Unit 5 Global Business Bba Notes

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INTERNATIONAL HUMAN

RESOURCE MANAGEMENT
MEANING, RECRUITMENT, SELECTION, PERFORMANCE APPRAISAL, TRAINING
AND DEVELOPMENT, COMPENSATION, PUBLIC RELATIONS
MEANING
• Human resource management (HRM) is defined as managing (planning,
organizing, directing and controlling) the functions of employing, developing,
compensating and maintaining human resources resulting in the creating and
development of human relation with a view to contribute proportionately
(due to them) to the organizational ,individual and social goals
• The term human resources can be thought of as, ‘the total knowledge skills,
creative abilities, talents and attitudes of an organization's workforce, as well
as the values, attitudes and believes of the individual involved’.
GLOBAL RECRUITMENT
• Recruitment means the searching for prospective candidates and stimulating them to
apply for jobs.
• Recruitment attracts a large number of qualified applicants who desire to work in the
company.
• The recruitment information given by the Global companies help the qualified candidates
who are willing to work to send their resume along with a letter expressing their desire to
work.
• It also helps the unqualified candidates to self select themselves out of the job candidacy.
• Accurate information provided by Global company attracts qualified and repels the
unqualified candidates.
• Thus recruitment helps the Global company in finding out potential candidates for actual
or anticipated vacancies in the company
GLOBAL RECRUITMENT
SOURCES OF GLOBAL RECRUITMENT

• 1. Parent country nationals


• Parent country nationals are employees (of a company or its subsidiaries located in
various countries) who are the citizens of the country where the company's headquarters
are located. Parent country nationals in international business normally are managers,
heads of subsidiary companies, technicians, troubleshooters and experts. They visit
subsidiary companies and operations :
• to help them in carrying out their operations
• to make sure that they Run smoothly
• to provide advice and control them
• However, sending parent country nationals involves cost and causes ego and cultural
problems. Hence, the North American companies stopped sending the parent country
nationals to subsidiary companies operating in other countries.
GLOBAL RECRUITMENT
SOURCES OF GLOBAL RECRUITMENT
• 2.Host country nationals
• Host country nationals are the employees of the company's subsidiary who are the citizens of the country where the
subsidiary is located
• employing host country nationals is advantageous as:
 they are familiar with native culture
 they are familiar with local business norms and practices
 they manage and motivate the local workers efficiently
 they are familiar with local bureaucrats market intermediaries and suppliers of inputs
 familiar with the taste and preference of the local customers
• However there are certain disadvantages with the host country nationals, these include
 they are not familiar with the objectives goals and strategies of the parent company
 they are unaware of the needs of the headquarters
 they review the company only from the local perspective rather than from the Global perspective
 it would be difficult to train the host country nationals due to the variations in the views about achievement equity
the work ethic and productivity of the host country nationals from those of the parent country nationals
GLOBAL RECRUITMENT
SOURCES OF GLOBAL RECRUITMENT
• 3. Third country nationals
• Third country nationals is an employee of a company's subsidiary located in a country, which is not his
home country. The software professionals of India who work in American subsidiaries located in various
countries of Europe are called third country nationals.
• for example Mr Akhil an Indian citizen is working for an American subsidiary in France. Mr. Akhil is called
third country National.
• The advantages of employing third country nationals include
 less cost with required expertise skill knowledge and Foreign Language skills
 less risk of employing an Indian 3rd National who speaks English fluently
 they have a cultural fit due to their work experience in multicultural environment
• However the local government may impose conditions and regulate in employing third country nationals
GLOBAL SELECTION
• Global Business firms need people with higher order skills, balance emotions,
ability to adjust to multicultural recruitment, etc.. Hence the selection process
of global companies varies from that of a domestic company. Now we study
the selection process of a global firm. Selection process includes selection
procedure, selection approach and selection methods

• Global selection approach


• Selection policy is vital in Global Business as it deals with various types of
people jobs and placement. In fact selection policy contribute for the
achievement of the strategic goal of Global Business that is ‘thinking globally
and acting locally’. There are three types of approaches followed in selection
policies in Global Business, they are
GLOBAL SELECTION
GLOBAL SELECTION APPROACH

