...A critical analysis whether MNCs will ever be able to have unified company- wide HRM strategies, policies and practices With the birth and growth of globalization, multinational companies came into existence and all the internal and external forces that pressure the companies have pushed the management and businesses practices into new heights. MNC’s have two distinctive characteristics which distinguish it from domestic organizations. That is, the presence of multicultural workforce or multiculturalism and geographic dispersion of the business units. Since the term “strategy” became a vital term in human resource, human resource department has changed from a simple functional department into a strategic department of the business. And the employees are now considered as knowledge capital. All these changes took place due to globalization as the associated advancements. The most pressing issue faced by the HR specialist is, could the MNC’s ever have a unified set of company- wide strategies , policies and practices . In the MNCs, though the company name is same in all regions, the people are different and so is there culture and behavior. Hence the way to treat them or manage them has to be different. In other words, managing the HR in the subsidiaries of the MNC is different. There are both internal and external factors of the subsidiary companies that would hinder the unified set of strategies, policies and practices. The way how people are managed is affected by...
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... | | | Glossary HCN: Host Country Nationalsg MNC: Multi-national Company MNW: Multi-national Workforce Contents Page Introduction 4 Aims 4 Objectives 4 Leadership Challenges 5 Recommendations 15 Conclusion 16 Appendix 17 References 20 Introduction This report aims to discuss on the challenges faced by managers in leading a multi-national workforce (MNW). For MNC managers to achieve a well- balanced fluidity of leadership, communication, structural, strategic and cultural changes should always be reviewed (Reichwald et al 2005). Leaders of MNCs can have problems in meeting the needs of specific markets and can easily encounter conflicts when endeavouring to achieve effectiveness and efficiency (Martinez et al 1999). Due to political, cultural and geographic barriers, coordinating multinational workforce (MNW) can be a challenge for MNC managers (Cavusgil and Cavusgil 2011). Through implementing change, new procedures, creating new ideas and new policies MNC leaders become successful to the MNW (Darling 1999). MNC managers have a responsibility in influencing direction, opinion, action and course hence taking responsibilities (Oertig and Buergi 2006). 2.0 Aims The aim of this report is to highlight the challenge that leaders of MNC face in managing MNW. 3.0 Objectives The objectives of...
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...by a corporation in one country (the home country) but with subsidiaries in the foreign markets (the host countries) (Agarwal, 2009).A perfect example for FDIs is Multinational Corporations (MNCs) which have their parent company located in their home country but with subsidiaries in foreign markets. In most cases, FDIs are operated through joint ventures, franchises or mergers where the parent company of the MNC acquires other businesses in overseas markets (Chaurasia, 2008). The objective of this assignment, therefore, is to discuss and explain further the operations of MNCs and issues surrounding these corporations. Hedging Transaction Exposure Four of the Hedging Techniques Available To MNCs Hedging simply means minimizing or mitigating the effect of the exchange rate exposure. This risk is of three types namely, translation exposure, economic exposure and transaction exposure (Luo, 2001). A transaction exposure is a form of foreign exchange risk which results to loss or gains when operations are carried out or denominated in foreign currency (Hill, 2005). It is a short-term exposure that arises as a result of fluctuations in exchange rates. To mitigate or hedge the effects of this risk, an MNC can use any of the following four techniques. When selecting the method to apply, MNCs compare the expected cash flow from each one of these. A).Futures Hedge- to lock in the future exchange rate, a futures hedge uses currency futures. For smaller amounts of money, standardized...
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...Strategy: Strategy is a method or plan by which long term objectives will be achieved. Long term objectives are the specific result that an organization seeks to achieve in pursuing its basic mission. Business strategies may involve geographic expansion, diversification, acquisition, product development, market penetration, retrenchment, divestiture, liquidation and joint ventures. Strategies are potential actions that require top management decision and large amount of farm’s resources. Additionally strategies affect an organization’s long term prosperity, typically for at least five years, and thus are future oriented. Strategies have multifunctional and multidivisional consequences and required consideration of both the external and internal factors facing the firm. Most Strategic Management Model There are several Strategic Models are available and used in different organizations but following are the most used strategic models: 1. PEST analysis 2. STEER Analysis 3. Five Forces Model 4. Strategic Group Map 5. SWOT analysis 6. Blue Ocean Strategies 7. Open innovation 8. McKinsey seven S model Company Detailed Profile including mission & vision and Organogram Company Detail Profile Square pharmaceutical is now the most leading company in Bangladesh since 1985 and is now on its way to becoming a high performance global player. Today it has achieved a state of mind among consumers. This company has founded in 1958 and...
