Executive summary
This report is going to deal with the issue of
team formation and how to ensure their effectiveness in regards to
multinational companies. The report is going to take the format of an
introduction, an analysis of the subject matter, which is going to be centered on
the different approaches to selection and recruiting of staff in the
multinational companies and there after, a stand point that the writer feels is
the appropriate technique for consideration. Through analysis of the subject
matter, various propositions on how to form an effective team will be compiled.
Recommendations on the topic of discussion as regards to what could be done and
implemented will also be addressed. The writer will also come up with a
conclusion which will basically be a summation of the key issues addressed in
the report.
Introduction
International business development entails the
evolution of the normal process that underlay trade, the flow of capital,
foreign direct investment, the advancement of technology and the subsequent migration
towards the nation that were traditionally underdeveloped or undeveloped. The most important consideration in the
international business development lies on the ways in which the businesses
will become accustomed to the societies and cultures of the countries in which
they operate in
(Beechler & Baltzley 2008).
There are a number of considerations that must be looked into when posting or
recruiting professionals who will serve in the foreign countries where their
firms have moved into. The issues include the economic considerations, the
cultures and the laws that govern the country, trade patterns that govern the
country and the business practices that are found in the country where the firm
seeks to start its operations. Consideration must be done in regards to the
formation of the strategic partnerships, intellectual property issues,
advertising and financing, international marketing, fair trade practices, the
management of knowledge and information management.
Analysis
It
is a very difficult task for a multinational when considering the recruitment
of international employees. It is therefore very essential that human resources
are deployed within the framework of international considerations. It should be
noted that the resources that companies poses as regards with making resource decisions
are immense. The personnel that the multinational company recruits help to make
a difference in the local country of operations. In this case therefore, it is
very important that the right selection and approaches are used with the
incorporation of the most efficient ones in order to ensure that the company attains
competitive advantage in its local operations (Beechler and Javidan 2007).
The
first approach that the company could use is the ethnocentric approach which is
based on the occupation of the main positions of the company by the employees
from the head quarters of the multinational corporation. That is, the expatriates
that have been recruited from the parent company. It has been a normal perception
that in order to successfully manage subsidiaries, the companies should incorporate
the use of their expatriated employees. This is due to the fact that they are basically
very well oriented with the objectives and goals of the company as compared to
the local angers that would be hired. In the case of this method, it is highly essential
that proper communication is used with the incorporation of cooperation and
control of the activities of the organization (Boyacigiller et al 2004). The nationals
from the parent companies are usually given the roles of top mangers so that
they can be able to implement strategic decisions for the company from the headquarters.
In this case therefore, the decision of recruiting expatriates will be
dependent upon the technical knowledge or the type of international expansion
that the company seeks to incorporate.
Alternatively,
the company could use the polycentric approach to recruitment .This way the company
could incorporate the use of recruiting the nationals of the country in which
they are seeking to operate. This way, the company will be able to reduce the
cost incurred on foreign operations (Bouquet 2005). Through handing over
the management of the company to the people in the host company, the company is
in a better position to understand the needs of the local market, the political
climate, and the cultural and legal requirements of the host company to a
greater perspective. Through adoption of this method, the company is able to
adopt a human resource department that is localized in nature in order to
manage the human resource function in that country. Many of the MNC’S operating
in Europe and Britain adopt this method of recruitment so as to ensure that
their local companies are effectively managed. For example, top companies in
India like TATA and HCL technologies which deal in IT entered the US markets in
order to set up base. In order to ensure that their subsidiaries operate effectively
they recruited American nationals who were straight from college and other
professionals with the local knowledge and expertise in the domain. This is
because they understood the fact that the local employees’ had better knowledge
and the cultural orientation of the People in their country of origin (Fernandez-Araoz 2007).
The
other approaches are the Regio-centric method which involves recruitment of
people form the countries with similar cultures. For example Asians may originate
from different countries but their culture is similar. Lastly, there is also
the geocentric approach which incorporates individuals from both abroad and
locally and the whole world is treated as a global market place.