• 1. Ethnocentric approach
• Under this approach parent country nationals are selected for all the key Management jobs. This approach
was widely followed by Procter and gamble Phillips Toyota etc. some of the international firms follow this
approach due to the following reasons
 non availability of qualified personnel in host countries particularly developing countries
 to maintain a unified corporate culture
 to transfer the core competencies of the company when the core competencies are held by the existing
employees of parent country nationals
• Disadvantages
 when important positions of the subsidiaries are filled with the parent country nationals, the staff of the
host country feel frustrated resulting in low productivity
 the subsidiary may fail to understand and respond to the host countries culture due to ‘cultural myopia’.
GLOBAL SELECTION
GLOBAL SELECTION APPROACH

• 2. Polycentric approach
• Under this approach the positions including the senior management positions of the subsidiaries are filled by the
host country nationals. The reasons for adopting this approach includes
 host country nationals are familiar with the culture of the country including business culture
 level of job satisfaction of the employees of the subsidiaries can be enhanced
 it is less expensive as the salary level of the host country National is lower than that of the host country nationals
in case of MNCs of Advanced countries
 it reduces overall cost of staff of subsidiaries
• Disadvantages
 this approach limits the mobility of employees among subsidiaries and between subsidiaries and the headquarters
 organizational culture of the parent company cannot be completely adopted in the subsidiaries
 culture of the subsidiaries and the headquarters cannot be exchanged as it isolates the headquarters from their
subsidiaries
GLOBAL SELECTION
GLOBAL SELECTION APPROACH
• 3. Geocentric approach
• Under this approach the most appropriate candidates are selected for job from any part of the globe .Global
firms follow this approach due to the following reasons
 to have the most appropriate human resources
 to develop the people with multi culture and meet the challenges of cultural diversity
 to build multi skilling as a core competency and transfer it to all the subsidiaries
 to avert the problems of Cultural myopia and enhance local responsiveness of the host country
• Disadvantages
 most of the countries insist that MNCs should employ their citizens .MNCs are allowed to employ foreign
nationals only in the rarest cases
 implementation of this policy takes time as the MNC has to train and develop the people in multi cultures
 implementation of this policy is also expensive
GLOBAL SELECTION
SELECTION TECHNIQUES FOR GLOBAL JOBS
• Global companies require the human resources adaptable not only to the job and organizational
requirements, but also to the emotions of the people of different countries of the world. As such, The
selection techniques for Global jobs vary from that of domestic jobs. Now we shall discuss the selection
techniques for Global jobs
 screening the applicant's background
 conducting tests to determine the candidates suitability to the job norms
 conducting test to evaluate the candidates suitability and adaptability to the new culture and
environment
 conducting tests to evaluate the suitability and adaptability of candidates spouse and family members
to the new culture and environment
 predicting the adjustment of the candidate his spouse and family members to the new job ,culture of
the company, country and the new environment
 The candidate should be asked question related to his adjustment, interaction with the host nationals,
technical competence, cultural Novelty, family situation, communication skills etc.
GLOBAL SELECTION
SELECTION TECHNIQUES FOR GLOBAL JOBS
• The company has to measure the candidate on various variables regarding adjustment. Variables to be
measured include
 Individual dimension the variables used to measure the candidates suitability in this area include
candidates self efficiency, relational skill of the candidates, perceptual skills of the candidates, job skills,
stress reduction skills
 Non work dimensions the variables to be measured in the dimension include cultural Novelty, host
country’s religions, social, cultural, sociological, historical, political and economic system. adjustment of the
candidate his spouse and family members to this new environment
 Job dimension the variables in this dimension include job duties, responsibilities, tasks ,etc. technical
competency, human relations skills at the workplace
 Organizational cultural dimension culture of candidate’s previous Organization in his home country,
candidate’s background of working in different organizations with different cultures, candidates ability to
adapt to the new organizations workplaces group norms and expectations
EXPATRIATES
• The employees of global companies mostly work and live in foreign countries and their
family members also live in foreign countries . Employees and their family members
working and living in foreign countries are called expatriates in the foreign country.
• Expatriates are those living or working in a foreign country. The parent country
nationals working in foreign subsidiary and third country nationals are expatriates.
Large number of expatriates normally have adjustment problems with the working
culture of the company, country’s culture, laws of the country etc..
• Some expatriate adjust themselves easily, while some others face severe problems of
adjustments. Such employees about their assignments and return to home country by
terminating their work contracts. Many Indian expatriate employees in Maldives could
not adjust to the culture and return to India before their assignments were completed.
Thus the major problem with expatriates is adjustment in the new international
environment.
EXPATRIATES
• International adjustment the international adjustment is the
degree to which the expatriate feels comfortable living and working in the
host culture. This influences job performance. The expatriate is completely
new to the host country environments, social rules, norms etc..
Expatriates have a strong desire to reduce psychological uncertainty in the
new environment. Psychological uncertainty is also called cultural
shock
• There are four stages
• 1. Honeymoon stage expatriate and his family members are fascinated by
the culture of the host country, the accommodation, transportation
facilities, educational facilities to the children etc. during the early stage of
arrival. This stage last up to 2-3 months period
EXPATRIATES