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...Is Best Practice Dead? Abstract In the light of globalization, HRM becoming from being a mere support function to one of strategic importance and researchers have argued that HRM policies and practices are more significant because they can act as mechanisms for co-ordination and control of international operations. Meanwhile, “best practice” on HRM has been acknowledged to constitute a major constraint when MNCs try to implement global strategies, mainly because of the different cultural and institutional framework of each country in which the MNC operates. Some even argue that best practice is dead. This essay will examine that although best fit play an important role in the practice of strategic HR management, best practice is still valuable in the context of a multinational corporation (MNC). Introduction In the light of globalization, HRM is evolving from being a mere support function to one of strategic importance and researchers have argued that HRM policies and practices are more significant because they can act as mechanisms for co-ordination and control of international operations. Strategic Human Resource Management (SHRM) involves the development of a consistent, aligned collection of practices, strategies and policies to facilitate the achievement of the organization’ strategic objectives (Mello, 2002). The theory of SHRM does, actually, advocate two ways of linking HRM to strategy. The “best fit” approach is associated with the contingency approaches....
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...WHAT IS FOREIGN DIRECT INVESTMENT (FDI) Foreign Direct Investment (FDI) is the process whereby residents of one country (the source/home country) acquire ownership of assets for the purpose of controlling the production, distribution and other activities of a firm in another country (the host country) The International Monetary Fund (IMF) defines foreign direct investment (FDI) as a category of international investment where a resident in one economy (the direct investor) obtains a lasting interest in an enterprise resident in another economy (the direct investment enterprise). (IMF, 1993) * Two parts of this definition are important to note: 1. The “lasting interest” implies the existence of a long-term relationship between the direct investor and the direct investment enterprise, 2. The “direct investment” implies the acquisition of at least 10 percent of the ordinary shares or voting power of an enterprise abroad. * Foreign Direct Investor - an individual, an incorporated or unincorporated public or private enterprise, a government, a group of related individuals, or a group of related incorporated and/or unincorporated enterprises which has a direct investment enterprise – that is, a subsidiary, associate or branch – operating in a country other than the country or countries of residence of the foreign direct investor(s). Common Misconceptions of FDI. * FDI does not necessarily imply control of the enterprise since only a 10 percent ownership...
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... Standardization Key Term and Why I am Interested In It The key term I decided to extend my research on for this week is “Standardization”. After reading the required material for the International Business class, I have acquired a better conceptualization for the aspects and dimensions of doing business abroad. Consequently, I have desired to further my understandings on one of the important topics covered in Chapter 8 of the textbook (Satterlee, 2014) under the notion of global operation management process issues. Upon relying on the assorted scholarly journals and articles I am interested to develop explicit and superior information for the key term standardization. Hence, this will be by covering it’s definition, variables, factors, evolution in time and application...
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...percent a year since 1950, which is more than 50 percent faster than growth of output the most dramatic increase in globalization, has occurred in financial markets. In the global forex markets, billions of dollars are transacted each day, of which more than 90 percent represent financial transactions unrelated to trade or investment. Much of this activity takes place in the so-called Euromarkets, markets outside the country whose currency is used. This pervasive growth in market interpenetration makes it increasingly difficult for any country to avoid substantial external impacts on its economy. In particular massive capital flows can push exchange rates away from levels that accurately reflect competitive relationships among nations if national economic policies or performances diverse in short run. The rapid dissemination rate of new technologies speeds the pace at which countries must adjust to external events. Smaller, more open countries, long ago gave up illusion of domestic policy autonomy. But even the largest and most apparently self-contained economies, including the US, are now significantly affected by...
