Pattern of Multinational Corporation based on cultural difference Essay Example

collaborate effectively (Bond, 2003). To effectively manage people in China, foreign executives need a comprehensive understanding and awareness of typical Chinese civilization. By learning about the culture and behavior of Chinese employees, companies can establish a stable and efficient HRM method in the long term.

However, foreign executives may encounter difficulties with certain aspects of Chinese culture such as "face" and "guanxi" when managing employees. Furthermore, the lack of mature HRM knowledge in China presents a challenge for foreign directors since there is no established HRM policy or practice in Chinese companies. This makes it challenging for them to implement their preferred approach in joint ventures.Human resource management (HRM) is a function within an organization that focuses on employee-related activities. HRM encompasses various aspects related to people, including hiring procedures, employee development, compensation, health, motivation, performance management, safety, training, communication, and benefits. It is both an academic theory and a business practice.

The goal of HRM is to effectively utilize human resources to meet organizational goals. Professionals in this field handle areas such as employee recruitment, performance evaluation, compensation and benefits, professional growth, safety and health, forecasting, and labor relations.

It is believed that effectively utilizing human resources is crucial for a business's success as it allows for the efficient use of expertise and creativity to fulfill the organization's objectives. HRM aims to employ capable employees who are flexible and dedicated.

However,Bach (2005) argues that HRM prioritizes individual employees over other stakeholders while marginalizing their involvement in external and corporate issues. Current challenges in HRM include managing a diverse workforce, adapting to technological changes complying with governmental regulations handling corporate restructuring downsizing ,and developing essential personnel management strategiesIt is

commonly believed that human resources are the key asset in achieving business success, leading organizations to adopt a strategic approach to their management. The value of HRM is increasingly recognized as it encompasses all aspects of people management and development within a company. Therefore, HR professionals must acquire country-specific knowledge and skills since the context may significantly differ from their home country.

On an individual level, HR managers hold significant responsibilities towards their employees. In a foreign state, the director should be knowledgeable about local patterns and traditions. Peripheral benefits provided by the company might need adjustment according to the host state's standards. It is essential for the HR director to possess relevant qualifications and experience in order to effectively handle these duties and responsibilities.

While knowledge and experience are important for managerial tasks, they may not be mandatory for HR staff members who can gain valuable information and knowledge through their work. However, expertise in the field is necessary for someone holding the position of an HR director.

HRM should never be underestimated as efficient management plays a crucial role, especially in foreign settings with diverse societal, cultural, political, economic, and ethical differences.The involvement of human resource management (HRM) in a company goes beyond functional responsibilities and requires active participation in HR practices on a daily basis. This role is not limited to just a department, but also includes the company's head, such as the director ("Human Resource Management," 2007). We take a comprehensive approach that considers both the country's environment and the strategies of multinational corporations (MNCs) when analyzing HR practices. It is argued that within MNCs, HRM plays a vital role in balancing local and

global forces. In helping MNCs address local differences and implement practices necessary for their global strategy, HR is crucial. One specific area where HR plays an important role is in developing social capital, which can serve as an alternative to formal control measures. Our main contribution focuses on outlining how this new responsibility of developing human capital gives HR the task of filtering mission-critical practices through a "localization mesh" to ensure success.In addition to its informal role in coordinating and integrating activities within multinational corporations (MNCs), social capital is significant. We propose strategies for fostering social capital by considering Latin American pan-regional cultural values. International Human Resource Management (IHRM) encompasses the management of people in an international setting, combining elements of HRM and international management. IHRM provides a more comprehensive understanding of traditional HRM. However, certain expatriate HR policies, particularly regarding compensation, still favor expatriates over local staff and do not take into account the qualifications and aspirations of local employees. This unequal treatment leads to low commitment and subpar performance among local staff while also creating tension between local and expatriate employees. The lack of support from local employees makes it challenging for expatriates to adapt to their new roles and environment, ultimately contributing to their failure. Transnational companies must be aware of the unintended negative effects that certain HR practices can have on local employees as well as the repercussions of disregarding these impacts. Neglecting these effects can undermine organizational effectiveness and hinder the success of international assignments. Briscoe and Schuler (2004) argue that addressing international human resource management is increasingly necessary due to business' global nature and HR's pivotal role in overall

success.
The process of international HR management is influenced by trends such as globalization and modernization. Globalization has made it possible for businesses to operate across national boundaries, while modernization has improved the speed and convenience of business activities. Budhwar and Debrah (2001) have identified factors that contribute to the increased demand for HR management by organizations. Experts believe that human resource management is becoming more important due to globalization and the internationalization of business. This can be seen through the emergence of new markets in Africa, Eastern Europe, China, India, Southeast Asia, and Latin America, as well as the formation of international business alliances like NAFTA, the European Union, and ASEAN. In addition, there is heightened competition among companies on both national and international levels. Therefore, it is crucial to understand how managers in different parts of the world handle HR management issues. The purpose of this study is to gain a clearer understanding of why multinational companies (MNCs) send employees abroad. The study identifies three organizational functions of international transfers: filling positions, management development, and coordination and control.
The text highlights that the importance of various functions within multinational corporations (MNCs) can vary based on factors such as the home country, host region, and cultural differences. This is supported by empirical research involving 212 MNC subsidiaries from nine different home countries located in 22 host countries. For example, filling positions is considered most important for subsidiaries of US and British MNCs, as well as in Latin American and Far Eastern regions.

