Discuss About The Policies Practices For Multinational Enterprises.
Multinational companies are the companies that have its operations in multiple countries at the same time. It can be described in other words that a company has it business activities in several countries. The international market in today’s world is experiencing globalization and the open market system has led to the emergence of competition and newer. With the ease of establishment and formation, there come the complexities of accounting due to the foreign exchange rates. Several countries have their own form of currency that fluctuates depending on the political climate and marketing system existing in a country. The multinational companies keep this issues in mind while framing the business policies in other countries (Birkinshaw 2016). National Australia Bank is one such multinational company which has its branches in several other countries. National Australia Bank is a major financial institution in Australia in terms of customers, earning and capitalisation. The bank was ranked 41st among the other banks in the world and in terms of market capitalisation, the bank is ranked as 21st. In the year 1982, the National Australia Bank was formed and at that time the bank was named as national Commercial Banking Corporation of Australia Limited. National Australia Bank was formed due to the merge of Commercial Banking Company of Sydney and National Bank of Australasia. Thus after the successful merger led to the formation of National Australia Bank Limited (Nab.com.au 2018a). This study is based on the comparison of the National Australia Bank and its subsidiary in Japan. The study also focuses on the cultural differences between the Australia and Japan and that challenges on the choice of the of the management policy with respect to the Tokyo office; The main design of the institution that has led to the career development of the employees that are working in Japan and Australia.
The main parameters upon which the comparison will be based are power distance, individualism, masculinity, uncertainty disturbance, long-term orientation and indulgence.
Power distance- this defines the extent up to which the powerful members of the organizations and societies within a country accept and expect that power is not distributed equally. This means that the inequality in a society is endorsed both by its leader and the followers. In comparison to Japan, Australia scored low (36) on this dimension. Within the Australian organizations, for the purpose of convenience, the superiors are found to be accessible all the time and the managers at the same time depend heavily on the teams and individual employees for their expertise. The employees and the management expect that they must be consulted and the sharing of information should be done on a regular basis. The communication is participative, direct and informal (Hofstede Insights 2018b).
Individualism- this can be defined as the degree or the level of interdependence up to which a society tries to maintain amongst its members. In the individualist society, the people are considered to be looking after their families and themselves only. Whereas, in a collectivist society people stay in groups and take care of themselves in return for the loyalty. Australia in terms of the score (90) is an individualist culture. This means that the society is a loose-knit society and the people are supposed to look after their immediate families and themselves. In the world of business, the employees are found to display initiative and are self-reliant. Also, it is important to note that the promotion decisions, hiring and work are all based on the evidence or merit.
Masculinity- the most basic issue here is that the what motivates people the most are liking what they are doing and the wanting to be the best. Australia scores around 61 and thus the Australian society can be considered as a masculine society. The behaviour in play, work, school are all based on the shared values and the people work hard and strive to be the best. Australians are thus proud of their achievements and success in life, and it is vital to mention that this very characteristic forms the basis upon which the promotion and hiring decisions are taken in a workplace. The conflicts are addressed at the individual level and the main goal is to win (Hofstede Insights 2018b).
Uncertainty avoidance- this dimension speaks that the degree up to which the members of a society or a culture get threatened with respect to the unknown situations and the presence of the institutions that avoid such beliefs. Australia thus scores a mediocre score of 51 in this dimension.
Long-term orientation- this dimension explains that in what way every society has to maintain its links with the past and how it deals with the challenges that arise in present and in its future. Australia scores around 21 and thus have a normative culture. People that belong to this society has a strong concern for the establishment of absolute truth. Australians respect for their traditions to great extent and focus on saving resources for the future, and the Australians also focus on the achieving the quick success.
Indulgence- this dimension deals with the degree up to which the people try to control their impulses and desires. In this dimension, Australians scores high of 71, and is thus called to be an indulgent country. People that belong to these societies exhibit a high chance of indulgence and the people are willing to realise their desires and the impulses so that they can enjoy their life and have fun. The people possess the positive attitude and have an inclination towards optimism. Along with it, they give high leverage to the leisure time and act as if they want to please themselves and spend money as much as they wish (Hofstede Insights 2018b).
Power distance- Japan scores an intermediate score of 54 and thus can be considered as a borderline society. Japanese people are always concerned of the hierarchical position and the social setting and thus act accordingly. Japan is found to be extremely hierarchical but not like the most of the Asian cultures that have more number of hierarchies. Experiences from revealing that the decisions are needed to be cleared by each hierarchical level and thus the decision making is slow. Another instance of Japan is that it is a meritocratic society and there exists a strong education system in Japan and the people have the belief that all are born equal and if a person works hard enough then he can get ahead of others (Hofstede Insights 2018c).
