Human Capital Management Issues in Multinational Organizations

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,