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Introduction The Analysis Machines (2004) defined Multinational Corporation as an enterprise operating in two or more countries with headquarters in one country. In today’s world, most of the businesses are getting globalized by setting up there business operations abroad. There are various forces which facilitates globalization like liberalization of international trade, international integration of production, Research and marketing by major MNC’s and emergence of economic regions like European Union enabled companies to invest overseas to gain and maintain competitive advantage. With an MNC having foreign subsidiaries comes the responsibility to transfer the organisational practices of the home country i.e. the headquarters to transfer its …show more content…
Bartlett and Ghoshal (1991) argued that human resource management policies and practices are becoming crucial because these practices can help in controlling international operations and co-ordination within subsidiaries and parent company. The ability to effectively transfer HRM practices that are proven efficient in the parent company to the overseas subsidiaries is a key characteristic of the successful MNC (Nohria and Ghoshal, 1997). HRM constitutes a major constraint when MNC’s implement global strategies due to the complex labour market and cross cultural environment in different countries of operation (Adler and Bartholomew, 1992). The effectiveness of human resource management can be seen as the key to success of MNC’s in the 21st century (Bartlett and Ghoshal, 1994, 1995; Pucik, …show more content…
and Bartholomew, S. (1992) "Managing globally competent people", The Executive, vol. 6, no. 3, pp. 52-65. Bartlett, C.A. and Ghoshal, S. (1991) "Global strategic management: impact on the new frontiers of strategy research", Strategic Management Journal, vol. 12, no. S1, pp. 5-16. Bartlett, C.A., Ghoshal, S., Birkinshaw, J.M., Marcus, J., Allaire, P., Welch, J. and Hardy, B. (1995) Transnational management, McGraw-Hill/Irwin. Björkman, I., Fey, C.F. and Park, H.J. (2007) "Institutional theory and MNC subsidiary HRM practices: evidence from a three-country study", Journal of International Business Studies, vol. 38, no. 3, pp. 430-446. Björkman, I. and Lervik, J.E. (2007) "Transferring HR practices within multinational corporations", Human Resource Management Journal, vol. 17, no. 4, pp. 320-335. Budhwar, P.S. and Sparrow, P.R. (2002) "An integrative framework for understanding cross-national human resource management practices", Human Resource Management Review, vol. 12, no. 3, pp. 377-403. Ferner, A. (1997) "Country of origin effects and HRM in multinational companies", Human Resource Management Journal, vol. 7, no. 1, pp.
While there are many various global issues that affect the International Human Resource Management to run efficiently, there are two key concepts that play a major role in understanding how to approach them with cohesive and a well coherent strategy; they are the International Human Recourse Management Strategy and Understanding the Cultural Environment. In the International Resource Management strategy, many companies will do their research in finding companies that offer the following:
Noe, Raymond A, et al. Human Resources Management: Gaining A Competitive Advantage. New York: McGraw-Hill, 2010.
With the proliferation of the internet international Business transactions are more common today than ever. Globalization is now a key factor when creating a business strategy for most companies whether they are small family own businesses or huge corporations. Globalization however does not just involve selling a product in other countries. There are legal and cultural concerns that must be addressed. The legal aspects are fairly simple because in most places the laws are spelled out. It's the local customs, and regional way of doing things that can be tricky. Research on globalization has shown that it is not an omnipotent, unidirectional force leveling everything in its path. Because a global culture does not exist, any search for it would be futile. It is more fruitful to instead focus on particular aspects of life that are indeed affected by the globalizing process. (1). In this new economy, as it has been in the past, it will be the people not the machines who will determine a company's success. Having an effective Human Resource Management team that effectively analyze your company's current and future personnel needs is key in any business organization.
Noe, Raymond A., John R. Hollenbeck, Barry Gerhart, and Patrick M. Wright. Human Resource Management: Gaining a Competitive Advantage. 7th ed. Boston: McGraw-Hill Irwin, 2010. Print.