Furthermore, the text argues that these differences between countries have a significant impact on expatriate management. It emphasizes that management development for employees of German,

Swiss, and Dutch multinational corporations is particularly important and more prevalent in Anglo-Saxon countries compared to the Far East.

The presence of multinational corporations and enterprises underscores the increasing significance of human resource management due to internationalization. However, venturing into the international arena also brings about more challenges and issues that need to be resolved. Globalization presents difficulties for both managers and administrations in terms of human resource management.

Clark et al.(1999) support this argument by highlighting three key challenges faced by international HRM: marginality, parochialism, and ethnocentrism. As organizations seek to operate in foreign markets, managing international human resources becomes an increasingly challenging task.Developing a better understanding and sensitivity towards the impact of different national settings on management tasks is crucial. The importance of human resource management (HRM) in business organizations, especially major ones, cannot be underestimated. HRM serves as an organizational function that helps achieve company goals and ensures effective business operations. It recognizes that employees are the greatest assets of the organization and without them, companies would struggle with everyday tasks such as managing cash flow, dealing with customers, communication, and conducting business transactions. HRM maximizes productivity by optimizing employee effectiveness. Despite the ever-changing pace of the business world, the significance of HRM is unlikely to undergo any significant changes. According to the Encyclopedia of Small Business (2002), human resources' fundamental role is to acquire, develop, and retain talent while aligning the workforce with the business and contributing excellently to the company. Additionally, multinational and domestic organizations view managing international employees as a crucial aspect in today's evolving business landscape.There has been a significant shift in global thinking and actions by organizations, emphasizing the

importance of human resource management in remaining innovative in competitive markets that may be disrupted by new entrants. To address the need for improved financial, temporal, and functional flexibility, initiatives are introduced to achieve cost improvements. This also results in companies wanting to change their employees and their level of engagement (Brewster, Harris, and Sparrow, 2004). Human resource management now plays a crucial role in expressing the true value of employees within businesses. The recognition that human resources are essential assets in achieving and sustaining business success has led to the development of strategic human resource management (HRM), where organizations adopt a strategic approach to managing their people. This strategic HRM has become increasingly influential in corporate strategy. According to Bromley, management development is defined as a conscious and systematic process of controlling the development of managerial resources for achieving goals and strategies. Traditional workforce planning and succession planning are more critical than ever in a fast-paced environment. The concept of HRM originated in the US during the 1980s when American companies were experiencing substantial growth, leading to the emergence of Strategic HRM models.Strategic HRM focuses on workforce planning and effective management of people, recognizing them as a competitive advantage. It is a strategic way to develop, motivate, and utilize the potential of individuals and external resources. With a globalized workforce and increased mobility, organizations must work with people from different cultures, customs, values, beliefs, and practices. This article outlines factors that HR directors and company leadership need to consider in creating global people policies that reflect the organization's shared culture while adapting to local realities and business needs. The author's consulting work with multinational

companies provides case studies illustrating specific challenges faced by these firms and broader trends all global companies must understand and manage. As multinational corporations become more important to the world economy, attracting and retaining executives who can navigate unfamiliar political, economic, and sociocultural systems is crucial for success.The multinational executive's job requires a compensation system that considers various factors. After conducting a literature review and consulting experts, 13 unique factors were identified as significant to the job of transnational executives. These factors include the size of the company, number of expatriates abroad, industry characteristics, inflation rate, cost of living, cultural differences, currency fluctuations, purchasing power parity, communication system challenges, executive's mobility, key strategic and financial responsibilities, exposure to different legal systems, and working under varying political systems. Questionnaires were used to gather opinions from international line executives and human resource management executives regarding incorporating these factors into executive compensation plans. The responses were analyzed to identify similarities and differences in opinions while documenting the reasons behind these differences. Statistical techniques were then utilized by the researcher to develop decision-making systems that incorporated both traditional and nontraditional variables from earlier research.
In the high technology market sector, customer satisfaction has become increasingly important in business management. This survey explores how cultural differences impact client satisfaction on a global scale.The text analyzes client satisfaction levels in different countries to determine if there are differences in satisfaction scores provided by Help Desks. The survey used a sample of over 11,579 reports from three major international companies in the technology and healthcare industries. The statistical results, with a 5% confidence level, show that US and Thailand clients perceive Help Desk

support differently. These findings emphasize the importance for companies to understand these differences in order to optimize their resources and customize their services to meet various customer demands and expectations.

