A multinational company is the kind of a company, which has its employees and assets operating in more than one country. This paper explores the manner in which multinational companies and corporations manage their employees in foreign countries. Multinational operations in foreign countries involve a whole set of challenges that such companies rarely encounter at their domestic levels. Due to the pervasive nature of multinational firms, they possess unique advantages that differentiate them from other firms, which operate at local levels (Caligiuri & Stroh, 1995). Most multinational companies around the world enjoy a lot of successes and it for this reason they become subjects, which require close analysis. There are several critics who are always in opposition of multinational firms accusing them of being cultural dictators, agents of capitalism, and dogs of capitalism (Caligiuri & Stroh, 1995). Therefore, in order to streamline a holistic management criterion of multinational firms, the executive management requires having various sets of theoretical tools more than they have for their domestic companies. Conducting comprehensive studies to establish certain facts is essential. The issues involved in the study may be of fundamental sociopolitical, organizational, strategic, and economic orientation (Feely & Harzing, 2003). All these issues are significant in the sense that they affect international expansion of business. Besides, management of employees in multinational firms requires proper comprehension of labour relations, interest groups and government of their respective countries.
Management of employees in multinational firms requires more than the normal procedures in the domestic firms in order to make the entire process a success. A number of issues do arise; for instance, performance incentives can lead to issues of conflict in multinational firms. Both management and employees can present differing views regarding a just and fair compensation and rewards for various levels of performance (Feely & Harzing, 2003). Another set of issues entails the influences of culture on employees and the manner in which management understands and defines desirable performance. Due to the differences in the nature of cultural influences from one country to another, it becomes essential for multinational companies to embrace performance management policies for each country. For proper employee management in multinational companies, the executive management requires having language, technical and cross-cultural training programs to facilitate employees (Sumetzberger, 2005). They should, also, address the differentiated and complex nature of rules and regulations from one nation to another.
There are several human resource implications that arise from inevitable inter-country cultural differences. One of them entails the essentiality to adopt human resource practices, which conform to the local norms. Such practices may include plans for interviews, recruitment and payment (Sumetzberger, 2005). Besides, for purposes of successful operations, the management should draw human resource staff members from citizens of host country to manage such foreign subsidiaries. According to Peterson et al. (1996), whenever a human resource staff shares similar cultural background as the employees, he/she is like to be sensitive to the expectations and needs of such employees at the place of work. The overall result of this kind of sensitivity is successful management and improved overall employee performance. Human resource management in multinational companies, also, does consider economic factors. Different countries have varying economic systems, which result into variations in inter-country human resource practices (Xiaoyan & Lan, 2013). Labour costs comprise another set of factors that human resource management considers in order to manage employees in multinational companies. Human resource practices may differ following difference in the costs of labour. In situations where there are high costs of labour, there would be intense focus on efficiency in order to improve employee performance (Sumetzberger, 2005).
For multinational companies, international staffing is a key element of success or failure. Besides, categorization of international managers is a significant idea. There are four main categories on international managers that include the locals, the expatriates, the home-country nationals, and the third country nationals (Caligiuri & Stroh, 1995). Multinational firms ensure that the locals fill most of the managerial positions both in foreign subsidiary and headquarter operations. They ensure that expatriates just fill minor positions, which require technical competencies for efficient operations. This kind deployment benefits multinational firms in a number of ways. Allowing host-country citizens to occupy management positions of foreign subsidiaries enables multinational companies to decrease operation costs. Furthermore, engagement of local citizens in foreign subsidiaries enables multinational firms to manage and overcome language barriers in their operations (Sumetzberger, 2005). In respect to language management strategies, the company management normally evaluates the following three essential dimensions: the language diversity that the company expects to interact with as it conducts its operations, the number of levels in various functions that may provoke the company to engage in cross-lingual communication, and, finally, the refinement and intricacy of the requirement language skills (Feely & Harzing, 2003). These dimensions are significant in the sense that they assist multinational firms to examine their language requirements in reference to their potentials in order to note their strong and weak spots. They are, also, essential for providing the multinational organizations with the methods to match their foreign language abilities against the strategic aspirations that they have (Feely & Harzing, 2003).
In regards to international staffing policy, most multinational firms do employ a geocentric approach when recruiting top executives of the company (Xiaoyan & Lan, 2013). This approach provides room for the best management candidates around the globe with the view that they are available in any of the nations where the firms conduct their operations. Since a geocentric approach aims at the qualified people for significant positions in the entire company irrespective of their nationality, it promotes efficient management of human resources. Through this approach, the multinational firms are capable of building a consistent culture throughout the whole global management team (Sumetzberger, 2005). The use of expatriates either third-country or home-country nationals is essential for multinational firms. This is common in situations where employers encounter difficulties finding the relevant and needed technical competencies among the local candidates.
In conclusion, management of employees in multinational firms requires more than the normal procedures in the domestic firms in order to make the entire process a success. A number of issues do arise; for instance, performance incentives can lead to issues of conflict in multinational firms. There are several human resource implications that arise from inevitable inter-country cultural differences. One of them entails the essentiality to adopt human resource practices, which conform to the local norms. For multinational companies, international staffing is a key element of success or failure. Besides, categorization of international managers is a significant idea (Sumetzberger, 2005). There are four main categories on international managers that include the locals, the expatriates, the home-country nationals, and the third country nationals. In regards to international staffing policy, most multinational firms do employ a geocentric approach when recruiting top executives of the company. The use of expatriates either third-country or home-country nationals is essential for multinational firms especially for handling technical assignments.