Gilpin discussed the MNC’s evolution through the lenses of a number of business economic theories. Using Raymond Vernon’s Product Cycle Theory, the overseas expansion of American companies until the 1960s was shown as a means of preempting foreign competition and preserving monopoly positions, which was possible then because of the wealth and technology gaps that existed between the US and the rest of the world (282-83). Following the closing of such gaps, Dunning and the Reading School’s Eclectic Theory explained the next stage of the MNC’s evolution as propelled by the great leaps made in technology and communication, which made internationalized management both possible and viable (283). Michael Porter’s Strategy Theory, meanwhile, asserted that the MNC is now in the era of strategic management, wherein activities and capabilities spanning borders allow it to “tap into the value chain” in the most advantageous positions (285-85). Gilpin made an interesting point, however, that MNCs are oftentimes the result of market imperfections and unique corporate situations. In many instances, the decision to expand a firm’s operations in another country was a means of circumventing protectionist measures and trade barriers, or simply to curry favor with governments, as practiced by IBM (280...
Multinational enterprise (MNE) is “a company that is headquartered in one country but has operations in one or more other countries” (Rugman and Collinson 2012, p.38) that has at least one office in different countries but centralised home office. These offices coordinate global management in the context of international business. MNEs have increasingly essential influence on the development of the global economy and coordinate with other companies in different business environments. However, there are many issues involved with how MNEs operate well overseas, especially in emerging markets (EMs) (Cavusgil et al., 2013, p.5).
Ahlstrom, D., & Bruton, G. D. (2010). International Management: Strategy and Culture in the Emerging
...e located and the human resource management to effectively manage the global workforce diversity. Furthermore, management practices across nations should be more focused in terms of enhancing expatriates’ experience with cross-cultural training. It is also highlighted that executives of international firms must efficiently devise the best strategies and plans to increase the business positive performance and for controlling resources of their foreign subsidiaries. As a consequence, global managers play a very important role in the development and success of multinational corporations in the current competitive international market since there are numerous issues that they have to deal with in the operating process. If the enterprises could overcome the management challenges, they would gain great opportunities in the global economy and achieve favorable outcomes.
Torrington, D., Hall, L. and Taylor, S. (2008). Human Resource Management, 7th ed. Prentice Hall.
Human Resources Management (HRM) Interventions relates to the idea of improving an organizations overall performance and efficiency by improving the members (individuals and groups) performances, commitment, and flexibility. According to Beer et al. (1984), this is often a relevant intervention technique when organizations are facing increased international competition. They see the value of HR investments as a way to improve organizations competitive advantages. Further, they establish that HRM policies have long-term consequences and immediate organizational outcomes. These policies should include the overall competence of employees, the commitment of employees, the cost effectiveness of HRM practices,
15. Hill, Charles W.L. International Business: Competing in the Global Marketplace. New York : McGraw-Hill, 2007.
Modern society is dominated by multinational corporations. In the past 30 years there has been unprecedented development of transnational corporations (TNC), which is “any corporation that is registered and operates in more than one country at a time” (Transnational). Now, there are more than 63,000 TNCs, while there were only 7,000 in 1970. That is more than 900% growth in TNCs in only a few decades. Even more startling, 70% of all trade, includes at least one of these TNCs (Basic).
However the modern MNC, as it is known today, did not appear until the 19th century. These new entities provide a new level of inter-firm connectedness, a wider division of labor, and a higher level of product integration across countries in which MNCs are growing. Studies have shown that modern MNCs are characterized by a high degree of complexity, and have not followed a linear pattern in their development. In addition, it is crucial to understand the geographical context in which these MNCs were founded. This paper will analyze the development of the multinational corporation (MNC) from the 1870s to the modern day and examine in what ways, and to what degree, it has changed over time.
Firstly, multinational corporations are not something new in this 21st century. There are more and more international corporation as people try to boost the process of globalization. The development of these multinational corporations depends on the management of the owners. Transnational strategy is needed in order to operate such a big system of companies. Every nation in this system has to be managed thoroughly in order to help running the corporation, as well as to keep the system as one consistent body of business. Managers also find it important to look for opportunitie...
Stonehouse, G., Campbell, D., Hamill, J. & Purdie, T. (2004). Global and Transnational Business (2nd ed.). Chichester: John Wiley & Sons.