As regards my opinion,
the best approach to recruit the team is the polycentric approach. In order to
ensure that the approach is a success, the following key points should be kept
in mind:
The
company should create a standard operating procedure. Market leaders from Asia
or Europe deice to open up new markets in the United States and compete on the global
basis of the multinational companies. Usually in incorporation of their
business overseas or on the international level, many multinational companies
choose to send their trusted employees from their home country to the
international country as part of the developments that they would like to make
professionally, in order for them to head the international subsidiaries or posts (Groysberg et al 2006).
In the long run, these executives end up being paid lees than the local
executives restricted by the pay scales of the home country of origin,
therefore making it hard for them to be able to hire talented employees as
manger of the company. In the long run, a team of incompetent and semi skilled
workers is created underpinning them to the team of “A” players in the market, thus
incapacitating their ability to ably compete in the country where they have
established their subsidiaries. In addition, the executives from the other
countries usually are not very well oriented in the details of the local markets
and this leads to deterioration in the performance of the company in general (Guthridge and Komm 2008).
Normally, just as the executive is getting to orient himself with the new
market conditions, their stay in the foreign market is cut short and a new expatriate
is brought in. In the long run, the circle of incompetence and under
performance is repeated and continued from one manger to another.
Other
times, the company may decide to hire a local executive but then there arises
barriers such as limitations in communication, their style of management or
mutual cultural compression or even limitations in all the three areas discussed.
This leads to mistrust and consequently makes t hard for the local; executive
to be able to secure the needed investments in regards to modification of
products for the local market. However, all this can be avoided and the company
can ensure that the team of employees that it attracts at the local level is an
effective team and efficient in every way to thee operations of the business.
This can be done
through consideration of the following:
Planning of the company
should be done to an optimal level.
Just
like in sports, it is essential that a corporate company incorporates the use
of talented individuals and not necessarily star players in order to make the running
of the business effective. In this case therefore, it is essential that
thorough market assessment is conducted before setting up of a subsidiary
company of the multinational corporation. In so doing, the multinational
companies can be able to determine the roles that are most important and
critical in order to ensure the success of the business and thus, be able to
capably invest in a team of players for the determined positions (Harzing and Christensen 2004).
Through having the right plans in position, and most importantly, the right
team to ensure that the plan is executed, the multinational company can
increase it chances in being a global performer.
In
building the team of a players for the multi national corporation, different
strategies can be considered, In many cases most companies would require more
than just an a team of sales personnel
to keep up with the global competition. Other companies might require a completely
different line up of professionals and a wide range of talent in order to make their
corporation a success. A business that is more aligned to regulations that are stringent
in its operations will require an “A” team of regulatory individuals (Bartlett and Goshal 1989).
On the other hand, the industries that mostly compete on innovation and in
creation of new developments will require an “A” team of research and developers
and people with skills in marketing and sales in order to propel the company to
the height of the other competitors in the zone. In most organizations, say
like in industries and investment banking, the organization may require the
help of at least one local rainmaker ion order to propel the company to the happenings
on the local ground and to enable them to gain entry into the local market.
It
is very essential that the multinational company considers people process. It is
essential that the company to incorporate processes that emphasize the development
of the professionals for the long term in order to be able to gain the loyalty
of the employees. This way, the company can be able to build a channel of
skilled employees and knowledgeable work force that can easily be oriented into
the team “A” group. This includes process like training and developments and
mentoring of the employees in relation to the opportunities that are rotational
in the company. As regards processes of the company, it is essential that the
company uses the same criteria as regards the aspect of global human resources management
processes. For instance the 400 top executives of the company should be aware
of the fact that the company holds a formal review and assessment face to face,
regardless of their location and that they ought to attend.
In
order to ensure that the company is able to attract local talent and recruit
effective employees for the company, it is highly essential that they localize
the operations of the company to suit the culture of the local people. The company,
instead of exporting their home culture to the new international branch should
in fact incorporate the use of local contracts and schemes. In the case of
localizing their operations in Europe, the company should be able to take long
summer vacations just as is the norm of the companies in the country. In the US,
the company should b able to indulge with the local; network of the businesses
well as the non profit organizations and the charities in the country.
