Multinational Companies: Uniformity vs. Differentiation in HR Policies

This report explores the factors that influence whether multinational companies (MNCs) adopt uniform HR policies across their subsidiaries or tailor them to local contexts. It identifies communication barriers, cultural differences, government pressures, and customer purchasing power as key determinants. The report emphasizes that communication barriers significantly impact productivity and coordination within MNCs. Cultural differences necessitate flexible HR policies that respect local values and norms. Government regulations and variations in customer purchasing power further drive the need for differentiated approaches. The analysis highlights the challenges MNCs face in balancing uniformity and differentiation in their HR practices, ultimately concluding that a nuanced approach is essential for effective global human resource management.

Globalization and Human
Resource Management

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
Discuss factors which might influence whether multinational companies (MNCs) are more
likely to attempt to follow uniform HR policies across different national subsidiaries, or to
follow different policies in different places................................................................................3
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
The human resource management is refer to the strategic approach which is used by
organization for run their activities in smooth manner. With help of effective utilization of
talented people organization easily sustain their competitive advantage in market. The main role
of human resource management is to maximise the performance of lower level employees
effectively. The HRM is also defined as the practice hiring, recruiting, managing and depolying
the workers of organization. The report will covers various factors which might influence
weather multinational companies are more likely to follow uniform HR policies across different
national subsidiaries or to follow different policies in different places.
TASK
Discuss factors which might influence whether multinational companies (MNCs) are more likely
to attempt to follow uniform HR policies across different national subsidiaries, or to follow
different policies in different places
According to Wesley Chai, the human resource management is basically a practice of
hiring, recruiting and managing all categories of employees within organization (Anwar and
Abdullah, 2021). The HR department of organization is responsibe for putting, creating, into
effect and overseeing policies governing employees and the relationship of company withits
workers. During the time of preparing various policies HR consider various points as an factors
which are influencing them.
The factors which is responsible for influencing multinational companies to follow different
policies in different places are -
 Communication barriers – It is the biggest factor which is highly influenced the
multinational companies to follow different policies in various places. Because
communication barriers influenced the productivity of workers with in company. The HR
management of multinational firms are faced various problems in dealing with workers
due to having different languages and culture. Due to keeping poor communication or
coordination organizations are able to deliver best quality product to customers for long
time. Therefor, for reducing this type of issue it is necessary for various organization that
they must provide strong and effectivce training to their employees regarding language.
With help of effective training employees easily received the knowledge of various

languages which leads to sustain effective positive relationship between employer and
employee for long time. Due to developing effective communication various
organizations are able to identify the real needs and wants of their employees and
customers quickly. In this way the department of HR is able to facilitate effective
solutions to their employees which leads to increase their overall performance and
productivity for long time.
 Cultural differences – The culture is very essential part of any country, and the values
and norms of people or lower level employees are mainly associated with their cultures
(Crowley-Henry and Al Ariss, 2018). For overcoming the issues of cultural differences,
the multinational cooperation utilized the strategy of developing different policies of
human resource at different locations to cop with the difficulty of cultural difference
among employees across the national boundries. Due to having cultural difference in
various locations it is necessary for all multinational companies that they must develop
flexible policies for their employees regarding leaves, festival holidays and other aspects.
Due to developing these type of policies the management of international company is
sustained positive relations with lower level employees for long time. With help of using
various HR policies the values and ethics of employees are easily protected for long time.
For various employees values, culture and ethics are matters a lot because all these
elements are directly connected with their life. All these elements are highly essential for
living the life decently and due to considering all these elements effective communication
are easily maintained between employee and employer for long time. The legal problems
are also effect the policy of human resource. For instance, the liabilities problems in
differet countries resist the transfer of knowledge and data and practices which directly
effect the policies of HR.
 Pressure from the government – It is also one of the factor which is responsible for
influencing multinational companies for keeping differentiation in their policies in
various locations. That means in every country or locations, the actitiviites government
are totally different in various aspects which includes rules regulations, interest rate,
taxation system and others. Therefore, it is necessary for all multinational companies that
they must develop various policy according to the guidelines of government such as
employee health and safety law. Due to preparing that type of policy organization easily

maintained strong connection with the government and in this way pressure are easily
decreased for top level management in their job. With help of decreasing the pressure of
government organization is able to produce best or standard quality goods according to
requirement of customers for long duration. Due to the effective utilization of various HR
policies such as employment law at employees are able to do their job with full interest
and passion and also able to reduce risk in their business activities effectively.
 Purchasing power of customers – It is also one of factor which is responsible for
influencing multinational company to develop effective HR policies. Because in every
location the purchasing power of customers are totally different (Iqbal, 2020). Here
customers are divided into two parts first one is online buyers and second one is offline
buyers. Therefore, it is necessary for MNC that they must implement beneficial schemes
and offers through online mode and offline mode which leads to attract the customer in
large number for buying their product. Due to facilitating beneficial schemes and offers
the revenue of company are highly increased within low time. In this way the goodwill of
multinational companies are effectively maintained in various locations for long time.
The best example of HR policy is that return and exchange policy and providing
discounts in products. Due to the effective utilization of these policies multinational
companies are able to sustain their profit margin at maximum level in various locations
for long time.
From above evaluation it has been analysed that the multinational companies faced
various types of challenges in the practices of HR and also faced difficulties for deciding
whether to practice of differentiation or uniformity. The research shows that there are few factors
which are responsible for influencing the practices of management in internaational companies.
The main factors which are identified in this study are cultural differences, communication and
language barriers etc. From the above mentioned factors which is highly threatful for big
company is communication barrier. Because without proper communication organizations is not
able to enhance the awareness of their goods and services effectively in market and in customer
mind. As a country from where company is emerged or the host country is majorly concentrating
on the local interest rather than the integration of global economy, thus it interact the
differentiation in policy. The language and cultural barriers are also identified as important
factors which influenced the international human resource practices as the differences in culture

and languages creates practices same corporrate culture and structure. The study found that the
differences in culture directly influenced policies of HR like UK have different values and norms
for the organizational practices as compared to the practice of Japan. The Japan appreciated
people to work with equal timings while the UK considered the overtime as added value
according to the skills and ability of workers. The culture of difference also have major effect on
the legal problems. Due to the effectiveness of HR, the positive relationship between employer
and employee are easily sustained for long time. The other responsibility of HRM is to train the
employees in effective manner which leads to sustain their goodwill in market for long time. Due
to the support of HR department company is able to sustain their performance and productivity
for long time (Järlström, Saru and Vanhala, 2018). Globalization is connected with various world
economies and paved the way for global businesses to flourish across boundaries. Coupled with
digitalization, it has grown manifold in the past few decades worldwide. It refers to all the cross
border transactions of goods, capital, technology, managerial knowledge, and services that take
place between two or more countries.

CONCLUSION
From the evaluation of above information it concludes that the department of HR played
the major role in the various functions of organization. Due to the effective functioning of human
resource department, their resources are utilized in optimized manner which leads to increase
their profit at large level. The report will be covered various factors which might influence
weather international organizations are more likely to follow uniform HR policies across
different national subsidiaries or to follow different policies in different places.

REFERENCES
Books and Journals
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