Individualism- in the individualism dimension, Japan scores 46. The society of Japan shows the characteristics of collective society. The opinions and views of a group are always put forward with respect to an individual’s views and opinions. Like the societies of Korea and China, that are more collective Japan does not have an extended society. It is important to note that the Japanese are considered by the westerns standards as collectivists and by the Asian standards as individualists. The Japanese are more reserved and private in comparison to the Asians.
Masculinity- In this dimension, Japan scores 95 and is considered to be one of the masculine societies in the world. It is, however, important to note that the generally it is considered that the competitive and assertive behaviour that is associated with masculine culture is not evident in Japan. It is seen clearly that the Japanese have the competing tendency between the groups. The Japanese children from a very young age learn to compete. With respect to corporate Japan, the employees feel motivated when they are placed on a winning team and pitted against their competitors. Masculinity is Japanese employees are seen for the purpose of perfection and excellence in the field of presentation, material services and material production in every aspect of life. The tendencies of workaholism are also seen a trait of masculinity, and it is still seen that it is difficult for the women to climb up the corporate ladders and also maintain the norm of long and hard long hours.
Uncertainty avoidance- in this dimension, Japan scored around 92 and is the most capable country that can avoid uncertainty on earth. This can be concluded from the fact that Japan is constantly threatened by the tsunamis, earthquakes, volcano eruptions and typhoons. Due to the constant threat from the natural disasters, the Japanese have learnt to prepare themselves for the uncertain situation. In corporate Japan, the majority of effort and time is put within the study of the feasibility and risk factors are worked out before the start of the project. The managers prefer to consult the employees before making any vital decision. The need for the uncertainty of the avoidance has led to the changes that are hard to realize in Japan (Hofstede Insights 2018c).
Long-term orientation- in this dimension, Japan scored around 88. In corporate Japan, it is seen that a high percentage of the fund is being put into the research and development sector even during the difficult times. More emphasis is put on the higher capital rate and steady growth of the market share in comparison to the quarterly profit. All these strategies serve for the durability of the concerned companies. The main idea of the companies is not to make money in every quarter for the shareholders, rather the main motive is to serve the society as a whole and the stakeholders.
Indulgence- Japan has a low score of 42 and it shows a restraint culture. The societies in this that belong to this dimension shows the tendency of pessimism and cynicism. In comparison to the indulgent societies, the societies that are restrained can control desires and also do not emphasize on their leisure time (Hofstede Insights 2018c).
Considering the Hofstede model for cultural difference, there are certain areas that need to be focused on considering the Japanese culture and the management style of National Australia Bank. The National Bank of Australia need to focus upon the is management strategies depending upon the power distance, masculinity, long-term orientation.
Power distance- considering this dimension, the organization is based on a hierarchical framework. The superiors are accessible always and the manager relies on the performance and expertise of the employees. Consultation and sharing of information are preferred by both the employees and the managers. However, the Japanese work culture is extremely focused on each of the hierarchical layer and this renders the decision making a lengthy process and this is one of the challenging areas. Masculinity- In this dimension, it is important to note that the Australians are proud of their achievements and the success and this is considered as a criterion for resolving the conflicts at the individual level. Whereas, in Japan, it is important to note that in the Japanese culture, it is hard for the female employees to climb up the corporate ladders and cannot cope up with the long working hours and working hard in all the situations. Thus, female employees will be recruited in less proportion (Nab.com.au 2018b).
Long-term orientation- In Australia, the people are more concerned about establishing the absolute truth and are normative in their thinking approach. Australians respect the traditions and a relatively small amount is saved for the future. Australians focus on achieving the quick results. Whereas in Japan, a lot of investment is high with to the research and development and the priority is on the steady growth of the market share. Companies focus on the society at large and stakeholders. Thus, management needs to focus on the management strategy based on long-term benefits (Nab.com.au 2018b).
International Human Resource Management (IHRM) are the activities related to an organization and is aimed toward managing the human resources at the international level, effective management for the purpose of achieving the organizational goals (Brewster et al. 2016). The tasks that are performed by the human resource management are the managing promotions, dismissal, performance appraisal, employee training and development, recruitment and selection, expatriate management and global skills management (Briscoe, Tarique and Schuler 2012). The main aim of IHRM is to achieve competitive advantage over the other competitors at the international and the national level. The IHRM manages the human resources of the multinational companies and it includes the management of the three different types of the employees:
Home country employees- IHRM involves the management of the employees that belong to the home country of the National Australia Bank. In this particular section, the employees are managed based on the culture that exists in Australia. In Australian culture, the employee management strategy needs to be hierarchies that will enhance the working capabilities of the employees. The employees are consulted and the information is shared frequently. The communication strategy is participative, direct and informal. The promotion strategies are based on the merit and evidence of the hard work. The employees are enthused to display initiative and are self-reliant. The employees are trained to resolve the conflicts at the individual level it becomes a promotion and hiring decision for the workplace. The human resource department can take the hiring and the promoting decisions based on the basis of achievement of the employees (Chung, Sparrow and Bozkurt 2014).
