Globalisation Yip (1995), global strategy which belongs

Globalisation is a term which
can be defined as a process of changes. There are multiple definitions of
globalisation. According to Blyton et al., (2001), globalisation is combination
of different geographical business markets into a single multinational market
area. This term was introduced by Jack
Welch in his CNN interview as contributing real competitive compulsion but also
extensive benefits. Globalisation can be seen in different areas such as trade,
technology or political and economic systems. It has played an important role
in organisations because it affects how to manage employees in different
circumstances. It is obvious that there is a strong link between globalisation
and human resource.

 

Multinational
organizations are seen as a strong mechanism for carrying of managerial
knowledge and also capital in other countries (Tayeb,1998). In other words,
multinational companies employ their own organizational operations into other
foreign subsidiaries (Bjorkman and Lervik, 2007). Additionally, a main pressure
that MNCs have, it is generally presumed and how to counterbalance the global
policies with local circumstances (Edwards and Kuruvilla, 2005). In this stage,
it can be explained that there are three HRM main strategies which are
ethnocentric, polycentric and global. In ethnocentric strategy is HRM policies
and practices need to obey home country rules. For example, an American company
set up its own American management style in host country. In contrast with it,
polycentric is about host country’s rules such as German firm follows German
policies. The last strategy is global and it can be defined as a universal
company-wide policy. In order to illustrate this strategy, a well-known example
of it McDonalds.  According to Yip
(1995), global strategy which belongs to MNCs has a close relationship with
HRM. It can be argued that the balance between multinational ‘isomorphism’ and
distinction is influenced by home and host national business systems (Vo and
Stanton,2011). Multinational enterprises rely on their capability to manage an international
human resource not only in their home country but also in host countries (Dowling
and Welch 2004). When international firms open in abroad, it is inevitable that
they face with some HRM problems. They need to find best HRM practices and
theories in order to be successful (Farley et al.,2004). MNEs need to build
organisational law in their host countries and need to focus on labour issues (Vo
and shon,20). Therefore, multinational enterprises are faced with stress. Also,
Hr context is shaped by the host country, home country and industry. It should
be said that there might be different range of HRM models and theories which
are shaped by types of companies or sectors. Galbraith (1973) has divided that
three main contingency views which are questioning which is best way, unequal
ways of effective of firms and nature of environment for operating
organizations. These environmental conditions can be legal, political or
demographics features of companies such as organisation’s age and size (Farley
et al.,2004). In their influential analysis of HRM practices in abroad, they
have noted that HRM strategy ought to encounter stakeholder attentiveness in
order to reach long-term success. These factors are related with labour market requirements,
trade unions and system of law and social ethics. Another significant factor is
economic conditions in labour market. It is essential for MNCs to expand well
organized HRM strategies which help to get highest financial advantages. When
the parent organization has alike economic circumstances, then some HRM policies
would be converge to a similar shape which rely on greatest profitable outcomes
(Farley et al.,2004). By way of illustration, Farley et al. (2004) have showed
that economic effect might connect with parent countries culture such as form
of recruiting. Work values and successive HRM strategies are turning widespread
in geographic fields in where important modifications have given rise to
financial and other circumstances to become more homogeneous (Farley et
al.,2004). A notable example of this is former Soviet Union, Eastern Europe and
Far East. The evidence of Far East can be clearly seen in Farley et al.
article. They have showed that there are some parallelisms in HRM issues as
well as differences in Asian firms. However, if the parent and subsidiary do
not get use to similar shape of financial, governmental, and social, then there
might be some problems in management strategies. The MNC parent country might
put pressure on assumption on HRM policies. 
For instance, in 1980s most of Japanese mass-production facilitate in US
such as Nissan, Toyota and Honda and they usually become successful in pushing
in confirmed Japanese style HRM strategies to American organizations (Farley et
al., 2004). It can be said that these strategies are related with job-training,
job security and teamwork. On the other hand, cultural norms and values are key
role in MNC environment. It is obvious that an employee behaviour is depend on
common shared beliefs. Therefore, ethics and beliefs are needed to learn by
managers or HRM departments. Employee performance play a critical role in a
firm and the main features of employee management is observing, giving feedback
and reward (Vo and Stanton, 2011). In Hr perspective, management of employee is
vital for any firm (Nankervis and Compton 2006).  According to Vo and Stanton,2011, they have
identified that theory of performance management is established on western
concepts and acceptance of human behaviours. However, some academics have
argued that culture, background and governmental environment can have an impact
on behaviours. According to Cascio and Bailey (1995), if a person disregard to
accepted beliefs, then it may cause to damage customer relationships between
organisations. As it is known that China is important in labour market because
of increasing China’s market advantages. Especially, MNCs in China are able to
force for best administration in terms of culture, performance management and
employee training. It is said that Chinese workers and managers are using
common best practices which include results and evaluation (Farley et al.,
2004). Thanks to labour market in China, many MNCs firms are supposed to follow
‘best’ HRM strategies which contain results and social environments. Also, in a
similar case in China, Kim et al. (2014) have identified that numerous
companies which are located in China have disappointed in terms of doing
business with Chinese workers. In order to support this view, Global Post
(2013) have demonstrated that Google, Ebay and Mattel which are American firms
informed their failures in China. It can be interrogated that why these firms
have failed and have some difficulties when they intend to do business? It can
be said that one of the reasons why they fail is differences between two
country’s cultures. In Hofstede cultural dimension, Western countries are more
individual and democratic relationship but Confucianism is based on
interpersonal relationship. In addition to Hofstede cultural dimension, it
should be said that China has high power distance and long term orientation. In
power distance, inequality, power or statues are accepted by people and they do
not see as a problem of it (Hofstede, 1994). By contrast, in low power distance
countries are expressed their ideas easily if they feel any inequality. Power
distance in China is changeable. On the other hand, some researchers have
presented that Chinese workers level of independence and manliness were similar
to US workers (Schilpzand et al. 2013). Chinese are comparable in their ethic
values and these beliefs can be changed from one to other countries (Hofstede,
1994).  The last example of China is
about efficiency. According to Tsui et al., (2006), private organizations
values are depended on market oriented culture such as efficiency, alteration
or orientation. Foreign owned organizations which is located in China tend to
use Western type of human resource management. In Ding et al. (1997) research, they have found that these foreign
companies have utilized Western human resource management strategies in China
such as reward for performance individually. In order to be successful in
Chinese market, it is needed to respect to their own cultural values. Isomorphic
is defined as sharing the same environment with similar strategies (Kostova and
Roth, 2002). This isomorphism is divided into three areas which are coercive,
mimetic and normative. While coercive is about forcing by powerful authority,
mimetic is about replying unpredictability by choosing the Hr systems (Kostova
and Roth,2002). And normative is accepted normative way of behaviour (Ayentimi
et al., 2017). In addition, it is important to add that there are several ways
in that institutional form of host country might influence on external
subsidiary (Kostova and Roth,2002). A subsidiary might adopt a strategy for
gaining isomorphic. In order to adopt host country, it is required to identify
MNCs practices (Kostova and Roth,2002). In Kostova and Roth study (2002), they
have identified that dependence, trust and identity are characteristic feature
of relational context. In convergence perspective, flexibility, rationality,
best practices and cost effectiveness support capitalism (Ayentimi et al.,
2017). The academic journal which belongs to Drori, Meyer and Hwang (2006) has
showed that western organizations such as NBS, cultural norms have controlled
international growth and trade. Capitalism is a contested term. Mayrhofer et
al. (2011) have identified that capitalism is an authoritative and perceptible
economic system. Also, they have added that institutions are becoming more
similar in terms of behaviour, values and controlling structures because of
globalization.  

