January 10th, 2018
Recruitment challenges in a Global workplace – continuation
One such challenge would relate to the identification of potential applicants hence allowing the formulation of a strategy that seeks to draw their attention to the vacancy. Though an argument could be that the vacancy should attract as much of the qualified applicants as possible, the conditions surrounding the need for the employee could complicate the decision process. One such example would relate to whether and when a multinational corporation (MNC) should export expatriates to oversee their foreign subsidiaries or seek such services from nationals (Harzing, 2001). From early studies three types of MNC’s had been identified. First of these were those that reserved all key vacancies to origin country nationals (ethnocentric); secondly those where positions in subsidiaries are filled by host country nationals (polycentric); and finally where positions are filed on the basis of qualifications irrespective of nationality – geocentric (Perlmutter, 1969; Collings, Morley & Gunningle, 2008).
Each of these decision alternatives might present its advantages and disadvantages. For instance the export decision could be preferred when there is a need for improved communication between the holding and subsidiary (agency problems), controlling operations of the subsidiary or when global awareness is needed (Harzing, 2001; Collings, Scullion & Morley, 2007 ). However in relation to expatriates providing the ability to control the operations of the subsidiary to MNCs; only those with “adequate cultural knowledge of the host country” seem to contribute whereas those without such knowledge do not offer control ability to the MNCs (Paik & Sohn, 2004). Further host country nationals (HCNs) and third country nationals (TCNs) have been noted to play a significant role in staffing of subsidiaries in companies that bear a strong centralized control (Collings, et al. 2008). These observations give advocacy for the need to use managers who are nationals.
Management of subsidiaries via HCNs bears a number of advantages. First it is expected that nationals would have a better understanding of the local market and probably would reduce the costs as compared to expatriates (Harzing, 2001). Secondly such nationals would avoid the costs associated with adjustment difficulties that could arise when cultural distance between host and origin country is high (Harzing, 2001). Other studies however argue that costs such as ex post transaction costs could be lower for the expatriates than for the nationals (Benito, Tomassen, Bonache-Perez & Pla-Barber, 2005). But empirical analysis shows such costs decrease with increasing managerial experience whereas increase in cultural differences between host and home countries aggravates these costs (Benito, et al. 2005). These arguments imply that the key factor that determines such decisions would be managerial experience and costs. Such could also be derived from the observations that MNCs are abandoning traditional expatriate recruitment structure in favor of short-term assignments (Tahvanainen, Welch & Worm 2005). Success of such an approach in solving international staffing challenges would however relate to the assignees’ ability to effectively bridge the cultural difference between host and home countries (Tahvanainen, Welch & Worm 2005). Cultural distance thus could be argued to the main limitation in use of expatriates for foreign duty.
Cultural distance between home and host countries has been widely debated in literature. At the basis of the debate are cultural dimensions provided by such researchers as Hofstede and Trompenaars (Alessandra & Brennan, 2009). Though national cultures may be a mixture of varied sub-cultures thus hard to generalize (Jacob, 2005); these provide pointers to convergent and divergent aspects of culture that impact on business decisions such as expansion to foreign markets (Alessandra & Brennan, 2009; Ghemawat 2007). A challenge to human resource managers would thus be to develop a workforce and management that takes into account the cultural aspects that could affect the performance of MNCs. On the other hand; globalization has increased labor mobility that workforce diversity is common place in modern day organizations (Seymen, 2006). Human resource managers are thus not only faced with the challenge of ensuring that cultural aspects are appropriately addressed in recruitment but also that workforce diversity is effectively managed at the work place to ensure better outcomes for the entity. Such implications then factor into the talent management approaches that the entity has put in place.