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...strategy indicates the general direction in which a firm plans to move to attain its goals. The strategies of any business organization, whether purely domestic or multinational, are determined by matching two key ingredients: core competencies and available opportunities. Internal factors relate to the identification of core competencies of a firm focusing on strengths and weaknesses with regard to the expertise available within the firm in the areas of technology, manufacturing, distribution, and logistics. 2. A strategy indicates the general direction in which a firm plans to move to attain its goals. The strategies of any business organization, whether purely domestic or multinational, are determined by matching two key ingredients: core competencies and available opportunities. The external factors relate to the identification of the opportunities available to the firm, the second key ingredient in formulating strategy. Identification of opportunities also includes the threats facing the firm in the areas of competitors, customers, suppliers, regulatory bodies, as well as socio-political circumstances. 3. Accounting provides the skills necessary to quantify in financial terms the factors that influence strategy formulation -- strengths, weaknesses, opportunities and threats --, and to develop projections of costs and benefits as financial expressions of strategy. Capital budgets are a prime example of the contribution accounting makes in strategy formulation. Further...
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...Chapter 1 -The global manager’s environment Sources of Risk for International Managers -Exogenous- General environmental factors, industry-related uncertainties and some firm-specific uncertainties. -Endogenous- Uncertainties that arise from within the firm, and include managerial perceptions, attitudes and organizational perspectives. -Top two exogenous risks facing business leaders and policy makers for 2012 and the next decade would be severe income disparity (The unequal distribution of household or individual income across the various participants in the economy) and chronic fiscal imbalances (situation where all of the future debt obligations of a government are different from the future income streams) -Other issues: natural disasters such as 2011 earthquake in Japan, flood in Thailand, Political uncertainty in China and Middle East -Globalization has compounded the types and level of business risks. *Typical challenges that managers face involve politics, cultural differences, global competition, Terrorism and Technology. Managers in companies are struggling to find ways to balance their social responsibilities, their images, and their competitive strategies. -PESTEL- An analytical tool to develop and understanding of exogenous risk -Pestel analysis- Political, Ethical, Social, Technological, Environmental and legal understanding or environmental scanning that is CRITICAL if we are to strategically plan and develop our value proposition. -> Exogenous creates...
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...Abstract…………………………………………………………………………………………………………………….4 Introduction………………………………………………………………………………………………………………4 Foreign Direct Investment…………………………………………………………………………………………6 The Definition……………………………………………………………………………………………………………6 The Types………………………………………………………………………………………………………………….8 The Multinational Corporations………………………………………………………………………………..9 The Effects………………………………………………………………………………………………………………11 The Final Remarks…………………………………………………………………………………………………..13 Country Risk……………………………………………………………………………………………………………14 The Definition………………………………………………………………………………………………………….15 Various approaches of the literature on country risk (table)……………………………………17 The Historical Background………………………………………………………………………………………17 Country Risk Types and Measurements…………………………………………………………………..18 The Factors……………………………………………………………………………………………………………..22 Country Risk Assessment…………………………………………………………………………………………23 Risk Measures (table)………………………………………………………………………………………………25 The Methods…………………………………………………………………………………………………………..27 How does Country Risk matter for FDI?.......................................................................29 FDI and Country Risk: A Research……………………………………………………………………………33 The Data…………………………………………………………………………………………………………………33 2 Foreign Direct Investment and Country Risk The Concept Model and Hypothesis…………………………………………………………………………33 The Empirical Estimation…………………………………………………………………………………………35 The Analysis of...
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...CHAPTER ONE: CHAPTER TWO: * Strategy is a planned process whereby organizations can map out a set of objectives and methods of meeting this objectives. * Corporate strategies is a company-wide strategies that are concerned with the long-term view of the organization * Business strategies focus on one line of business; building a strong competitive position * Three corporate strategies (Restructuring, Growth and Stability/Maintenance) * Strategy is like a game plan in sports or an airline’s flight plan. It is important to have a plan that moves towards goal achievement, however, there must be flexibility and adaptability to adjust to internal and external environmental factors * Mission statement: an articulation of the purpose of the organization and the value it creates for customers * Vision: Defines the organization’s long-term goals. The vision statements asks the questions “Where are we going?” * Value Statement: the basic beliefs that govern individual and group behaviour in an organization. * Michael Porter’s Model * Low Cost Provider Strategy: Low cost - in demand in the market * Broad Differential Strategy: High cost - in demand in the market * Best Cost Provider Strategy: Low/High cost - in demand in the market * Focus Niche Low Cost * Focus Niche Broad Differentiation * Competitive Advantage - the characteristics of a firm that enable to earn higher profits that its competitors * Tangible Assets - easiest to value and the only ones that ...
