Page 169 - DMGT548_GLOBAL_HRM

Global HRM

Notes Self Assessment

State whether the following statements are true or false:
1. Corporate identity is important to generate a feeling of belongingness among employees.
2. Mode of operation affects the MNCs ability to transfer HR practices abroad.

3. There is not connection between the number of expatriates and the transfer of multinational
work practices.
4. The standardisation adaptation choice that confronts the multinational in other areas of its
operations applies to the management of the global workforce.
5. Culture does not affect values and attitudes towards behaviour.
6. Corporate identity enables unity of purpose to be achieved.

7. Cultural distance also affects the degree to which work practices require adaptation.
8. Ownership and control are factors that need to be taken into consideration while MNCs
opts for the standardisation of work practices.

9.2 Retaining, Developing and Retrenching Staff

Cost considerations by multinationals have resulted in development of mobile factories as they
move in and out of countries as changing circumstances dictate.

Example: The US-based data technology company Seagate closed one of its Irish plants
in 1997 despite having been in operation for only 1 year. Seagate repaid the Irish government
the $16 million it had received in grants to establish the Irish plant instead. It increased the size
of its Malaysian plant to capitalise on the fall in value of the Malaysian currency. At the time
Seagate had 30% of world disk drive market, employing 108,000 people worldwide.
Unit labour costs and skilled labour are important considerations and markets that provide a
large pool of highly skilled, yet relatively cheap labour are doubly attractive. India is one such
market.

Example: Despite a recent slump due to the collapse of the ‘dotcom’ boom, the
information technology industry in India is regarded as attractive owing to its workforce
composition–highly educated, skilled programmers and software engineers who earn a fraction
of the salaries of their US counterparts. To capitalise on this cost advantage, US firms such as
IBM, Hewlett-Packard and Electronic Data Systems have outsourced software development to
Indian suppliers.
Other multinationals, such as General Electric, have used the availability to speak English with
accents and idioms so that US, UK and Australian customers are often unaware that their ‘local’
call has been diverted to a call centre in India.

Notes In the Chinese context, the role played by network connections called guanxi:
dyadic personal relationships between people. These relationships bear similarities to the
Western practice of networking but there are differences— guanxi are contingent upon

Contd...

164 LOVELY PROFESSIONAL UNIVERSITY