Despite research challenging the idea of globally integrated networks within multinational companies, professional service firms (PSFs) have been overlooked as exemplars of this model. This article focuses on PSFs and how they organize the horizontal flow of human resources to share knowledge between units. The goal is to examine the impact of individual factors on HRM knowledge transfer in Chinese employees of multinational corporations and explore the relationships between these factors and integrated capability with joint effect concept.Cindyi??2008i?‰ conducted a study on the impact of cultural difference and adaptability, language and communication, working relationship, and motivation and willingness on the transfer of HRM knowledge. Interviews were conducted from January to April 2004, and Nvivo software was used for exploratory data analysis. The study found that Chinese HR managers possess all four factors necessary for facilitating the transfer of HRM knowledge. The findings also suggest that these four factors can collectively impact the transfer process through integrated capability with joint effect. Positive capability enhances the transfer, while negative capability hinders it. This research expands understanding of both individual factors' impact on KT and their interrelationship as well as their combined effect referred to as integrated capability and the transfer process. Previous research primarily focused on analyzing individual factors' impact on KT and knowledge management in general with minimal investigation into correlations between these individual factors. To address this gap, this study introduces the concept of joint effect and integrated capability. Cross-cultural human resource management involves managing staff

from different cultural backgrounds within an organization while addressing cross-cultural differences.The company or enterprise in cross-cultural HRM involves partnerships or collaborations between two countries or multinational corporations in the host country. This includes the government and international business management, making cultural factors have a comprehensive influence on multinational enterprises. Our research will utilize both qualitative and quantitative research methods. The descriptive approach of qualitative research focuses on gathering data from various sources, which may vary based on the source or respondent. On the other hand, quantitative research methods are beneficial when aiming to reach specific points or deduce particular information from gathered data. We aim to combine both methods for a comprehensive analysis.

To analyze the data, we will use statistical agencies while also employing descriptive evaluation to gain insights into companies' cultural adaptability in foreign markets and human resource management issues. The semi-structured interview is an important approach for this research as it provides objective information and helps us understand related problems and phenomena better. Interviews allow for more in-depth exploration and can address complex hypotheses while facilitating appropriate respondent selection.In order to explore the underlying concepts of related problems, interviews will be conducted with both foreign managers and Chinese employees. Comparing perspectives from both sides will enhance the depth and objectivity of the research (Alderman 2009). Additionally, the Chinese employees' perspective on their foreign directors' methods can be examined through these interviews, facilitating further analysis. The interviews will involve a structured questionnaire and free talk to collect essential data for analysis and gather new ideas from interviewees. Furthermore, specific HRM practices such as recruitment, performance management, training, and retention can be explained in detail

through these interviews. These insights are crucial for addressing HRM issues in this research. A qualitative analysis can be conducted by combining the interview data with a review of relevant literature. Email contact is another effective approach to gather information by reaching out to key individuals within the organization. This method proves useful due to its ease and cost-effectiveness in operation. As the research progresses, obtaining new information via email may become necessary to support analysis at different stages of the research. Therefore, email contact facilitates effective information gathering in such situations where telephone interviews may not be suitable due to cultural differences and varying perspectives on behaviorHowever, contacting a senior manager responsible for HRM in the entire group via email could offer insights into managing Chinese employees in the subsidiary. This would contribute to a more comprehensive analysis of the topic. Furthermore, email communication can effectively validate information gathered from interviews by tailoring different questions to each recipient's position and role within the company.

Comparative research aims to uncover differences and similarities between cultures and determine which theories apply universally and which are specific to certain cultural backgrounds. This approach acknowledges that there may not be a universal common culture but recognizes that similarities can exist across different cultures. Most experts and scholars have adopted the method of comparing research on cross-cultural management issues.

In a cross-cultural environment, it is essential to identify the differences between various cultures before making comparisons. For this study's data collection design, the main idea is to compare relevant literature with empirical experiences obtained through communication with employees involved in the case study. This will provide a deeper understanding of perspectives

described in literature and allow for a more comprehensive investigation through comparative literature reviews.

The research design will primarily consist of conducting a case study at a multinational manufacturing company in China.Before conducting a comparative literature review, it is important to invest time and effort in developing research ideas and concepts. This includes familiarizing oneself with existing literature, as the quality and success of research often depend on this (Congdon and Dunham, 1999). With my extensive experience and strong connections within the company, I can easily gain entry and obtain the necessary information for this research.