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...1. Introduction The discussion between promoters of best practice and best fit approaches has sparked widespread controversy in the human resource management (HRM) area. The topic has gained much scholarly attention because it not only addresses a theoretical controversy but also possesses a high degree of practical managerial significance. The essay has the aim to analyse best practice and best fit approaches in HRM of a multinational enterprise. The reader receives insight into Lincoln Electric's organization through a case-study analysis of practical HR approaches serving as a basis for developing practical managerial implications in the last part of the paper. 2. Critical evaluation of "best practice" and "best fit" practices in HRM 2.1 Best practice approach The best practice approach claims that certain bundles of HR activities exist which universally support companies in reaching a competitive advantage regardless of the organizational setting or industry (Redman and Wilkinson 2009). Best practice models imply a close connection between HR practices and organizational performance and are often associated with high commitment management (Paauwe & Boselie 2003). Empirical research in the best-practice field shows similar groups of HR polices which are especially suitable for maximizing performance irrespective of market and product strategies (Peffer 1998, Guest 2000). Best practice bundles of activities are characterized as mutually compatible HR activities...
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...Telenor Company Profile Telenor PK is a wholly owned subsidiary of Telenor Group, a Norwegian company. The Telenor group operates in 11 markets across Europe and Asia and in additionally 19 markets through its 31.67 per cent ownership in VimpelCom Ltd. Telenor Group is among the largest mobile operators in the world with over 140 million mobile subscriptions (Q4 2011) and a workforce of 30,000. Telenor started out as a public company in 1855 and builds on more than 155 years of telecom experience. A Telenor is a global company it is always looking to expand in to untapped markets or where oppuruntities are available for expansion. Telenor acquired a license for providing GSM services in Pakistan in April 2004, and launched its services commercially in Karachi, Islamabad, and Rawalpindi on 15 March 2005; it expanded its services to Lahore, Faisalabad and Hyderabad on 23 March 2005. Telenor Pakistan’s Corporate Headquarters are in Karachi, with regional offices in Peshawar, Lahore, Faisalabad, Multan, Hyderabad and Islamabad. On 28 January 2005, Telenor established its first call centre in Karachi. TELENOR TOOK ADVANTAGE OF GRADUATES IN KARACHI BY OPENING ITS CALL CENTRE IN A CITY WITH HIGH LEVEL OF GRADUATES. As of January 2012, Telenor Pakistan had a reported subscriber base of 28.47 million, and a SIM market share of 24%. On October 2012, Telenor officially declared to have the customer base of 30 million. Competitors Its main competitors are Warid (UAE), Mobilink (Egypt)...
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...being transferred from country to country for financing When did Globalisation First Start? There are three major stages of globalisation: Stage | When? | What? | 1 | 1870Increase in international trade | * New technology helped improve transport * Reduced cost of moving goods between countriesEnded in 1920s as countries tried to protect home industries against foreign competition so reduced imports. | 2 | 1945 End of Second World War | * Countries keen to rebuilt economies * Led to rapid expansion in world trade * International Monetary Fund and World Bank founded * Promoted trade and economic cooperation | 3 | Now | * Increase in trade and capital flows between countries * Growth of huge companies | Factors Contributing to Globalisation Improvements in transportation | Cost of transporting goods decreased (eg: due to containerisation) meaning goods can be traded competitively worldwide | Improvements to ICT | Communications are much faster and cheaper – payments can be sent between countries immediately at a low cost. Promotion of products via the internet to a worldwide market also increases world trade. | Rising real living standards | Increase in consumer demand for a wider variety of goods in richer countries has greatly stimulated world trade | Decline in protection | Countries encourage trade, so fewer barriers to trading (eg: no import taxes) | Economies of scale | Technological improvements mean companies mass-produce and...
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