• 2. Culture shock stage the company takes care of the new arrivals and completely
neglects the previously arrived employee and his family after 3 months. During this
stage the employee has to take care of himself and his family members. Expatriate
gets frustrated confused and unhappy with living and working abroad. His social
relations are disillusioned during this stage. He gets the shock of the existing culture
• 3. Adjustment stage The Expatriate slowly learns the values, norms, behavior of the
people, their culture etc.. He slowly adjust himself to the culture of the foreign
country
• 4. Mastery stage the expatriate after adjusting himself with the culture of the foreign
country can concentrate on working efficiently. He Learns and adopts to the new
environment completely and becomes like a citizen. He behaves and functions like a
citizen at this stage
EXPATRIATES
• Dimensions of the international adjustment
• It has three degrees i.e. adjustment to the Overseas workplace,
adjustment to interacting with the host nationals and adjustment to the
general environment. there are four dimensions of adjustment that is
individual, non-work, job and organization culture
• 1. Individual dimension: It includes skills and capabilities that expatriate
possess. These skills include cross cultural skills. There are three sets of
individual skills:
• (A) Self efficacy skills
• (B) Relational skills
• (C) Perception skills
EXPATRIATES
• (A) Self efficacy skills :the expatriate should have self confidence, self-esteem and
mental hygiene. He should be able to keep mental and social health with a feeling of
being able to control or deal with surprises from the host cultural environment. Areas
of self efficacy are:
• (i) Stress reduction: It include abilities to deal with interpersonal conflict, financial
difficulties, variations in business systems, social alienation, pressure to conform,
loneliness, differences in housing climate etc.. These factors affect the expatriate job
performance. Expatriate should have an ongoing clear strategy to reduce the stress.
• (ii) Technical competence: it is an important factor that determines the degree of
employee adjustment in the foreign country.
• (iii) Reinforcement substitution: this skill involves “replacing activities that bring
pleasure and happiness in the home culture with similar, yet different activities that
exist in the host culture” The common interest would be sports, music, art, dance and
social groups
EXPATRIATES
• (B) Relational skills: It include expatriate’s ability, Desire and tendency to interact,
mix or involve and develop relationships with host nationals. This skills include
• (i) Finding mentors: the expatriates find the host nationals who have similar
interest and can guide them
• (ii) Willingness to communicate : the expatriate should make efforts to learn the
language as a means for familiarizing with the foreign nationals and their culture,
using proverbs, popular song, famous incidents from the history, jokes, information
about religion, sports of the host country, this is also called conversation currency,
this fastens the process of building relation with foreigners

• (C) Perception skills these skills include expatriates Ability to understand the
behavior of the host nationals, their practices, culture etc.. These skills reduce the
degree of psychological uncertainties associated with cross cultural experiences.
The expatriate should not view the host nationals as backward or stupid or
unsophisticated
EXPATRIATES

