Human Capital Management Issues in Multinational Organizations

This paper discusses the human capital management issues faced by AGC due to lack of acceptance of cultural differences among different subsidiaries. It highlights the various leadership styles in global teams and suggests a human capital management goal that can be adapted by AGC. The paper also recommends a module on cultural sensitivity in the induction and training module of all employees to improve employee retention across different teams.

Introduction
One of the biggest challenges before multinational organizations is to embrace globalized work
culture without ignoring cultural differences across teams. The present paper deals with the
human capital management issues being faced by AGC due to lack of acceptance of cultural
differences among different subsidiaries. The paper also highlights the various leadership styles
in global teams and how they can be used to manage global subsidiaries in a better way. The
present paper also suggests a human capital management goal that can be adapted by AGC.
Issues caused by cultural differences
Multi-cultural organizations get a large part of their benefits from operating in a diverse
environment (Rozkwitalska, 2013). However, while doing so, they witness a lot of cultural issues
across different subsidiaries. Many a times management of companies like AGC assume that in
order to become truly global, they have to have standardized policies for all subsidiaries and do
not take into account cultural differences. Overseas subsidiaries often face like communication
ambiguity arising out of cultural differences among teams of host country and headquarters. Also
in a case like AGC, where leadership is taken from head office, it might lead to problems due to
stereotypes in the minds of both leaders and employees due to their cultural beliefs (Pudelko,
2011). Similarly, there can be organizational barriers. Sometimes such differences can lead to
loss of productivity as the subsidiary teams feel neglected and not being given due importance
due to their unique working style.
Leadership styles and organizational culture
From the scenario of AGC, it can be considered that company is facing problems due to the rigid
nature of top management. Leadership is very crucial in managing global human capital. Leaders
can influence the corporate culture by making their followers adhere to desired set of norms of
the organization (SKLEIN, WALLIS, & COOKE, 2013). There are various types of leadership
styles like transactional, transformational, Laissez-faire Leadership etc. In case of
transformational leadership, leader makes the followers identify with the corporate vision and
objectives and help them achieve these objectives. On the other hand laissez fair style of
leadership is not much effective since the management does not indulge in meaningful dialogue
with employees and make them work towards organizational objectives (Gholamzadeh,

Khazaneh, & Nabi, 2014). Transactional leadership also leads to increase in productivity as
leaders use the threat of punishment or lure of reward to achieve the objective.
Recommendation
AGC will have to work on improving the employee retention across the different teams. Shawn
should recommend a module on cultural sensitivity in the induction and training module of all
employees so as to achieve the goal of retaining the talent of the organization across the different
subsidiaries. This will help in reducing the conflicts in the teams as well as help in making the
top management understand the importance of cultural adaptability in different subsidiaries. It
will also help in saving retraining cost, thereby improving the financial position of the company.
Conclusion
In order to prevent numerous issues which can come up in case AGC leadership does not accept
cultural differences among various subsidies, it should launch a company-wide culture-
sensitivity training module. Along with that company leadership should make efforts to make the
organizational culture more focused towards understanding the unique cultures of various
overseas subsidiaries.
Works Cited
Gholamzadeh, D., Khazaneh, A. T., & Nabi, M. S. (2014). The impact of leadership styles on
organizational culture in Mapsa company. Management Science Letters , 2161-2170.
Pudelko, M. (2011). Cultural and Institutional Sources of Conflict in Foreign Subsidiaries of
Multinational Corporations. Schmalenbach Business Review , 3, 117-137.
Rozkwitalska, M. (2013). Effective Cross-Cultural Relationships in Multinational Corporations.
Foreign Subsidiaries' Viewpoint. 3rd Annual International Conference on Business Strategy and
Organizational Behaviour , (pp. 65-74).
SKLEIN, A., WALLIS, J., & COOKE, R. A. (2013). The impact of leadership styles on
organizational culture and firm effectiveness:An empirical study. ournal of Management &
Organization , 19 (3), 241-254.