Term Paper, 2006
17 Pages, Grade: 1,3
2 Centrally developed HRM policies
3 Implementation and Control of a Central Training Policy
3.1 Introduction of the Principles
3.2 How to Manage Adherence of the Policy
3.2.1 Personal Controls
3.2.2 Bureaucracy controls
3.2.3 Output controls
3.2.4 Cultural controls
5.1 Hofstede’s Cultural Dimensions
5.2 Trompenaar’s Cultural Dimensions
List of Abbreviations
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In general, most of Multinational Corporations (MNCs) with worldwide operations face the same problem of standardisation vs. customisation. On the one hand, MNCs have to meet the need for reaping scale economies and cost reductions and on the other hand they have to be close to the customer and locally responsive to different cultures and tastes which usually raise costs. When it comes to human resource management (HRM), the question arises whether to transfer and apply centrally developed HRM policies and practices in all its operations or to delegate decision making authority to the subsidiaries enabling them to develop entirely decentralised approaches. A hybrid approach can be chosen by implementing central HRM policies that can be applied consistently worldwide and to give responsibility to its subsidiaries in e.g. culture sensitive areas which have to be adjusted to local circumstances.
This assignment focuses on training and development issues of a multinational manufacturing company with subsidiaries in 12 countries worldwide and 3,600 employees. It proposes areas where policies should be developed centrally and explains why it should be the central management’s responsibility (Chapter 2). Chapter 3 recommends a way to introduce and to manage adherence to the principles of a centrally developed training policy.
Trompenaars (1993) and Hofstede (1980) ranked different cultures on cultural dimensions (see Appendix) in order to show differences that exist by comparing countries or clusters on a worldwide basis. Especially their findings should be taken into account when a company considers transferring HRM policies and practices to foreign subsidiaries (Luthans, et. al., 1997).
In order to determine what can be easily transferred to subsidiaries and what has to be customised in order be successful, it is important to distinguish strategies, policies and practices when it comes to the question of cross-cultural transfers of HRM. In general, it is easier to transfer HRM strategies and policies to host countries than HRM practices (Tayeb, 2005: 146). Tayeb (1998: 336) states that whereas multinational companies may find it feasible to have company-wide strategies and policies of a global or ethnocentric nature, they might find it necessary to be responsive to local conditions when it comes to HRM practices and therefore adopt a polycentric approach.
Tayeb (2005: 146) illustrates this issue with the following example:
Strategy: “We need to increase employees’ productivity”
Policy: “We should give higher rewards to high performing employees, in order to implement this strategy”
Practices: a) “In our Japanese subsidiary, performance appraisal should be discrete and based on team productivity records”
b) “In our American subsidiary performance appraisal should be explicit and based on individual employees’ productivity records”
This example shows that, whereas strategies and policies developed at headquarters can be transferred to countries with different cultures, the implementation of corresponding practices requires the consideration of cultural differences and preferences and, thus, practices have to be adapted and modified (Tayeb, 2005: 146).
In the following sections, central training and development policies are considered in more detail which can be applied consistently wherever the company operates. Practices derived from these centrally developed policies will be customised to local cultures, education systems etc.
Cultural issues have a very strong impact on training practices in different countries. In countries where power distance is low (e.g. USA or Sweden), relationships between trainers and trainees are more egalitarian, they use first names, and trainees fell free to challenge what the trainer says. Malaysia, for instance, ranks high on power distance and, thus, trainers receive more respect. Trainees use surnames and titles and the trainer is regarded as an expert and should not be questioned. (Treven, 2006: 122). Notwithstanding some cultural differences, centrally developed training policies can be applied consistently worldwide.
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