• 2. Non work dimensions


• (A) Culture Novelty: It includes differences in beliefs, values, norms,
religious faith. The degree of cultural Novelty is more, if these factors of
the host country vary much from those of the home country of the
expatriate
• (B) Family spouse adjustment: the employee may take a decision to
leave the host country before the contract expires, if the employees
spouse and family members fail to adjust to the host country’s culture.
Some of the Indian housewives fail to adjust to foreign culture
EXPATRIATES
• 3. Job dimensions
• the expatriate should have required skills knowledge and abilities to carry out
the job successfully in the host country. However certain factors help
expatriate’s adjustment in the host country, these are
• (A) Role clarity: it deals with the degree of clarity that the employee
understands the job duties: responsibilities, task demands and roles. High
degree of clarity reduces uncertainties and help the employee to adjust to the
environment quickly. In contrast, a low degree of clarity hampers the process of
employee adjustment
• (B) Role discretion: it is the degree of flexibility of workplace rules, regulations,
Expectations, procedures and policies. The expatriates role can be significant
and can influence others, if there is flexibility at workplace. Otherwise the
expatriate has to adapt himself to the rules at workplace
EXPATRIATES
• (C) Role novelty: it refers to the degree of distinctiveness of the
duties, responsibilities, tasks etc. of the new job compared to those
of the old job in the home country. The expatriate would feel it
difficult and take more time, if the degree of distinctiveness is high.
In contrast, the expatriate would take less time and feel it easy to
adjust himself to the new job if the degree of distinctiveness is low
• (D) Role conflict: it occurs when the expatriate starts receiving
conflicting signals regarding his role, duties, behavior and
performance levels from the people at work place. These signals
hinder The Adjustment process of the expatriate
EXPATRIATES
• 4. Organizational culture dimension: It is “pattern of basic assumptions-
invented, discovered or developed by a given group as it Learns to cope with its
problems of external adoption and internal integration that had worked well enough to
be considered valuable and therefore to be taught to new members as the correct way
to perceive, think and feel in relation to those problems.”
• Every organization has its own culture with different rules, regulations, customs,
traditions, norms, expectations etc.. The expatriate is informed of the organization
culture. They should learn culture of new Organization in the foreign country
• Culture of the new organization is novel and it is close to the cultural Novelty and role
novelty. The expatriate may find it difficult during the early days of his assignment due
to the cultural Novelty. Slowly he Learns the organizational culture and adapt himself to
the new organizational culture
• The expatriate feels that he is a member of the large corporate family when he is
provided with housing, medical, conveyance, schooling for children, shopping
information and such other facilities
PERFORMANCE APPRAISAL
• Performance appraisal is a method of evaluating employee behavior relating to
expected work and behavior normally including both the quantitative and
qualitative aspects of job performance. Performance refers to the degree of
accomplishment of the tasks that make up an individual's job
• Appraising the employee performance on foreign jobs is a highly complicated task
as the Expectations of the Global company are multifarious. In addition employees
of various countries view the meaning of jargons quite differently. Added to this
work related practices organizational culture and job dimensions vary from
country to country . Hence Global company should take due care in appraising the
performance of employees
PERFORMANCE APPRAISAL
• Objectives:
• to create and maintain a satisfactory level of performance to contribute
• to the employee growth and development through training
• to guide the job changes with the help of continuous ranking
• Appraisers
• they may be any person, who has a thorough knowledge about the job content, the
content to be appraised, standard of content and the one who observes the
employee while performing a job,
• typical operations are:
• Supervisors, peers, subordinates, consultants, customers (internal or external),
users of services
PERFORMANCE APPRAISAL
METHODS OF PERFORMANCE APPRAISAL

• Traditional methods:
• Modern methods
 graphic rating scale
 behaviorally anchored ranking scales
 ranking method
 assessment centers
 paired comparison method
 human resource accounting
 forced distribution method
 Management by objective
 check list method
 psychological appraisal
 essay or free from appraisal
 group appraisal
 confidential reports
PERFORMANCE APPRAISAL

• Performance Appraisal in global companies


• Appraising the performance of expatriate employees objectively is very
difficult. Performance appraisal of expatriate employees is done by both
host Nation managers and home country managers. The host Nation’s
managers may be Biased due to their cultural frame and Expectations.
• In order to reduce the problem of performance appraisal, the US
companies give more weightage to the self appraisal done by the foreign
employees for himself rather than by the superiors. Home country
managers also rate the Employees with a bias due to lack of face to face
interaction.
PERFORMANCE APPRAISAL

• 360 degree performance appraisal


• It refers to the performance appraisal of an employee by his superiors,
subordinates, peers, customers, consultants and users of his services.

• Guidelines for performance appraisal: the following guidelines help to solve the
problem of performance appraisal of expatriate employees.
more weight should be given to the rating of the onsite managers appraisal
due to proximity
host country managers should also give the weight age to the culture of the
expatriate employees
due weight should also be given to self appraisal
TRAINING AND DEVELOPMENT

• After the candidate is selected and placed on the job he must be


provided with adequate training and development facilities.
Training is the act of increasing the knowledge and skill of an
employee for doing a particular job.
• Development is a systematic process of growth and by which the
executive develop their ability to manage. In fact executive
development/ education has become global.
TRAINING AND DEVELOPMENT

Importance of training and development for Global Jobs


• improve job knowledge and skills at all levels of the organization
• improve moral of the human resources
• improve profitability and more positive attitude towards profit orientation
• improve relationship between boss and subordinates
• improve understanding of culture of various countries
TRAINING AND DEVELOPMENT

