Free Essay: Strategic Role in HRM in MNEs Now and in the Future Global Economy

Published: 2019-09-30
Free Essay: Strategic Role in HRM in MNEs Now and in the Future Global Economy
Type of paper:  Essay
Categories:  Globalization Management Human resources
Pages: 7
Wordcount: 1744 words
15 min read

Global multinational enterprises are companies that operate on a wide economic and global base. According to one Prof. John Dunning, a multinational enterprise can be defined as a corporation that undertakes foreign direct investment (Khanna, 2012). This is to say that these corporations control and own income accumulating assets in several countries. Subsequently, it produces services and goods out of its country of origin hence getting involved in the international production. Any business entity in which management, ownership, marketing, and production extend over several territorial borders is called a multinational enterprise. The world is made up of six continents with an estimated population of around 7 billion. Global multinational enterprises operate in virtually all these continents. MNEs provide products and services that cut across and satisfy needs of human beings hence operate in any country. The aforementioned is characterized with a large staff and customer base. Examples of well- known MNEs are Unilever, Wal-Mart, Barclays, Adidas, Oracle Corporation, Price Water House Coopers among others. On the other had Human Resource Management is the process of developing, implementing and evaluation of procedures and policies coupled with programs and methods that correlate to the individual in an enterprise. For this case, we are going to refer to the mentioned practices in multinational enterprises. Human resource management entails Human Resource planning, recruitment, selection, training, and development. In addition to that, it involves performance management, compensation, and employee development. Human resource practices of MNEs are facilitated by the teamwork of their employees spread worldwide. Effective human resource practices are linked to multinational performances by in-depth contribution to customer and employee satisfaction, productivity, innovation and the development of a favorable reputation of the enterprise in the industry. This essay will focus on the strategic role of Human Resource Management in Multinational enterprises currently and the expected future trends in the global economy. Furthermore, this essay will adopt a conceptual framework of global Human Resource practices in both developed and emerging markets that the subject operates in. An in-depth analysis of factors that influence human resource management will be looked into. Similarly, the essay will focus on the roles individual governments play in influencing human resource decisions in these multinational corporations. In addition to that, this essay will try defining the characteristics of Multinational enterprises and how has an effect on the strategic role in the Human Resource.

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Multinational enterprises have many characteristics that define them and their operations. These features play a huge role in determining the Human Resource practices that play out in this type of corporations. Multinational enterprises are characterized by their huge and enormous size in terms of financial capability, market share, and staff involved among others. Moreover, these huge corporations have a minimum of 100 million in sales turnovers (Khanna, 2012). They have also spread in vast countries hence the need for strategic human resource practices to cope up with the surge. In addition to that characteristic, multinational enterprises have an oligopolistic market structure hence they gain huge profits due to their dominance in the market. Then again, they are characterized by the collective transfer of resources. This is to mean that Multinational Corporations facilitates the transfer of resources in the form of machinery, equipment, technical know- how among others. The technical know-how in question involves the labor taskforce that is under the Human Resource department of these companies. Practically all MNEs have modern and up to speed technology that covers all aspects of logistics ranging from production to marketing. The last feature in question is the American economy dominance of large multinational corporations. MNEs such as Coca-Cola, Google, and Nike Incorporation are from the United States. The resultant effect of this is that top and middle-level management are usually of American citizens in virtually all their branches worldwide.

