The purpose of this study is to analyze how the human resource or people in general terms are managed in the multinational organization across diverse culture. The company featured is Coca-Cola. The paper reviews literature relating to the HR strategies adopted by multinational corporations and relates it to culture and corporate social responsibilities, as factors that affect the human resources and people in these organizations in general.
Multinationals operate in diverse cultures which they must manage effectively to succeed. Managers are influenced by culture to make decisions, but there is need to be corporate responsible towards the environment, the public and obey the law. Introduction The research focuses on how human resources are managed in multinational organizations. In particular, the paper will focus on culture, leadership and management.
The paper views multinationals as those with entities in different countries and these are viewed as separate entities; global organizations that have operations blurring national boundaries with their structures (transnational) and those operating with domestic production but exporting/importing goods and services from organizations located in other countries. The paper analyzes the case of Coca-Cola Company as a multi-national company and how it manages its human resources across the world. The paper reviews the literature for HR management and strategies for MNC’s as well as analyzing Coca-Cola Company at the same time.
Literature Review The effects of globalizations are catching up on almost everyone in the modern society (Pan, n. d; 5). There are competitive advantages that may arise from the cross-culture management (Pan, n. d; 24). The number of people having access to international companies has increased as a result of increase of the number of these organizations, joint ventures and international assignments (Pan, n. d; 5). About 3 million Americans drive out their livelihoods from being employed by Multinational Companies. Coca-Cola is one of these companies.
This number comprises the 10% of the manufacturing workforce in the U. S. Study on the management of culture become so important because different countries have different culture, which focuses on education, religion, social stratification and language, among other things. The United States has been known to apply some management skills relating the management of the human resources, namely; taking of risk and creativity, they emphasize on how an individual performs, employing of participative management and delegation. The United States is known for its low Power distance and Uncertainty avoidance, as well as Confucian Dynamism (LT/ST) and high individualism and masculinity.
The knowledge relating to management of people across cultural divide is becoming of importance to companies as they expand their markets around the world. Coca-Cola Company has more than 90,000 employees around the world, produces more than one product lines and produces the commodity in many countries. It is therefore imperative to have an efficient HR strategy that seeks to harness the power of the human resource for the company and for survival, since it operates across many cultures. This year, Coca-Cola Company embraced efforts to improve U. S. relationships with the Muslim communities through the supporting of “Partners for a New Beginning”.
This was in an attempt to increase its performance across a multi-cultural environment. Such challenges affect performance in organizations. The program was to focus on improving business education and sharing of knowledge. In addition, it aims at recognition of potential in terms of business in the Muslim-majority communities by U. S. investors (Chhan, 2010). The company has been doing business around the world and covers cross-culture dimensions including Muslim and non-Muslim countries.
Coca-Cola Company caters for the diverse culture of its company employees through forums. Employees who share similar interests and backgrounds are connected together through these forums. There are various forums focusing on various cultures, e. g. the Gay & Lesbian Employee Forum, Latin Employee Forum, as well as those focusing on African-American. The company hires individuals with social settings that synchronize with the organizations. The employees are adopted into the organizational culture through socialization (Varela, n. d. ).
One aspect of culture as posited by Hofstede is that it focuses on civilization or mind refinement through practices/processes such as education, art and literature. The other aspect is the learning of it through the collective environment (Pan, n. d; 9). One category or group of people may be distinguished from another by the way their minds have been programmed. There is also the corporate culture which may be influenced by a number of things. These include product nature, business and industry nature.
Interest in corporate culture is because of existing competition. The perception of the managers is another aspect of HRM strategies in addition to culture (Pan, n. d; 9). Diversity management is one of the initiatives by companies to incorporate various cultures in their businesses. Coca-Cola companies has initiated and developed a number of strategic workplace programs that ensure that they deal with cultural diversity. In particular, they have done business in various regions of the world with food, dance, music that incorporates various cultures.
These are engraved in the diversity programs run by the company. In order to achieve various diversity objectives, the company develops recommendations for senior management through the Diversity Advisory Council (Varela, n. d. ). Pan has found a complex relationship between culture and the Human Resource strategy adopted (n. d; 1). Although hierarchies in the traditional organizations have helped in understanding that holds what power, modern organizations prefer flatter forms, which dilutes the hierarchical form.
Hierarchical organizations at the workplace have been challenged as being too traditional, and have been described as unable to assist the firm in meeting the present challenges at the workplace. While companies are becoming international with the motives of growing, exploiting technological benefits, to cover more market and access labor and suppliers, they are met with increasing challenges to manage people as far as legal environments, different cultures and languages are concerned, and one of the important questions for managers is how to operate the MNC’s in the face of all this (Pan, n. d; 5).
Literature has emerged from various perspectives regarding handling of these challenges, including management of human resources, cross-culture management as well as strategic management. Cultural issues must be focused upon as far as practices of HRM are being revisited. In fact, one of the greatest challenges of HR practices is how to manage cultural challenges. A gap exists relating to the academic analysis of management and the actual manager because the former tend to analyze concepts guided by many firms and environments while the latter are only operating in specific environments with very specific characteristics (Pan, n. d; 5).
Many people and inputs will definitely be involved in making an HRM strategy, to enhance the strategy of the corporation at large (Pan, n. d; 5). Technology and especially Information Technology has impacted the way organizations manage their business systems, ranging from sales to human resources departments. Quantity analysis seems to dominate decision making by various firms in the multinational perspective, but the society contribution has an impact to the manner in which the organization handles human resource management, and the results therein (Pan, n. d; 6).
The basis of study of culture in organizations can be set by the consideration of Hofstede’s findings who notices that differences in factors affecting economies and in political structures make various countries have different cultures (Pan, n. d; 6). For example, the employee perception may be affected by the personnel policies adopted by companies in different countries. Managerial attitudes are impacted in the making of HRM strategies because culture impacts the way we behave and think.
We may want to understand how managers are impacted by culture through culture levels type of study while study on strategy will give an understanding of the HRM strategy aspects. Careful selection of personnel in an MNC enables it to beat its competitors. But a strategy on a general perspective, must accomplish something. The following diagram pictures out the dimensions of strategy. It has been assumed in the evolutionary and the classical approaches that the result of a strategy should be to maximize on the profit.
Careful calculation is made in the development of a strategy and it involves a rational process, according to the classical theorization. The results of strategy are more than just profit, and this is the view presented by the procedural and systematic models. The way Coca-Cola Company makes strategic HR decisions seems to be influenced by the managers’ perception of the cultural orientations and impact of business. As has been seen, the effort to support the initiative to improve relationship between the U. S and the Muslim world is an aspect of people’s perception that the relationship could influence business.
The company has leveraged the power of technology in its global business, for example it serves employees in more than 200 employees around the world through the Web-based self-service program (Mathis, & John, 2008; 21). With large amount of resources, the company can harness on the economies of scale to provide goods that are affordable. In addition, it is able to source for the technology necessary for production as well as to manage the resources.
The companies use e-marketing systems to sell their products also. The global business today is dominated by multicultural environments which influence the way the organizations are managed. Companies cannot therefore ignore the multicultural aspect if they are operating on the global environment. Management of the human resources of an organization should focus on the principle that the performance of an organization is based on the performance of the individual.
Any effort to have a positive impact on the effectiveness of the people in the organization should link to the factors that affect the performance of individuals, namely ability and motivation. There is every reason to believe that the job reward and requirements should be synchronized with the needs, abilities as well as the knowledge and individual skills. The following chart reveals the framework for the HRM.
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