The Culture And Institutional Structures Of The Home Country

This report examines cultural and institutional factors of Mexico and how they can impact global HR management and practices. Specifically, by analyzing Mexican culture based on Hofstede’s dimensions, economy, labor legislation, union and employment tradition we reached the conclusion that the features of Mexican culture (high power distance, strong collectivism, high level of masculinity and uncertainty avoidance) and institutional factors have a strong impact on management styles and HR practices of business in Mexico and may arouse some challenges for global company and their expatriates, especially those from countries that bear different cultural features and institutional conditions. In order to minimize the potential conflict between Mexican local employees and expatriates, parent companies need to provide trainings (culture assimilation, country condition, etc.) before sending anybody to Mexico. Also, whether the expatriates should put more effort to disseminate home country (headquarter) culture or to adjust to local culture depends on the company’s strategy in terms of being localized or standardized around the globe.

Businesses today operate an environment that differs greatly from anytime millennia, centuries or even decades ago. The pace of businesses has increased exponentially with the continuous improvement of information technology, telecommunications and geolocation supported by satellites and progressively more efficient modes of transportation and mechanization. The ability to move products globally overnight, increasing levels of automation, and collaboration instantaneously via virtual means has forever changed and reduced traditional barriers businesses face while creating a myriad of new challenges, risks and opportunities.

Looking from the dependency theory’s point of view, the need for control also pushes a MNC to implement their home-based policies. The stronger the need is, the more the necessity of integrating these policies will grow, and hence there is a probability that the HR practice will resemble the home-country practices. The more dependent a subsidiary is to their parent, the more the firm will try

The country managers of a multinational corporation 's (MNC) is usually a local national, also they do not have effective connection with their employees. It is routinely responsible for the functioning of the company 's managers in their branch. Moreover, the local leaders have strategically considerable tasks, such as management of a number of staff and the accomplishment of the income and profitability aims of the subsidiary (Schmid and Kretschmer 2010). However, managers of different nationalities in local branch, it is possible to take advantage of previous

Kant believes that humans are “rational beings, capable of reasoning and deserving of respect”. According to page 360, “treating a person with respect means treating them as rational agents capable of making their own free choices, responsible for their own actions. To justly punish a person is to acknowledge their status as responsible agents deserving of respect. Executing a murderer is not an affront to human dignity but a recognition of it”. By punishing the criminal, we are respecting his beliefs, because we are treating him in the way that he thinks people ought to be treated. We are not punishing him due to our own beliefs, but because it is in accordance with the principles that he has endorsed through his own actions. If someone makes a choice to murder someone, they also make the choice to accept the consequences of that action.

In addition to the above institutional differences there are some cultural differences between countries that effect MNCS and HRM. The work of Hofstede focuses on how perceptions and values influence the way people interact and react to each other with the help of five cultural dimensions. Cultural difference namely power distance is the degree to which people in a society perceive the power to be distributed unequally. The high score of PD represents countries with the more organizational hierarchy and more power held by the people at the top levels of the hierarchy. Countries with a high Score of PD include India, China and South American countries. On the contrary, U.S can be one example of countries with low power distance (Hofstede, 2001). The second dimension is of Uncertainty Avoidance. It is the degree to which the individuals in a society are threatened by uncertainty risk. Countries like Saudi Arabia with high power distance and uncertainty avoidance tend to have rigid rules and leaders have more power. For example, India has a unique and diverse culture with a set level of hierarchies. The employees at the top level of hierarchy have more power that can be misused as those in power are backed by governments and unions. The social inequality, poverty and unstable political environment explain the high uncertainty avoidance in the Indian culture. Therefore, HRM uses training and career development programs as means of improving this high level of uncertainty

Understanding the culture in the target market is essential for managing a subsidiary efficiently because the client will be part of that culture and will be subject to daily cultural interaction. Thus, the more the client is aware of the other culture, the higher the chances to succeed in managing the subsidiary. One way to understand the differences in a culture is through Hofstede’s country comparison. Even though Hofstede’s model and theory are subject to a lot of criticism, they are widely accepted by academic researchers and professionals as a mean to understand cultural differences (for a better understanding of Hofstede’s cultural dimensions please visit: https://www.geert-hofstede.com/).

