Human Resources Management In Multinational Enterprises Business Essay

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Human resource management (HRM) in most multinational companies is put in place to only look after staffing issues, chairing of disciplinary issues HRM has a characteristic role to play in the business by helping the organisation attain its most crucial goals. Rowe.W.G and Wrigth.P.M (1997) state that Wright and McMahan (1992) defined HRM as' the pattem of planned human resource deployments and activities intended to enable an organization to achieve its goals.' HRM's function also includes important aspect like ensuring that the human capital which is the MNC's biggest asset is well managed and all matters that relates to employees are dealt with effectively. Some of the most important critical factors that HRM experience is: the wellness of employees, proper communication to all staff so that they understand the firm's vision and goals, how to performance management, learning and development. Using Sub Sahara Africa as an example, HRM must now take into account the epidemic of HIV/AIDS; in Sub Sahara Africa 22.5 million of the total population of approximately 874 million people have HIV/AIDS. HRM also have to consider how to compensate its employees, by ways of monetary value or promotions and industrial relations issues (IR).

Diversification is important in the HRM strategy, managers in human resources must know the anti-discriminatory laws, this is one of the first steps that an effective HRM should know as this would ensure that peoples colour, race and religion will not have a bad or negative effect on the employees and their ability to deliver on their job functions and to work together. Diversification will also assist the HRM in making the correct decisions as stated by (Doz.Y and Prahalad.C.K (1986) that demands are different from subsidiary to subsidiary within the same organisation, as many MNC's have subsidiaries across the world and now a lot in the developing world. Diversification brings in an assortment of challenges in the business. What type of people needs to be recruited and how does the HRM encourage unity amongst the employees. Do HRM drive the company's values so that these values are accepted by the staff or do they add the certain values from the staff into the company values? An example of the value that the organisation I am currently employed , that was taken from the staff is "People Centre" , this is where different cultural are integrated into the business values. Sumitomo Corporation a Japanese company expects all there staff to understand the Sumitomo Corporation values, known as "SC VALUES", which consists of nine values and the eight being on developing their staff. "Power/ Distance" from Hofstede (1980) cultural frame work play an important role , especially in countries like South Africa and India , where race and the cast system played a major role that these people suffered due to inequalities.

A strategic advantage in any business is to leverage of one another, just as ABSA, South Africa's largest bank did when it was bought out by Barclays UK. ABSA always wanted to expand into Africa and this happen when they were acquired by Barclays. The HRM in the organisation also leverage of others, in the ABSA case HRM used Barclays knowledge in human resources as they had the experience of dealing in South Africa. HRM is now leveraging of technology, such as the internet as the have to come up with new strategies to give their company's a competitive advantage, by mapping their staff, putting process in place, HRM have realised that the web enabled technology is one of the most important resources. By leveraging of the latest technology, HRM can automate their task, thus leading to cost saving and enabling the HRM to focus on developing the employees within the group or MNE. Leveraging of technology would enable the HRM to identify his excellent employees and retain their services which is an important function for HRM, as talent management has been identified by many MNC's. According to Denis Zenkin from the Russian Federation, HRM can leverage from the Intranet and he has come up with five ways for this to be done:

The intranet can be regarded as one of the staff members in HR.

The intranet can increase production, by using it as a time machine, where employees are taught of time management.

Giving employees' access onto the intranet would make it easier for HRM, this would allow employees to help with the organisations corporate culture.

The intranet would help new employees to adapt and assist them with what is happening in the organisation

It can be used as an internal social network for the staff.

HRM must consolidate cultures to have a positive impact on the organisation, especially when an organisation decides to venture out of its home country. Thereby allowing the company culture and the domestic culture to work as one. According to Marks.M.L and Mirvis.P.H (2011) if HRM is not managing cross - cultural matters effective, it could lead to financial and strategic issues within the organisation. They also state that HRM must be proactive, in putting culture on the agenda and their frame work is also based on change management. As stated in Halls (1983) cultural frame where he states "Monochronic and polychromic time" in western cultures, he states that the American are Monochronic and the French polychromic. And Trompenaar's (1193) cultural model on Individualism vs. Communitarianism", were rights is the fundamental issue to both the individual and the organisation. HRM have to consolidate this so that the outcome can be a win-win for both parties. In consolidation in the event of a merger will the HRM recruit internally or externally, as there are advantages and disadvantages to both? The advantage would be fresh and new ideas and the disadvantage would be the cost to recruit.

Leveraging, consolidation and diversification are the three pillars of most companies, whether the company is a multinational or a small medium enterprise these three pillars are of vital importance to the company. As stated previously the company's main asset is its staff, without them the organisation will not exist. By leveraging of its parent company the subsidiary in the developing nations can prosper through technology and learning new skills. Through consolidation both the employee and the business benefits , new ideas from staff , staff learning other cultures and the business respect individual cultures gets more productivity out from the staff. Diversification is a nightmare to most HRM due to its race issues, companies need to employee on an equal basis , but in some countries to like South Africa , where "Apartheid" was part of government policy , only the minority benefited, since 1994 South Africa implemented the Affirmative Action policy , give non-whites an opportunity to move up the corporate ladder. If HRM manages these three pillars effectively it would give the MNE the competitive advantage , more language spoken in the company , but with one business language being English.


Rowe.W.G and Wrigth.P.M (1997)2 Strategic Management Journal; RELATED AND UNRELATED DIVERSIFICATION AND THEIR EFFECT ON HUMAN RESOURCE MANAGEMENT CONTROLS. Vol. 18 Issue 4, p329-338, 10p.(Accessed 03/03/2013)

Doz.Y and Prahalad.C.K (1986) Human Resource Management, spring 1986, Vol. 25, Number 1, Pp. 55-71 ® 1986 by John Wiley & Sons, Inc. .(Accessed 03/03/2013)

Marks.M.L and Mirvis.P.H (2011 Human Resource Management, A FRAMEWORK FOR THE HUMAN

RESOURCES ROLE IN MANAGING CULTURE IN MERGERS AND ACQUISITIONS , Vol. 50, No. 6, Pp. 859- 877© 2011 Wiley Periodicals, Inc. Intranet By Denis Zenkin (@denis_zenkin) Nov 4, 2010. (Accessed 06/03/2013)