create issues to multinational human resource managers. Despite globalization that has created to cultural changes due to westernization, some countries still value their cultural aspects considerably7. This has led to significant challenges to managers on the way they can play their roles and create change for better achievement of a competitive advantage. For instance, multinational companies operating in Greece face considerable challenges in the management or organization because of cultural issues. This is because the Greek management is characterized by unique power and control ways of handing top management whereby many companies constitutes of relatives and owners. They have strong family bond, which is one of the main feature of their culture; thus impacting the way managers in these areas manages business. The Greece culture has beliefs that one cannot be trusted in case he or she is not among the family or extended members. Therefore, the first management priority is handed or given to the family members, and this tends to be difficult when it comes to policy implementation process across the organizational subsidiaries. Culture and institution factors have significantly affected the host country human resources in policy implementation and practices of international affiliates of multinational companies. The comparative 8HR management knowledge requires companies to implement a significant extent to culture and institutional aspects of a host state. These may include aspects such as regulations, public policies and other varied assets. However, these changes have considerably led to varied challenges; thus, managers have now resolved to adopt high performance work system practices in domestic operations. This is an approach that relies on effective teamwork, training, performance management and motivation in the work place, but this transformation have become complex in some business environment. This is because of the varying degree of organization culture and institution aspects that contributes to the complex nature for managers towards achieving high performance rate. The determinant of human resource transfer by multinational companies is high rooted to a larger extent in current institutional theory. Institutional can be defined as normative and regulative structures through which varied activities takes place in order to provide stability as well as meaning to social behaviors. These institutional structures employ an institutional theory that is concerned on the way imperative environmental forces promotes homogeneity across all subsidiaries with regard to structure and process. Therefore, for the institution to become success, human resource managers employ policies and practices that should be followed in order to achieve the desired or intended goals of an organization. However, 9different institutional factors such as administrative regulations impact the performance of multinational companies. Managers make an attempt of applying their leadership skills and implementing their policies, which organization should follow, but these becomes unsuccessful. This is because institutional factors such as the law governing intuitional structure vary from one company to another. Although, the dominance of globalization management approaches has led to the belief that universal management practices can be applied anywhere across the globe, the research indicates that managerial values, leadership roles and managerial behaviors vary across nation cultures and institutions. There is no one single way of managing institutions because of varied national cultures and institutional arrangements. Numerous management scholars have made an attempt of adopting a cultural perspective on institutions, and they claim that societies or countries differ from one another in respect to cultural and institutional arrangement aspects. This distinctiveness approaches can be reflected in the way that managers manage organizations. The issue of management and institutional factors cannot be isolated from their certain cultural environment. Therefore, culture and institutional factors can lead to negative consequences that can slow down the performance of multinational companies across subsidiaries. Foreign corporations seeking to execute policies and practices of western management approaches often face diverse personal issues10. This results due to a different context of institutional regulations and cultural aspects where companies operate. Companies employ conceptual framework that emphasizes on HR management practices and the main issue related to adaptation of diverse policies at the national context. For instance, China is one of the countries that face varied issues in an attempt of using western managerial approach especially in recruiting are training employees with suitable or professional qualifications. This contributes to varied challenges; thus making multinational corporations operating in China difficult to meet their stated objectives; hence impacting effective performance11. To larger extent, human resource managers in multinational companies are restricted by cultural and institutional factors in implementing policies and practices across their subsidiaries. Cultural difference is one of the critical elements that have restricted HR managers in multinational companies from achieving their stated objectives. They force multinational companies to alter their trade practices and strategies in environment they operate. Labor union is one of the institutional factors that impact beliefs and organizational norms within the associate companies. The determinant of human resource transfer by multinational companies is high rooted to a larger extent in current institutional theory. Managerial values, leadership roles and managerial behaviors vary across nation cultures and institutions; thus, they can impact the performance for multinational companies. Bibliography Cooke, W.N. “Multinational Companies and Global Human Resource Strategies”, Westport, Conn: Quorum Books, 2003.  Edwards, T., Colling, T. &Ferner, A. “Conceptual Approaches to the Transfer of Employment Practices in Multinational Companies: an Integrated Approach”, Human Resource Management Journal, 17, 3(2007): Pp.201-217. Edwards, T., Jalette, P.&Tregaskis, O. (2012). “To What Extent Is There a Regional Logic in the Management of Labour in Multinational Companies? Evidence from Europe and North America”,International Journal of Human Resource Management , 23 (12), Pp. 2468-2490. Ghemawat, P & Reiche S. ‘National Cultural Differences and Multinational Business’, Globalization Note Series, 2011, Pp, 1-18. 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