EFFECTS OF CULTURES AND GOVERNMENT LAWS ON GLOBAL EXPATRIATE STAFFING STRATEGIES OF MULTI-NATIONAL ENTERPRISES
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Introduction
Multinational enterprises (Manes) are the engines of globalization and the key actors in international business. An MEN is defined as a firm with production and/or distribution facilities in two or more countries. (2001, pp.3,7). The Manes play a vital role in globalization through worldwide investments, global business transactions and exchange of skills and knowledge across national boundaries.
Since Manes conduct business in several countries through its headquarters and subsidiaries, its operation faces complex issues. Cultures, government laws, human resource management policies, politics are just some of the entities that Manes have to deal with in its operation and sustainability. According to Briscoe and Schuler (2004) government policy and the integration of cultures and values through the impact of global communication are two of the more specific drivers of globalization. These two factors also have their implications in many facets of MEN operation including its human resource management activities. (pp. 14-15).
Human Resource Management in Multi-National Enterprises
When businesses internationalize, human resource concerns, such as staffing, executive development, compensation, and labor relations require globally savvy International Human Resource Management professionals to facilitate international business success. Some internationalization concerns faced by an MEN include how to merge the cultures, languages, and general work expectations of employees from different countries, and how to respond to employees who bring to their new work situations sometimes very different attitudes toward supervision and have very different expectations related to the practice of management. The different communication and business practice styles, motivation philosophies, and organizational structures and frequent lack of understanding of the host-country cultures, markets, employment laws and practices, and language, by the parent company, can cause difficulty for the local human resource manager. (Briscoe and Schuler 2004, pp. 15,23-24).
Studies suggest that the host country’s legal, cultural, social, economic, and political environment are major external factors which have an impact on Manes’ approach to the management of labor. In doing so, it is suggested that despite the growing phenomenon of globalization and the international economy, the nation state continues to exert sovereignty over its people and territory. Manes are said to be faced with a “think global”, “act local” paradox. While multinationals are pursuing global expansion and integration, they are forced to be responsive to the demands in each area in the countries and regions within which they operate. Furthermore, types of government policies and the nature of legal and labor conditions influence Manes’ strategies and policies by either encouraging or impeding certain industrial relations practices. Examples of this are setting quotas in hiring and giving priority to certain nationalities. (Bandar nod.). According to (2001) many of the largest Manes have been observed to act within the parameters of regulations and rules set by governments and international organizations. (p.7).
Furthermore, many people working abroad lack knowledge or sensitivity to cultural differences which often results in mistakes during interactions on the job and privately. The cultural issue makes the interaction with people from other cultures a challenge for those working abroad. It is therefore important to learn about other cultures or at least understand and pay attention to the fact that there exist different cultures. (Tran and Wong 2006, p. 22). Learning languages is also very helpful. Manes need to learn to cope internationally with issues like selecting and preparing people for working and managing in other countries, negotiating and conducting business in foreign locales, and capitalizing on and absorbing that learning throughout their international operations. At the core of success in these endeavors is the need for cultural awareness and understanding of effects of culture on day-to-day business operations. (Briscoe and Schuler 2004, p. 115).
Maybe (2000) wrote that other societal institutions and characteristics, the legal system, and government policies, could also exert influences on Human Resource Management (HRM) strategies and their implementation. (p. 129). Many multinational firms dispatch expatriate managers and other senior staff to their subsidiaries in order to maintain their integration into a coherent whole. The ways in which multinational firms manage their expatriates, in terms of pre-assignment preparation, and post-assignment support, are different from one another. And there appears to be a home-country imprint on differences between companies in this regard, which may also have implications for their performance. (Maybe 2000, pp. 141,143-144).
Since expatriation is still a primary method of staffing in most multi-national enterprises, the expatriates need to be prepared. The most valuable preparation tool is training. However, training of expatriates takes on a whole new meaning in light of the diverse social, cultural and political environment involved. Briscoe and Schuler (2004) said that training for cross-cultural adjustment should focus on three things: to become aware that behaviors vary across cultures, different than what they are used to, and work at observing these differences quite carefully; to build a mental map of the new culture so they can understand why the local people value certain behaviors and ideas and how those behaviors and ideas may be appropriately reproduced; and to practice the behaviors they will need to be effective in their overseas assignments. (p. 280). There are also seven imperatives as key to global organizational learning and training and development. The seven imperatives are the following:
· Think and act globally – A global enterprise must think about and prepare for a presence in all the critical markets in the world, not just its home region.
· Become an equidistant global learning organization – Learning from all cultures anytime, in any manner possible, must be facilitated.
· Focus on the global system, not its parts - Development programs need to focus on breaking down the silos of departments and even the boundaries between countries and those that separate customers and suppliers and focus on the “big picture” of global organizational system.
· Develop global leadership skills – Global leadership requires competencies different from those needed in the domestic marketplace. These should be the focus of global training and development programs.
· Empower teams to create a global future – Multinational and cross-border teams should be increasingly used and empowered to perform critical organizational projects and problem-solving activities. In addition, multinational teams can be a major tool in the development of cross-cultural competencies.
· Make learning a core competence for the global organization – The global organization needs to become a global learning organization, where learning and development permeates all that the organization does; and
· Regularly reinvent yourself and the global organization – Constant self-development must become the cornerstone of strategies for success for both individuals and organizations in today’s highly competitive global economy. (p. 263).
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