The Human Resource literature has been widespread in the provision of typologies of the strategic roles HR department plays in an organization. The aforesaid have majorly centered its focus on primarily the management and change of organizational culture, the strategic involvement of Human Resource department, the employer-employee relationship and transactional personnel administration. Due to the fast rising international and global environment, new roles and functions of HR departments in well operated multinational corporations are rising (Fey, 2000). This is based on varied Human Resource Strategies for globalization. The issue of globalization has sparked interesting speculation about a globalized economy. Separate national economies are sub-divided into companies and region states that follow the same set of principles of best practices. This leads to the adoption of convergent models for the organization hence leading to a process of deterioration of national management models and homogenization in behavior. The transfer of Human resource practices in multinational corporations organizational units is a procedure that involves covering of several stages. The latter originates from identification of knowledge all through to the actual process of transferring the knowledge to its final utilization in the receiving unit. With reference to Multinational enterprises, organizational departments and units are the other subsidiaries or headquarters of these enterprises. On the other hand, the receiving unit is the focal subsidiary. The transfer process has a channel it has to follow. It can occur not only from one subsidiary to another or from the headquarters to subsidiary but also from subsidiary to its main headquarters. The majority of literature on the transfer of MNEs Human Resource Management practices and policies adopt the notion that superior HRM/IR practices are an important actual or potential source for gaining comparative advantage for foreign invested enterprises over local and indigenous firms. With regards to the resource-based theory of the firm, scholars such as Taylor argued that Human Resource policies are only transferred only in the event that the parent companys resources in Human Resource Management areas can provide MNEs with a greater source of comparative advantage (Farndale & Paauwe, 2005). Similarly, the HRM practices ought to be critical to the successful operations of their subsidiaries. Multinational enterprises are tasked with deciding whether a set of Human Resource Management practices are transferred to their overseas subsidiaries. This is independent on whether these Human Resource management practices contribute positively to the successful operations in the home country or country of origin for that matter. If multinational enterprises are of the opinion that it is more profitable to leave subsidiaries to manufacture low value added activities and in turn view Human Resource management strategies as unimportant to profit maximization, a lot would happen. The transfer of home practices would be deemed not necessary. Multinational corporations may decide that the transfer of HRM policies might not be of great importance to the successful operations of subsidiaries in developing countries. The big question in this essay then comes. What is the strategic role of Human Resource management in these Multinational corporations? What role do they play currently? What are the possible future trends with regards to Human Resource management role in multinational corporations? Then again, is teamwork the key to successful HRM practices? The next chapter of this essay will answer these questions and seek to give illustrations where necessary.

The Human Resource Management in Multinational corporations involves divisions of normal HR functions in foreign countries coupled with the embracing of additional tasks that are precise to offshore day to day operations. Teamwork among team players is the key to success for all MNEs. Coordination of information amongst employees spread all over the world is key. Throughout the whole production process, a multinational corporation has to face, teamwork between all its departments is key. Teamwork involves the global coordination of activities by an MNE. Roles such as recruitment, planning, training, and development are coordinated from head offices to ensure MNEs recruit a competent workforce. The said workforce ought to be capable of embracing teamwork and providing quality expertise they were hired for. International human resource management functions incorporate varied activities relating to a businesss contractors and employees. Most importantly are the staffing needs of an organization whether staff members are contractors or employees of the multinational company. Moving forward, a key role undertaken by the human resource management is the task of recruiting employees and ensuring they are performing as required in line with the missions and visions of the company. A perfect example of how human resource management plays out is the case study of a multinational company such as Standard Chartered Bank. Standard Chartered operates in virtually all the nations across the globe. Standard Chartered, as a bank adopts human resource management policies and practices that cut across all its subsidiary branches. It is currently the leading emerging banks globally. It is characterized by the employment of more than 300,000 individuals in more than 50 offices spread across Asia Pacific region, Africa, United Kingdom, Middle East, South Asia and America. The Human resource planning is a process that involves anticipating and mapping out the consequences of an organizational strategy on an enterprise human resources. In turn, this is reflected in the planning and organizing of the competence and skill needs coupled with headcounts. Virtually all MNEs are mandated with forecasting and planning for the future requirements of its people. Standard Chartered as a multinational enterprise seeks to plan and forecast the volume of employees they would require in the bank. Consequentially, the human resource department works out what the possible ways of achieving the employee volumes required and when they are needed. Forecasting activities to be carried by a Standard Chartered includes likely changes to the work of the bank and workforce numbers in sufficient detail to be useful. In addition to that, it includes the impacts of budget and fund allocation and the workforce supply. In general forecasting is a strategic human resource management in multinational corporations. By forecasting, they are able to plan for the future of the organization since they have the tendency of setting up subsidiaries in new or existent markets across the globe. Moving forward, strategic human resource management role in the case of Standard Chartered involves the training and development. For all MNEs, development is critical to future success and smooth operations to business. MNEs performance is destined for improvement when employees are trained. Training is a perfect way that HR departments in multinational develop and invest in the future. For the case of Stan Bank, training is a partnership between the bank and its employees. The bank provides frameworks within which employees identify training and development needs. This cuts across all its subsidiary branches worldwide. The benefits of such Human Resource practices are that em...

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