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It
should be mentioned that national effects which can be weakness in a way are
conceptualized (Edwards and Kuruvilla, 2005). In order to support it, the study
of Hannon et al. (1995) have demonstrated that 100 subsidiaries MNCs in Taiwan
have insufficient knowledge about Taiwanese system. Significantly, national
form is expressed in terms of set of values. It should be asked that whether
culture is operated in unsecured way or in a particular way (Edwards and
Kuruvilla, 2005). In other perspective, In Brewster (2007) study, it has
mentioned that Europe needed to be understand of meaning and there are
different characteristics of culture within Europe. Importantly, it is needed
to analysed of Hofstede cultural dimensions. For instance, it is not
understandable whether payment ways should vary from countries which are power
distance or low distance or masculine and feminine perspectives (Edwards and
Kuruvilla, 2005). A national business system has been explained by Whitley
(1999) as a set of interconnect forms. According to Edwards and Kuruvilla
(2005), employment laws are outlined to maximize job safety and they are well
suited with economic systems such as Germany in where there is active market in
merge with control.

 

According
to Bjorkman and Lervik (2007), some of researchers have examined that MNC
subsidiaries are determined by overseas parent companies. A low independence of
subsidiary might obligate to execute into headquarters of HR strategies
(Bjorkman and Lervik, 2007). However, employees cannot be persuaded to achieve
this HR practices (Bjorkman and Lervik, 2007). When managers of foreign owned
companies think that application of particular HR strategies in a clear, then
it is probable to affect their tendency to work their performance (Bjorkman and
Lervik, 2007). Nevertheless, as mentioned before workers cannot be forced in
order to internalize the HR strategy. Social capital theory is analysed by
Bjorkman and Lervik (2007). The researchers have examined the connection
between MNCs headquarters and the parent country might affect the transference
HR practices. Organizational, relational and cognitive are part of social
capital theory. While structural dimension is dealt with mainly with
interpersonal links in terms of solidity and interconnected, the dimension of cognitive
which belongs to social capital theory surrounds organizational facts such as
language, shared explanation, and codes (Bjorkman and Lervik, 2007).  The relational dimension which is the last
dimension is emphasized friendships, personal relationships and reciprocal
respect. In researchers’ perspectives, mechanisms have played a significant
role in social capital theory and MNC can be divided into two parts which are
bureaucratic and formal one. Bureaucratic mechanism is necessary for MNCs in
order to control and coordinate operations. In contrast, Martinez and Jarillo
(1989) have argued that increasing MNCs sizes and getting more complex may
cause to insufficient administrative mechanism for controlling and
coordination. Hence, informal mechanisms are progressively enhanced by doing
short term visits, individual rotation, and involvement of joint training. The
using of informal mechanism, instead of bureaucratic one, between MNCs and
foreign companies helps to increase interpersonal networks and viewpoints
towards to another culture (Bjorkman and Lervik, 2007).  In shared cognition, communication in a shared
language such as English or Chinese is essential. In Kogut and Zander (1996)
study, they have analysed that shared mutual communication codes might work for
making easy of transferring information between employees and units.