What do you consider are the most important strategic challenges for today’s HR practitioners operating in multi- or transnational companies? Critically discuss your position drawing on ideas and arguments raised during the semester and with reference to a brief example from industry.
Nowadays, with the increased level of globalization and advance in technology, new markets and international business have grown dramatically in the whole world. As a consequence, firms are now experiencing fierce competition at both national and international level. Under this circumstance, today’s HR practitioners are encountering several strategic challenges when operating in multinational and transnational companies. Thus, they need to fully understand the complexity of the drivers of globalization (such as finance, technology, transport of goods), having global perspective and implementing proper strategies to react on those pressures to develop global competencies in different regional and national settings. This essay will firstly identify the key strategic challenges for today’s HR practitioners operating in multi or transnational companies faced. Simultaneously, the report will provide some solutions and recommendations on coping with those challenges. Subsequently, this article will choose Coca Cola, the most quintessential global corporation as a specific example. A conclusion will come in the end.
In order to enhance global competitive advantage, HR practitioners need to clearly identify and delineate the main challenges facing and raised when corporation operates its business in its overseas subsidiaries. The most prominent challenges, cultural and corporate social responsibility will be discussed in depth.
Cultural Adaptability and Communication
Adapting to different cultures has been increasingly becoming the most critical challenge for today‘s multinational and transnational companies. This is due to the consequence that different countries have their own unique culture which shapes their values and influences their way of doing business. Therefore, HR practitioners must take into account the cultural differences and understand and promote cultural norms to promote firm diversity when operate abroad, which could highly shape the managerial attitudes. At the same time, HR practitioners should be able to provide the glue and adequate communication to make these various international divisions and groups work together.
By understanding specific culture dimensions where the company operated, HR practitioners should implement appropriate HR practices to hire, retain, motivate and reward employees to fit the local culture. For instance, according to Hofstede’s research (1980), when an American multinational company with high individualism culture operates its subsidiary in China, who enjoys a highly collectivism in its traditional culture, this company should implement its subsidiary’s rewards strategy focusing more on group performance rather than individual performance.
On the other hand, HR professionals will also be responsible for providing cultural sensitivity training for the organizations employees and for managers throughout the entire organization to proper recognizing and adapting different cultures (Czebter, Anamaria, 2002). It will help employees and senior management at all organizational levels to adapt different cultures, enhance involvement and commitment and positively contribute to business result.
Corporate Social Responsibility
In the recent period, Corporate Social Responsibility has become a critical ethic consideration and challenge for HR practitioners in MNCs organization, regardless of country of origin, sector and size. According to Juliette (2002), “MNCs operating across borders should bear some responsibility for the effects of their operations on the local environment and population to promote stability in their areas...