Intercultural Management: The Forces for Global Convergence in a Labor System - Assignment Example

Unit VII Question What are the forces for global convergence in a labor system? What are the forces for a labor system to maintain divergence or establish a divergent system? The labor systems in the world are subject to the need for organizing the economic life in the best way so that the invisible hand of the labor market will ensure that the most competitive institutions survive. This has caused the labor systems to choose either global convergence or divergent systems. Convergence in labor systems involves the movement of workplace and management practices leading to reduced workplace disparities between two countries. The forces for global convergence in a labor system include: Merger of ICFTU and WCL. The IFCTU and WCL are merging to form a new global labor confederation that will enable workers join hands across borders in order to ensure internationally recognized labor laws, living wages, and even basic worker protection. This convergence will ensure reduced workplace disparities across borders. MNC desire for consistency and coordination. MNCs carry out their operations across borders and different countries have differing labor systems. Convergence of labor systems will enable MNCs enjoy consistency and coordination in labor laws and systems with their foreign subsidiaries. Increased monitoring of labor conditions. Convergence of labor systems across the globe will enable an increased monitoring of labor conditions that will ensure decent work for workers everywhere. Political and cultural shifts. Political and cultural shifts are key influencers of the labor market and convergence of the labor system across the globe will ensure stability in labor rights recognition. Divergent labor systems ensure that the management and workplace practices depend on the prevailing conditions and that labor practices adopt the local traditions. The forces for a labor system that is divergent include; Most MNCs still adapt practices to national traditions. This is to ensure the MNCs and their operations get accepted in the foreign countries that they operate. The role of political ideology, overall social structure, and history of industrial practices. This is because these factors differ across regions (Luthans & Doh, 2009). Question 2: How does one successfully select an expatriate? In selecting a person for an expatriate assignment, what are the three major global mind-set attributes that successful expatriates possess? Expatriates are people who live in a different country or region different from that of the upbringing. In order for one to successfully select an expatriate, there must be a consideration of a number of factors that act as success categories. These success factors include; Job factors. These include knowledge, diligence, and reliability, among other job factors. The successful expatriate should possess the desirable job factors for the assignment abroad. Relational dimensions. An expatriate is meant to work in a different country, whose culture and way of line is new to the expatriate. A successful expatriate should be able to easily relate with a wide range of people. Motivational state. An expatriate should be a highly motivated person so as to allow maximum performance on the abroad assignment. Family situation. The successful expatriate should have a family that supports the expatriate. Their families or spouses should support the venture and even initiate the pre-departure training. Language skills. The mission being performing duties in a new region and country, the successful candidate should have proper language skills that will enable the success of the mission. While selecting a person for an expatriate assignment, the successful expatriate should possess the following three major global mind-set attributes; Focus on knowledge creation/leadership development. When on assignment, the expatriate should be able to focus on knowledge creation and leadership development through learning ways of dealing with a wide range of people and becoming a leader in the new environment. Use assignees with high technical and cross-cultural skills. High technical and cross-cultural skills will enable assignees carry out assignment easily and reach the home organization target. Have a deliberate repatriation process. The repatriation process should be deliberate for the successful expatriate as it enables adjustment and full transition in the host country and they will able to perform duties diligently. Question 3: How do MNCs compensate expatriates? In order to fairly compensate the expatriates, what four components of a compensation package must be considered? Expatriates are usually highly marketable and may get better offers from other employees. For MNCs, the overseas compensation packages for expatriates are more attractive than home compensation packages. Opening a foreign office for an MNC may be a daunting task and compensating the expatriate adequately is one of the most essential tasks, often overlooked. Keeping the expatriate productive will require more than increased salary and wages. MNCs face a complex issue of reconciling parent-country and host country practices while managing expatriates.This can be costly and therefore, MNCs are looking for ways to cut the costs of the expatriate assignments. MNCs compensate expatriates by creating perceptions of equity and goodwill for the expatriates. They can also use the balance sheet approach or even tax equalization. In order to fairly compensate the expatriates, the following four components of a compensation package should be considered; Salary. The salary component of the compensation package for the expatriate should be based on the local buying power versus the home salary. The expatriate should not feel unappreciated at home and on assignment through salary. Taxes. Taxing system abroad are not the same as those at home and so this component should equalize any differential effects of taxes. The MNC may want to a tax equalization policy under which an expatriate pays no more less tax than when he or she were in the home country. Allowance. The allowances for the expatriate should include those that cover relocation expenses, housing and regular trips from home to abroad and vice versa. Benefits. This component should allow compensation for health insurance, both at home and abroad for the expatriate and his family. Other benefits should include property insurance in the host country, vehicle insurance and even stock options(Thomas, 2008). Question 4: The percentage of the workforce in trade unions in industrialized countries has declined. Most new union workers will come from emerging nations. How do trade unions in different countries work? What are the reasons and advantages for workers to join unions in emerging nations? Trade unions are organizations or labor unions formed by working classes and they bring people across many professions together to lobby for better wages, benefits and even rights. Trade unions may be industrial, conglomerate, craft, or even general unions and they work to promote the interests of their members. In each country, trade unions have legal definitions and set objectives through trade union acts. Therefore, trade unions must be understood within their given contextual environment. Levels of trade union density vary across different countries and in industrialized countries like the US and Europe, the union membership has been falling in recent years. Emerging nations are more likely to have increased new membership of workers in the trade unions. Trade unions have a legal mandate to maintain the viability of their activities through ensuring cooperation with management in promoting good industrial relations. In emerging nations, trade unions are important agents of socio-economic transformation as well as class struggle. Workers in emerging nations join trade unions for various reasons and to gain several advantages. These include; Greater bargaining power. In emerging countries, individual employees have very little bargaining power and if he is not satisfied terms of employment, he can leave the job. Trade unions are powerful tools that make employees accept the workers’ demands. Minimize discrimination. The decisions regarding workers’ pay and rights are highly dependent on nature and personal relationships in emerging nations. Trade unions minimize the effect of discrimination and favoritism. Security. In emerging countries, the largest employer of labor is the government. Trade unions in emerging countries help the workers against unpopular government policies like retrenchment of workers and refusal to honor wage increase agreement (Deresky, 2011). References Deresky, H. (2011). International management: Managing across borders and cultures (7th ed.). Upper Saddle River, NJ: Prentice hall. Luthans, F., & Doh, J. (2009). International management: Culture, strategy, and behavior (7th ed.). New York, NY: McGraw-Hill Irwin Thomas D. (2008). Cross-cultural management: Essential concepts (2nd ed). Los Angeles, CA: Sage, Inc Read More