It is essential that a multinational
company seeking to gain local market entry considers to conduct a leadership
due diligence as a way of thoroughly assessing the capabilities of the local executives,
especially through use of a third party in order to build a shadow team that
will incorporate both the locals and abroad, for the execution of the most
critical company roles. The team incorporated should gain approval from the board
and will act to ensure that they constitute an “A” place team to run the
operations of the company from the first day that they acquire their positions.
Proposition of employee
value and branding
It
is usually the norm in multinational companies to attract the best of workers
and employees in their home countries and tend to do the same on other
subsidiaries that they tend to internationally develop. It is very difficult to
attract a team of “A” players when the brand of the multinational company is
unrecognized locally. In order to ensure that the best team is put in place, it
is essential that the company hires a leader with star power. Generally this
means the hiring of an individual with the capability to attract other employees
to the brand of the company. It is however very essential that the managers of
the company appreciate that they may not have the same pulling and brand
recognition for their company as in their overseas base and thus consider the
hire of an individual that is very high profile to run the branding show.
Another
alternative that the company could consider would be to hire an individual with
a strong network in the international field, through which the company can be
able to draw from. For instance, some multinational companies have incorporated
the use of CEO’s from companies that have an international recognition in their
board in order to assist in the attraction of skilled talent in the company’s
high profile management team. It is very essential that the Global CEO of the company
depicts a clear vision in regards to what he aims to attain internationally and
be able to realty the same vision in a language that is understood in the
global platform.
In
addition to the above, the company must also reflect a clear and open employee
value proposition. This is very important especially in the recruitment of the
highest caliber individuals and in order to attain their loyalty for the long term.
This value proposition to the employee entails issue like payment to the employees,
opportunities to develop, contentment in work, leadership and a story that is compelling (Fink and Holden 2005).
This could include giving the employees the opportunity to take on more
responsibilities in the early stages of their career and the opportunity to
make more changes being that the scale of operations for the company will still
be very small. In most cases, multinational companies are usually surprised that
there nationality has very little impact on their operations of the company. That
is, it doesnt considerably matter that they may be from Chinese or Indian origin (Hannon et al 1995).
In the United States and in Europe, the chance to spend a considerable amount
of time in Asia usually seems very attractive. In real sense therefore, there
is no need to be insecure or defensive when it comes to the hiring of foreign multinational
top talent employees. In many cases the defensive issue tends to be of greater importance
than the issue of compensation as regards the employees to be hired.
In order to evaluate
the effectiveness of the approach above the MNC’S could use the following
tactics:
The
company could asses the leadership of the team through analysis of their
performance as regards the critical functions of the business, in relation to
how ell they maneuver and exert and influence the operations of the company at
the strategic level. This could be done through evaluating the strategic
position of the company after they take up their levels of responsibility and
how well their structures support the operations of the key driver of the business.
For instance, in many companies, the United States and Europe are placed
organizationally to act as sales operations for the company (Hocking et al 2004).
However, if the United States Company is the major driver for the business then
the structure o reporting the operations of the business should be able to
support that importance.
Recommendation
In
order to ensure that the multinational company builds an effective “A” team,
the company should devote more of its resources and time into taking advantage
of the national talent that is trapped in the local host countries through
supporting global mobility. It is also very important that a standard
performance evaluations for all the individuals are created in order to build
confidence in the of line managers (O’Dell et al 1998).
Conclusion:
It
is essential that for the company to build an effective international team in
the global level, the use of a roll out program should be used in order to
incorporate the fundamental basics to make the hiring and selection of
employees in the international context a success.This way the operations of the
business will be more localized and this will help to reduce the cultural
limitations that may impede on the operations of the business. Through use of
the polycentric approach and incorporation of these elements, the firm will be
able to perform well in the market place and also enjoy the benefits of having
the leverage of the “A” team players in the world.
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