HRM EXAM

Question 1

According to Perlmutter's (1968) staffing strategy, there are four primary ways multinational companies choose their supervisors. They can either have an ethnocentric approach (picking someone from their native country), a polycentric one (picking someone from the host country), a geocentric one (choosing one individual from across the globe), or a regiocentric one (picking someone from select regions. However, one important factor to consider for MNCs is the incorporation of expatriate policies in lieu of constantly evolving migrant populations. With increasing globalisation leading to rapid shifts in expatriate demographics, MNCs must take care to devise strategies that effectively capitalise on the abilities and skill set of a diverse labour force. This paper will evaluate how MNCs can frame strategies that better adapt to changes in workforce numbers. One primary consideration to be mindful of is the heterogeneity of labour. Since globalisation has meant migration patterns have become increasingly disparate and diverse, it is imperative that any changes to expatriate policies be inclusive of cultural and ethnic differences among workers. This would include the acknowledgement of such differences and how they may manifest in language barriers and other obstacles when workers embark on international assignments (Suutari and Brewster, 2000). Secondly, MNCs must be mindful of changes in the profiles of these migrant workers themselves. Historically, expatriates tended to form a homogenous group of Western individuals operating in foreign branches. However, with changes in migrant demographics, there has been an increase in demand for workers from developing economies and unconventional source countries. This is because MNCs operating in foreign markets can benefit from the personalised skills, values and cultural diversity these employees bring (Collings et al., 2010). A further caveat to consider is the rise of temporary and commuter work. With the ease technological developments have facilitated in recent years, more MNCs prefer to have workers involved in such adaptable and short-term work rather than operations which demand long term remotion. This trend has been critical in improving employee satisfaction, particularly for those that balk at the prospect of long-term and international assignments. It has also given MNCs more flexibility in changing their approach to accommodate changes in business trends and needs (Dickmann & Suutari, 2016).

Additionally, the best expatriate policies would involve the understanding on how shifts in migrant demographics impact talent management and succession planning. What this means is that MNCs must revise their existing frameworks on the recognition, mentoring and maintenance of the migrant workforce. One way to do this would be to provide multicultural and diverse opportunities for the training, career counseling and skill development of workers who hail from ethnically heterogeneous backgrounds. Having such frameworks in place can ensure they have equitable opportunities for advancing personally and professionally (Collings & Mellahi, 2009).

Lastly, MNCs need to modify their strategies to facilitate expatriates and their families in assimilating in the culture of the host country. There are multiple ways to achieve this to ensure that workers assigned to international operations are getting all their practical, physical and emotional needs sufficiently met. MNCs should make efforts to invest in programs that help expats learn local languages, familiarise themselves with local cultures and traditions and have easy access to healthcare, housing, education or any other primary needs (Harzing & Feely, 2008). However, none of these suggestions comes without limitations. It is easy to preempt that MNCs will receive opposition from expatriates who may not wish to assimilate, may feel threatened by local cultures or may feel their own cultures are being discriminated against by policies that aim at integration into host countries. Furthermore, there are logistical difficulties in analysing tax, immigration and other legal concerns. These must be navigated with scrutinous detail to planning and execution (Collings & Mellahi, 2009).

Question 2

Multinational corporations (MNCs) play a vital role in the economic development of their home and host country. However, it is important that the MNCs also comply with fair employment practices across its corporations. It is essential that the corporations implement fair employment practices as it will help them in improving their brand equity.

One of the ways it can do so is by adhering to the labour laws set by the International Labour Organisation (ILO). The laws set by the ILO cater to the basic needs and wants of employees regardless of region, demographics, etc (Standing, 2010). For instance, some of the laws state that organisations should not use child labour, should not enforce excessive working hours, and many more. MNCs can also enforce strict compliance with labour standards in their supply chain. The supply chain of MNCs varies from those of local organisations as they can have international suppliers, vendors, retailers, etc. So,

they need to make sure that the international stakeholders of the corporation are adhering to international labour standards. Regular audits and inspections can be conducted by the HR department to ensure that the labour standards are being enforced (Alston, 2004). MNCs can also abide by the host country’s labour laws and legislation to enforce fair employment practices. Multinational corporations operate in various countries hence, it is important that they are familiar with the local labour and employment laws. This will help them in promoting a fair and bias-free environment (Amao, 2008). Collaboration with local stakeholders is important to carry out this step. NGOs and local government bodies can assist MNCs in this task (Yin, 2021). They are familiar with the local workforce and can conduct on-site inspections, documentation, and other essential steps to ensure fair employment practices are implemented.

