Two important factors in the statement are globalisation and culture. According to there are various definitions to culture. The authors mention of Hofstedes (1980) framework when Hofstede's definition distinguishes people from one group to another, Hanners (1992) argument is on shared values and (Hermans and Kempen-1998) noted cultural knowledge as is note the same between subgroups. After taking into account the perspectives, the authors view culture as a set of tools that comprises of symbols and technologies and they recognise the difficulty in observing culture. Globalization on the other hand has brought countries and in some instances culture together. This is done by expanding political and economic correlations across the globe. Foreign direct investment (FDI) from multinational companies (FDI) from MNC's who are now setting operations in developing countries and not just purchasing resources from them are now offering services and various products through these operations.
Effective management is one of the most important factors when managing a culturally diverse workforce in an MNC. As stated by the authors (Merz, M.A, He.Y and Alden.D.L - 2008) , in the journal they mention that research by Holt et al (2004) and the view on how countries are integrated into the world economy and how it encouraged labour and workforces to be mobile and tourism across borders. Effective management in a multicultural environment will give the manager an insight to a potential job candidate. Taylor. S (2007) states that international human resource management (IHRM) is regarded as an important factor in an MNC, as this would help the company to implement its strategy successfully. The authors also mention that (Ellis 2000) has clarified that social networks in MNC's have benefited and gained knowledge on opportunities in foreign markets. With the knowledge gained, a manager can identify people different needs through localization which is an adaption of a product to another culture or language (making a product easier to understand in a different market).
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Most MNC's sent expatriates abroad to take control of their subsidiaries according to (Mead.R & Andrews.T.G), the expatriates occupy positions as CEO's or financial directors. For expatriates to be successful abroad MNC's invest in social capital, where the manager are trained and developed so that they the can understand the local cultures that they will be working with. Social capital is a fundamental factor according to (Taylor. S 2007), it fosters the enthusiasm and competence of the employees to participate in knowledge sharing and this places new demands on the functions of IHRM. There are many matters that IHRM has to deal with when MNC's send expatriates on international assignments, as managers will take time to adapt to the new environment and MNC's want the new heads to adapt quick in the new business environment so that they do not lose on market share. There are problems as stated by (Mead.R & Andrews.T.G), these failures are identified as the perception of cultural difference, where managers from one culture find it difficult to adapt to another. The authors (Mead.R & Andrews.T.G), also state that with training, an expatriate will operate successfully. Social capital invested in a business is a critical factor in any company that operates in the both the global and local markets. The organisation I am currently employed invest in social matters as they want the business to be successful. As stated previously, South Africa is only twenty years in democracy and is regarded as one off the most diverse national in the world with eleven official languages and many different race and ethnic groups with each having its own values. In order for me to be successful in my current role and for the business to be profitable and gain market share, the organisation have to invest in me to deliver the company strategic goals.
As brands are now global, they have to cater for foreign market needs, e.g. Macdonald's, BMW, Unilever, etc. these MNC's have adapted to the market and by do that , IHRM plays a major role by training expatriate so that the can adapt to the new work environment and be successful. The brand manager's mission is to work efficiently and effectively with the local market which include all stakeholders (suppliers, staff), clients and should be able to understand local cultures.
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An example used by (Merz, M.A, He.Y and Alden.D.L - 2008) in the journal, based on Macdonald understands of the different markets and delivered according to local cultural needs. In India the supplier vegetarian meals, no beef as most Hindu's do not eat it and in Turkey spicy burgers are sold compared to that of USA. Social capital is an important investment for any corporate to be successful for both local and international markets and for managers to be effective. According to Taylor. S (2007) there are three dimensions in social capital which is structural , relational and cognitive , each aspect of this helps MNC to gain knowledge through networking, trust is being built between employees and sharing of norm. These three dimensions bring the staff of the company together and give them a common vision of the company.
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