Host country employee- IHRM also involves the management of the employees of the National Australia Bank in Japan. In this particular section, the employees are managed based on the culture that exists in Japan. Due to the individualistic culture in Japan, the employees are promoted will all the necessary strategies with respect to employee retention and increasing employee loyalty. The employees stay motivated when they stay on the winning team and the female employee can be promoted to climb up in career through the gender equality. The managers can be trained to ask the employees before taking into account the figures and facts (Cooke 2012).
Third country employee- IHRM in this particular section deals with the management of the employee that is neither from the home country nor from the host country and is a citizen of a different country. The employee can be employed both in Australia or Japan. In this particular section, the employees are managed based on the culture of the company and its present location (Briscoe, Tarique and Schuler 2012).
Global citizenship is an idea which depicts that all people have the civic and the human rights and responsibilities (Dower and Williams 2016). It comes naturally to all the members of the world and this concept is irrespective of a particular place or nation. This idea means that a person has to show a sense of responsibility irrespective of his or her nationality (Cesario 2017).
Compliance with the international laws- when business begins to expand, there comes a need when a company tries to recruit more employees that belong from the different cultural background and geographical locations. This leads to the adaptation to the new tax liabilities and labour laws (Tarique, Briscoe and Schuler 2015).
Cultural diversity- a vital point of the IHRM is to maintain and understand the cultural diversity and working with the people that belong from different cultural background and location. Due to this, the HRM has to adapt the business styles that will be in accordance with the unfamiliar social practices new ideas, new types of communication (Story et al. 2014).
Benefits and compensation- compensation and benefits are one of the main aspects of HR strategies and this has led to the work-life balance of the employees that work in MNCs. Implementation of the compensation and the HR strategies has led to challenges for the international HRM (McGraw 2015).
Training and development- relating to the HR strategies with respect to the professional and training programs have led the HR managers to organize the meetings and in-house seminars to provide the employees with the on the job training (Stahl, Björkman and Morris 2012).
Employee relations management- interpersonal skills and the conflict management are the two strategies through which the employee relations can be managed effectively.
Interpersonal skills- effective communication is an art through which the relationships of the employees and as well as between the employer and the employee is maintained. Effective communication is the base upon which the managers try to manage and establish the human relations in a National Australia Bank when working with people that belong from diverse culture needs interaction and effort (Cascio 2018).
Conflict management- a manger that is trying to solve issues between two employees of between two groups, must first listen to both the parties carefully before arriving at a decision. Jumping to a conclusion and making hasty decisions is not the right good for the employees and for National Australia Bank (Roche and Teague 2012).
Pay and reward strategies- The HR managers typically specifies the rewards in terms of holiday packages, profit sharing, protection programs, employee recognition, increment, medical coverage, property and gift cards. The pay strategies of the HR in the National Australia Bank includes the pay structure based on the external market comparison, evaluation of the job role and the collective bargaining after the mutual agreement and the influence of the employee union (Armstrong and Taylor 2014).
Career development of the employees- the career development of the employees can be conducted on an annual basis and will include the individual development of the employees along with the discussion on a career. The HR managers can hold the supervisors responsible and accountable for the development of the employees. Creates the activities that emphasize on the job rotation, and skill development, career strategy group, coaching, internships, mentoring and cross-training. The HR managers in the National Australia Bank support the requests of the employees with respect to the flexible arrangements of work and also engaging the employees into the professional development of the opportunities and career development programs (App, Merk and Büttgen 2012).
National Australia Bank has branches in both the countries Australia and Japan and both the countries have different work culture and work environment. Both the countries have a differing effect on the labour laws and tax liabilities. This will obviously lead to change in cultural and the human resource management strategies in National Australia Bank. Certain aspects of the human resource management may not be applicable but in a broader aspect, the majority of the human resource management strategies are applicable. The human resource management is based on the certain foundational aspects and that will remain unchanged irrespective of the different country and different people (Kramar and Steane 2012).
Conclusion
From the above discussion, it can be concluded that the National Australia Bank is one of the best banks in Australia. It is an MNC that has its branches situated all over the world but specifically for this study, Japan has been considered. The two countries have different cultures and differing employee mindset, and due to this certain human resource strategy cannot be generalized due to differing cultures and different labour laws and tax liabilities. The National Australian Bank is an MNC and thus international human resource management strategies will be applicable considering the employees will now behave as a global citizen.
Reference
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