The Challenges of Developing a Multi-National Enterprise

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The current business encourages the firms to be in a Multinational or International standards due to globalization. The multinational or international firms are which manages its production or delivers its service in more than one country. Developing an MNE is increasingly challenging and to large degree competitive. It presents mostly new and complex peoples and organization issues, such as cross-border negotiation, cultural sensitivities, co-ordination. MNE's also need control across national boundaries and time zones, cross- border and cross-cultural teamwork and global learning and integration. So when the business is in international standards its HRM will be forced to be in international standards, as the firm has to manage its employees from different countries and culture that is International HRM. When there are many countries and cultures and variety of international cross activities, as well as the use of cross-border terms and task forces continue to increase, the most important IHR has become in helping firms make sure that globalization works.

International Human Resource Management is the process of procuring, motivating, retaining and effectively utilizing the service of people/ human resource both at the corporate office and its foreign plants. IHRM consist of three dimensions. They are human resource activities, type of employees and countries of operation. Human resource managers in global organization are required to achieve two conflicting strategic objectives. First one is to integrate human resource policies and practices across a number of subsidiaries in different countries and second is to make HRM practices sufficiently to accommodate different business and cultural differences.

 The objectives of global HRM as follows:

Create a local appeal without compromising upon the global identity.

Generating awareness of cross cultural sensitivities among managers globally and hiring of staff across geographic boundaries.

Training upon cultures and sensitivities of the host country.


In today's complex global business environment, MNEs need to pay increasing attention to more than the development of internal operations research and development, sales forces and accounting system to achieve the desirable results. Increasingly, top-level attention should be give to the human aspects of cross-border business, to the merger of global workforces and cultures in acquisitions, joint ventures and alliances, and for the development of the individual employees, who represent multiple corporate and national cultures, speak multiple languages, and have widely varying perspective on customer, product and business issues. It is duty of IHR to provide these capabilities and advise the rest of the enterprise on how to ensure performance in this cross-border complexity. MNEs must give importance on the difficulties encountered in the development of IHRM systems that deal with Global human resource problems, such as global pension, and health care systems, management development throughout the global enterprise, global employee and management recruiting, global compensation system, etc.

IHRM derived functions which enriches the firms are as follows

1. IHRM explicitly meets its Plan and Objective

2. It has a basic structure, organizations and operations which help the services of the strategic needs and interests to the business

3. It helps to satisfies the customers within the industry

4. The activities help the employees to understand themselves and to be shared

5. It is very much flexible and adjustable to the new condition of the industry

6. It can rate the efficiency of the activities taking place in the industry

7. It helps the firm to get good staffs who all are competent, adaptive and flexible

8. It helps to get a global literary coaching and develop among themselves

9. It helps to get a cross - national adoptions

10. It can change diversity management and increase the international team skill

11. It can implement the formal system to improve a international view of communication

12. It helps to study more about multiple cultures

14. It gives more input to the working environment


Each cultural world has its own internal dynamics, its own principles and its own laws written and unwritten. Each culture has even unique time and culture. However, there are some common threads that run through all these cultures. Due to globalization it has now become imperative to create a organizational culture. Culture is a belief based on country, values and norms of social group shared by its members and different from social group. Therefore it is upto the International view of the HR professionals to construct the country specific and organizational specific culture; otherwise it will effect management the entire international operation of the organization.

The IHRM professionals should create an organizational culture which gives value and respect for all the culture of the employees working in their organization (MNC). The HR should be viewed in an international aspect to avoid the culture clash and language problem as the organisation consist of employees from different country having different culture and language.


When the organization has its branches worldwide the employees will be working and selected from different countries. It has to be done by the IHRM professionals to select the right person at the right time. Staffing is a major activity dealt by IHRM.

The parent country nationals are send abroad to ensure that the policies and procedures of the home office are carried out in foreign operations. They are known as expatriates. It comes under the HRM to motivate the expatriate to take up the foreign assignment, to train them and arrange the facility for the expatriate and his family (if they are accompanying them). However, due to the prohibitive cost and career issues, MNC's are now increasingly turning to third country and host country nationals to satisfy their staffing needs.


When the MNC have their subsidiary, they have to follow the law, rules and regulation at that country. The ways in which a country's legal system can influence human resource management are by legislative bodies and government degrees, such as UK minimum wages regulation. Some countries have detailed rules and laws cover everything from permission and license to operate, choice of location, and social responsibility to specific internal organization activities. They are health and safety, maternity and paternal leave, statutory minimum wage, physical working condition, protection of employees against dust and noise pollution, pension and medical provision are examples of workplace activities which are governed by laws and regulations in many countries.

The laws regulating human resource management practices are mostly tied in with other government policies and programs, especially in some developing countries.

So the HRM must have an international view to get into each of the countries laws, rules and regulations and act accordingly.


The current business environment encourages the HRM to have an international view, as the business or the organizations have extended its wings to different countries. International HRM ensures that different parts of the organization functions smoothly and effectively. It is upto the International Human Resource Management to hold the organization that is scattered worldwide together as one.


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