Need for training and development for Global Jobs


• to match employee specification with the job requirement and organizational
needs
• to achieve organizational viability and the transformation process
• to meet the challenges of technological advances to understand the
organizational complexities
• to make the employee and his family members familiar with the language
customs traditions etc. of the foreign country
TRAINING AND DEVELOPMENT
Cross cultural training
• Cross cultural training enables the expatriate to learn the cultural norms values attitudes belief’s
behavior practices of the host country. It is essential to make the new employee to adjust with the
new culture of the job company and host country.
• The expatriate after training can use this cross cultural knowledge to behave according to the
cultural requirement of the host country. Do in Rome as the Romans do holds good here.
• The trainee expatriate can transfer the knowledge gained in the training program into new cognitive
and physical behavior. This process give the trainee more satisfaction in the foreign assignment
• Some companies do not train their expatriates due to the following reasons:
 brief cross cultural training programs are in effective
 the failure of such programs in the past resulted in employee dissatisfaction
 lack of enough time between selection and departure
 high cost of training
TRAINING AND DEVELOPMENT

Content / Approaches of the cross cultural training


 Information of fact oriented training
• the training program provides the expatriate training with the information and facts of
the country like countries economy, resources, languages, social groups, currency, climatic
conditions, eating, dressing habits, housing, banking, insurance, medical facilities etc.
• Training methods includes lectures, video tapes, reading materials, pamphlets etc.
 Attribution training
• This training provides the reasons or causes for the behavior of the people of the host
country. Goal of this training is to understand the value, norms and perpetual maps. The
expatriate are encouraged to adapt their behavior to the norms of the host country.
TRAINING AND DEVELOPMENT

Content / Approaches of the cross cultural training


 Cultural awareness training
• This training is to provide the common values, attitudes and behavior in the host
countries culture. This makes the trainees to understand how culture affects the
behavior of the people of the host country.
 Cognitive behavior Modification training
• This training provides the information regarding the behavioral practices which result
in getting rewards or punishments in the host country. Then the trainees compare the
reward or punishment practices in the home country and host country and formulate
their Strategies for their behavior in order to maximize rewards and avoid
punishments in the host country
TRAINING AND DEVELOPMENT
Content / Approaches of the cross cultural training
 Experimental training
• The expatriates in this programme are exposed to real life situations through field
visits, visits to the host country, Complex role plays and cross-cultural simulations. This
gives the trainee the real life experience. Training techniques like lectures, area
briefings, reading materials, video films, classroom language training, case studies,
sensitive training, role plays, field trips, simulations, interactive language training,
cultural assimilators
 Rigorous training
• Some training techniques like role plays simulations need rigorous training while other
techniques need mere participation of the trainee in the program
TRAINING AND DEVELOPMENT

Content / Approaches of the cross cultural training


 Job Novelty
• expatriate training needs rigorous training and more assistance if the job is more
novel . the novel job would be challenging and therefore the expatriate needs to be
trained in the cross cultural managerial skills necessary to do the job efficiently
 Interaction with the host nationals
• if the degree of interaction of the expatriate with the host country’s customers
workforce government officials suppliers bankers industry leaders and the like, is
high, the training should be rigorous
COMPENSATION AND BENEFITS
• Compensation is the amount of remuneration paid by the employer to the employees
in return to their services and contributions to the company. Compensation is the
most important factor in the entire Human Resource Management process.
Compensation includes the amount of salary, the different kinds of fringe benefits and
employees welfare benefits, bonus, profit sharing stock options and the like.
• Number of factors affect the compensation policy of global companies. The important
among them are compensation levels in the comparable Global companies, company's
ability to pay, cost of living in various countries, employee productivity, trade union’s
pressure and strategies
• Global companies give a number of benefits to its employees in addition to the salary.
These benefits include: airfare, paid leave, medical allowance, conveyance allowance,
educational allowance for employees children, gratuity, resettlement allowance,
profit sharing, employees stock options etc.
COMPENSATION AND BENEFITS

• Compensation in global companies


• Compensation is the amount of remuneration paid to the Employees. The two issues
involved in compensation management are: national economic differences and
payment practices. The second issue is the mode to payment to expatriate managers.
There are significant differences in the compensation levels and structures among
different countries. This is because, the firms pay the executives of various countries
based on the local compensation levels.
COMPENSATION AND BENEFITS