For future research, an issue that interested me is the increasing of cultural convergence. Can MNCs leverage resources and standardize organizational practices across cultural boundaries? In my opinion, it is possible but really difficult to achieve even the world is becoming more global since there is no truly 100% globalization. Globalization does not mean that every country will become the same but it makes people realize the differences between them when they move out of their shells. When a firm goes abroad different strategy will be used differently on each country so there is no universal strategy or standardize organizational practices.

Discuss at least two (2) strategies that multinational corporations (MNCs) can undertake in order to make

Every organisation dreams to be multinational enterprises (MNEs), and if it’s not the global environment is forcing companies regardless of their location or primary market base, to consider the rest of the world in their competitive strategic formulation. Firms cannot isolate themselves from or ignore external factors such as economic trends, competitive situations, or technology innovation in other countries if some of

MNCs set up subsidiaries or joint ventures in different countries. MNCs should mainly consider the legal practices, minimum wages, Labour market regulations, the culture, industrial relations systems, the character of country’s welfare system and the cross- country differences for framing the policies. MNCs may choose to adapt the environment in the host country or develop policies based on the customs and practices of the home countries. The challenge for the HRM will be to consider all these while framing the policies and helping the company to achieve profits in that country. Even though HRM considers all these factors, MNCs are so powerful, that they bargain for the investment decisions in the country and also actively participate in lobbying for institutional changes according to their preference.(Anne -Wil Harzing 2011).For example, MNCs in Europe take parts in lobbying at European Union Level so that it will be favourable for MNCs in regard with changes made in EU regulations. (Coen 1997).

21st century is considered as the era of information technology. Technology has helped people in many areas in life; particularly the thrive of networking has brings people from over the world together. As such, nowadays, multinational is seemed as a trend (from as small as a group of friends, to as big as a company, and country). In today world, you can easily get jobs in countries others than your origin. As a consequence, many big organisations has developed to be a multinational brands; particular like McDonald and Marriott. These two brands have many years of experience in finding a way to adapt to the surround environment where their franchises are located. On a smaller scale, within their own company,

he decision-making processes in multinational organisations are linked to several variables, such as political, social and legal elements. In the growth of international trade, foreign direct investment and the cross border flow of technology, increased emphasis is placed on culture in business. Culture is taking on a vital role in ensuring benefits for businesses, mainly with regard to business success or risk. The integration of cultural characteristics with management practice is now considered to be the main principle at work in accomplishment.

Multinational companies (MNCs) gradually more control the world’s markets, and are playing an essential role in the globalization of economic movement. In sequence, the need for develop new forms of trans-national management organization is very much necessary where MNCs manage their employees on an international standard and this is viewed as important to the achievement of globalizing strategies (Bartlett and Ghoshal, 1989). A considerable body of literature investigate that transfer of “best practice” in Multinational Companies have been made, dazzling the importance emotionally concerned to the effective management of people from corner to corner national boundaries for Multinational Companies performance (Hofstede, 1980, 1997; Bartlett and Ghoshal, 1989; Adler, 1986; Adler and Ghadar, 1990; Yuen and Kee, 1993; Guest et al., 1996; Ferner, 1997; Edwards and Ferner, 2000). HRM practice from the home country to abroad subsidiary may be hampered by constraints set by the culture and tradition of the host country (Jain et al., 1998). In compare to, home country variation are more likely to create complexity for the “reverse” distribution of practice back from foreign subsidiaries. For trans-national business organization trying to develop “global” best practice, national limitations could be resulting from both the home and host country (Ferner, 1997; Edwards, 1998; Edwards and Ferner, 2000; Zhang, 2001). Dissimilarity in national business systems has influence HRM practice

The demand for global service market increases rapidly. The global flow of talents along with the expansion of multinational business are brought in by global technical transmission and economic cooperation. Therefore a multinational company has become a significant participant of globalization.