Additionally, Multinational corporations can also utilise corporate social responsibility (CSR) campaigns to promote fair employment practices (Filatotchev and Stahl, 2015). They can provide training and development programs for their workers, which would also include equal pay, and offer healthcare benefits to the local workforce. They can invest in the well-being of the employees as this benefit would last them lifelong. When employees are motivated and feel an important part of the company, their productivity and efficiency increases. ASOS, a fast fashion key player originatofster has implemented several CSR campaigns which are fostering fair employment practices and are also environmentally sustainable. It has partnered with Anti-Slavery International till 2025 to focus on ethical trade and abolish modern slavery across its supply chain (ASOS, 2023). The main aim of the collaboration is to tackle unfair employment practices such as child labour, modern slavery, and climate change. Another initiative they taken is circular design collection, which aims to comply by circular economy (ASOS, 2023). Fast fashion brands are known for causing pollution as they are mass designing economically affordable fashion clothing for the youth. The increasing demand for fashionable clothes causes them to work excessive hours, producing clothes drastically, leading to more waste in the environment.

The purpose of circular design collection is to ensure ASOS complies with environmentally sustainable practices and for ethical work practices.

However, it is not easy for MNCs to implement standard practices across the regions as they face several challenges such as cultural differences, economic pressure, and many more. The markets are fiercely competitive, so they need to ensure that they not only comply with international labour standards but are also able to improve their productivity and efficiency.

Question 6

As stated by Kandola and Fullerton (1994:8), the idea behind managing diversity is that workplaces have a mix of people with different backgrounds and characteristics. This includes things you can see, like gender and age, as well as things you can't see, like personality and how people like to work. The belief is that by embracing these differences, workplaces can become more productive and inclusive. Everyone feels appreciated, their skills are used well, and the organisation can achieve its goals effectively.

Diversity management means organisations take steps to include employees from various backgrounds by using specific policies and programs (Köllen, 2021). They do this because the workforce worldwide is becoming more diverse, so organisations are adapting to these changes by embracing diversity. Several factors are impacting diversity management and require organisations to evolve with it. Some of the factors include changing nature of work, increase in demographic diversity, and more.

Given the technical differences in cultural, socio-economic and legal factors across different countries, it is not easy for MNCs to implement a uniform approach to Human Resource Management (HRM) across all their foreign subsidiaries.

Cultural and ethnic diversity pose a significant barrier to MNCs policymaking. These differences in culture manifest as misunderstandings over norms and values, communication barriers attributing to differences in attitudes or conflicts over culturally expected behaviors. Hofstede, in his Cultural Dimensions Theory explains this using a simple model. Asian countries are more collectivist, while Western nations emphasize on individualism. Such differences, though subtle, when they interact with each other, can manifest in conflict over devising positive sanctions or evaluating worker performance. As a result, HRM practices cannot be made coherent. difference in western and non-western values of individualism and collectivism respectively. Such

Another challenge is the compliance of legal and administrative guidelines. Different countries vary significantly in their laws surrounding labor and employment regulations. As an example, Pakistan’s child labor laws stipulate that the minimum working age is 14, while the UK sets it at 16. MNCs must adhere to the host country’s legal standards. Similarly, laws pertaining to hiring and firing workers or worker safety can vary significantly across different countries. Consequently, MNCs must customize their HRM policies to be inclusive of these variations (Pohler, D. and Riddell, C., 2019). It is challenging to comply with such rules while also retaining some semblance of uniformity across HRM strategies in different subsidiaries; it consumes time, effort and requires expertise.

Moreover, HRM practices also have to be accommodating of differences in languages since communication barriers across employees can be grounds for miscommunication and conflict. Misunderstandings over policies, procedural requirements or performance standards are non-conducive to productive cooperation and team-building across employees. In such settings, MNCs may need to intervene by policies like training employees local languages or investing in multilingual staff members that can facilitate ease of conversation between groups. (Guillouët et al, 2021).

Differences in wages and extra-work perks across countries may also be a reason for discrepant equity between employees. When compensation packages are being determined, MNCs must take into account inflation, cost of living and tax brackets to ensure there is a significant change in real income alongside money income (Leung, K., Lin, X. and Lu, L., 2014). This will ensure that compensation is competitive in the local market, but also that within the organization, it is equitable and non-disparate for everyone.

The ability to navigate a culturally heterogeneous workforce across different countries requires leadership skilled in managing cosmopolitan settings. MNCs must have managers who can effectively steer across multiethnic backgrounds, further equitable and inclusive work conditions and foster healthy relationships and teamwork between culturally diverse employees. Nurturing such leaders will necessitate heavy investment in research, training and development. (Smith and Peterson, 2017). However, such efforts can help MNCs achieve a comparative advantage over their competitors, like the companies in North America believe. (Ozbilgin et al., 2015). Effectively managing an ethnically heterogeneous labor force is seen as key in maintaining a competitive advantage. This is evident in how MNCs like Pepsi, Coca Cola, Nike, Apple, and others are investing in HRM strategies that help them maintain this comparative advantage but also ensure internal fairness and equity in their workplace practices and environments.