• Compensation in global companies


 Expatriate pay
• Expatriate pay is mostly based on the balance sheet approach. Under the balance sheet
approach, the compensation package enables the expatriate employees in various
countries to maintain the same standard of living. This approach also provides for
offsetting quantitative differences among employment locations.
 Gratuity:
• Expatriate employees are paid gratuity at a fixed rate for every year of completion of
service in the foreign country. Gratuity is the inducement to the expatriates to work for
quite longer period in the foreign country.
COMPENSATION AND BENEFITS

• Compensation in global companies


 Allowances:
• Expatriate employees are paid various allowances like car allowance, resettlement
allowance, housing allowance, hardship allowance, cost of living allowance,
education allowance, medical allowance etc.
 Taxation :
• Some countries pay tax free salary and tax free gratuity. Most of the countries pay
taxable salary and gratuity.
COMPENSATION AND BENEFITS
• Profit sharing and Employee Stock Ownership Plan
• The multinational corporation in order to motivate the employees for higher performance
introduced a scheme of profit sharing. Under this scheme workers get a right to have a
share in the net profit of the company, if the profits cross a certain limit. This provision
motivates the employees to improve production, sales and profits.
• Multinational corporations also introduced another plan to motivate the employees and to
retain them. The expert and efficient employees go on shifting to the other organizations
which Pay higher salary and offer better facilities. This problem is more acute in software
and information technology firms. These companies introduced the ESOP, in order to
reduce employee turnover and retain them in the company.
• ESOP allows the employees to purchase the share or stock of the company at a fixed and
reduced price. Employees are motivated when the company allows them to buy the shares
at concessional price. Stock ownership is viewed as performance based incentives. This
plan is described as “Golden hand cuffs”
COMPENSATION AND BENEFITS

• Advantages of stock ownership include


 this plan links compensation package closely to performance
 the plan enables the MNCs to retain efficient Employees with them
 it encourages the employees to improve their performance
 this scheme establishes significance of team effort among employees
 it increases employee involvement and participation
INDUSTRIAL RELATIONS
• Industrial Relations mean the relationship between employees and
Management in day to day working of industry. Industrial Relations is a whole
field of relationship that exists because of the necessary collaboration of men
and women in the employment process of an industry. Industrial relation is
the complex relations among the following parties: employees, employees
Union, employer, employers Association, government
• Industrial Relations is the outcome of the practices of Human Resource
Management. In fact Industrial Relations outcome provides the basis for
reformulation of human resources management policies. The important areas
of Industrial Relations are -trade unions, grievance procedure, disciplinary
procedure, collective bargaining, industrial conflicts including strikes and
lockouts, workers participation in management, quality circles, Quality of
work life, profit sharing and employee ownerships /employee stock option.
INDUSTRIAL RELATIONS
• International scenario of Industrial Relations
• Trade unions generally represent the worker’s problems in collective bargaining. In most
of the countries including India, USA, UK, Japan etc. Trade unions negotiate with the
management representative in collective bargaining in order to reach collective
agreement and see that the management implements the agreements. However trade
unions fail to influence the management for fair labor practices.
• But this Responsibility in Germany is taken up by works councils comprised of both
employees and employer representatives. The work councils have the responsibility of
collective bargaining at the organizational level only. However at the industry level, the
trade unions take the responsibility of collective bargaining. Work councils decide upon
various issues like - Working conditions, standard of employee conduct and wage rates
• Unsolved issues at work councils level are settled through arbitration work councils in
Germany are more powerful with strong view that employees and employers have a
common welfare.
INDUSTRIAL RELATIONS
• Industrial Relations strategies of MNCs
• Multinational corporations have to deal with the employees of various countries with
varied cultural, social, political and religious environments. The industrial relations
strategy of the MNCs are mostly applied to the environment of only one country and it
has to formulate another strategy for another country.
• Industrial Relations are seen in the larger interest of social class struggle in Switzerland,
France and Italy. In most of the other countries this is seen only as the relationship
between workers and Management.
• MNCs decentralize their Industrial Relations policies and practices. MNCs use the
strategy of relegating the Industrial Relations problems like work stoppages, strikes etc.
to the specialist in the various countries. Employees working in various subsidiaries of
MNCs formed International Trade union
• Quality circles
• It is a small group of employees in the same work area or doing similar type of work
who voluntarily meet regularly for about an hour every week to identify analyze and
resolve work related problems not only to improve quality productivity and total
performance of the organization but also to enrich the quality of work life of
employees

• Participative management
• It is a system of communication and consultation either formal or informal by which
employees of an organization are kept informed about the affairs of the undertaking
and through which they express their opinions ideas suggestions contribute to the
development of alternative solutions evaluate them and help the management in
decision making.

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