Local Government Test Questions Essay
One of the disadvantages of the ethnocentric staffing approach is that it can undermine productivity and encourage turnover due to limited promotion opportunities available to the host country nationals (Kopp, 1994). Additionally, host country nationals can become upset after comparing compensation packages with those of the parent country nationals. These sentiments can undermine working relationships and the exchange of valuable information (Dowling et al.
, 1999).When utilizing a polycentric staffing approach, a MNC considers each of its overseas ventures as a unique national entity that possesses autonomy in decision-making. The overseas ventures tend to be managed by host country nationals who rarely receive promotions to headquarters in the parent country. That is, a firm believing in this approach will decentralize its HRM functions on a country-by-country basis; coordination between overseas ventures will be minimal, and the individual locations will be responsible for developing their own personnel policies and guidelines (Dowling et al.
, 1999).As for advantages, first, the polycentric staffing approach employs more host country nationals (thus, removing many of the problems associated with the use of expatriates: language barriers, premature return, and costly business mistakes). Second, the use of home country nationals can placate local government officials concerned with local employment policies. Third, the employment of home country nationals is less costly than that of expatriates and provides for continuity in managerial succession.On the contrary disadvantages of the polycentric approach is situated on language barriers and cultural differences between the host and headquarters’ personnel, and conflicting national loyalties on the part of the host country staff (Dowling et al. , 1999).
Each of these potential problems can widen the gap between the international venture and the staff at the headquarters location. Another problem related to this approach is the limited career mobility for the host country national staff.Similarly, parent country staff may view themselves as having limited career mobility in that they may perceive overseas assignments in a negative light. Key Models In understanding the possible roles people will play in the IHRM of multinational firms, the Storey model of HRM is helpful in providing these basic beliefs and assumptions: 1.
) The human resource gives organizations a competitive edge, 2. )Employee commitment is more important than compliance, 3. ) Careful selection and development are central to HRM.According to the Marchington & Wilkinson (2005), the Storey model of HRM’s strategic aspects rely on HR decisions are of strategic importance, senior managers who must be involved in HRM, and HR policies well-integrated into the business strategy of a certain MNC. It also specifies line management roles that state that HR is too important to be left to personnel specialists alone.
That is why, line managers need to be closely involved as deliverers and drivers of HR and the management of managers is critically important.Thus, managing culture in organizations like MNC’s is more important than procedures and systems. Horizontal integration between different HR practices is essential and jobs need to be designed to allow devolved responsibility and empowerment among the MNC staff. Incidentally, Storey’s Model could be helpful in analyzing difficulties experienced in Case Study 2 of Pharmaco. In the anticipation of an imminent takeover by multinational firm, the managers’ inability to reassure employees about the future stability of the site was the failure to develop meaningful employee communication and involvement processes.The unions’ lack of power meant that the employees’ voices were not properly represented.
According to interviews of Phramaco employees, this undermined the credibility of their managers who had little influence over managerial decision because they did not recognize the importance of their involvement. There was also lack of formal mechanisms to good communications between employees involve unions at both site and local levels, and their line managers.With certain aspects lacking in Storey’s model is matched by Purcell’s model. This is the preferred managerial style that will act as a key determinant of the level of strategic integration of employee relations considerations.
To this end, two generic management styles in employee relations may be identified, namely individualism and collectivism (Purcell, 1987). High levels of collectivism are integral to the traditional pluralist model, considered characteristic of Irish employee relations (Brewster, 1994).However, looking at the broader literature, a pervasive theme is that firms locating at greenfield sites are likely to adopt an increasingly individualist focus in employee relations. Greenfield sites are defined as “locations where an organization establishes a new facility in a start up mode incorporating design of plant and recruitment of a new workforce”. Thus, this is probably applicable to the scenarios of the MNCs corporate expansion. It is further argued that increased individualism presents a significant challenge to collectivism, and, particularly, to trade unions (Gunnigle, 1995).
Thus, findings on the levels of collectivism and individualism are important indicators of change in employee relations. In particular, the literature suggests that employee relations styles which equate to what has been termed “soft” HRM are characterized by high levels of strategic integration and high levels of individualism. Drawing on such literature, it is possible to hypothesize that management styles in employee relations, which incorporate high levels of individualism will be positively associated with high levels of strategic integration employee relations.In addition, outcomes in this model are affected by three levels of strategic decision making which impact on one another and are constrained by external environmental forces.
Policies on long-run goals and the scope of activities are termed “first-order” decisions. These directly affect the formulation of what is termed “second-order” strategic decisions, that is, decisions relating to the way the organization is structured to achieve its goals (levels of authority, control systems, profit centers, etc. ).Both first-order and second-order decisions provide the context within which decisions relating directly to human resource management are taken. These are termed third-order strategic decisions. Purcell suggests that what actually happens in employee relations will be determined by decisions at all three levels and by the willingness and ability of local management to do what is intended in the context of specific environmental conditions and forces.
Thus, Purcell’s model does not assume that strategy, once formulated, will be implemented.In synthesis, it is deemed that these two models will complement each other as the Storey model of HRM allows the devolved responsibility and empowerment of employees, while Purcell’s model relates the collectivism within the organization as it suggests high levels of strategic integration of employee relations in the MNCs. Conclusion In view of the common difficulties that MNC’s encounter when they choose to globalize, it is important to reestablish the importance of integrating strategic HRM structures, processes, policies, and policy effects across nations.Accordingly, there is a strong need to improve our understanding of the approaches that MNCs utilize to satisfy the competing needs for integration and differentiation in their operations. Improving MNCs’ ability to manage cultural interactions enhances the prospects of satisfying both needs of their corporation and their employees. It is helpful to remember that human resource practices change as the strategy of the organization changes, and strategic changes themselves are being orchestrated more frequently by human resources in response to external change (Duening, 1997).
To survive effectively, MNCs require a reasonable amount of predictability and order, that’s why they strive for standardization of their operations among subsidiaries. Thus, in developing new development human resource strategies, it is significant to consider not only the economics of globalization, but also the internal and external factors that affect MNCs’ culture in their pursuit to achieve their need to expand.The key ingredients for improvement are good leadership, effective communication, healthy learning environment, ownership, reward and recognition, all of which are basically imbued in basic human resource development strategies.BibliographyBaliga, B. R. ; Jaeger, A.
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