Millennial Employees in Multinational Corporations. Opportunities and Challenges of Generation Y in the Workforce

Seminar Paper, 2019

27 Pages, Grade: 1.3


Table of Contents

List of Abbreviations


1. Introduction

2. Literature Review
2.1. Characteristics of Millennial Employees
2.1.1. Differences between the Baby Boomers, Generation X, and Millennials
2.1.2. Work Values of Generation Y Compared to Previous Generations
2.2. Human Resource Management in Multinational Corporations
2.2.1. Trends in Global Human Research Management
2.2.2. Diversity in Multinational Teams and MNCs
2.3. Millennial Employees in MNCs
2.3.1. Work Values of Millennial Employees in MNCs
2.3.2. Diversity and Generational Differences in MNCs
2.3.3. Impacts of Digitalization for the Workforce in MNCs

3. Discussion
3.1. Theoretical Implications
3.2. Managerial Implications
3.3. Limitations and Future Research Suggestions

4. Conclusion


List of Abbreviations

Abbildung in dieser Leseprobe nicht enthalten


This seminar paper aims to answer the question how Millennial employees will impact multinational corporations and which challenges and opportunities arise from integrating this generation into workforce. In order to do so, this paper examines current literature on Generation Y and generational differences in work values. It then points out current issues in Human Resource Management in multinational corporations. Combining these two topics helps to examine how Generation Y is observed from a scholarly as well as practically point of view. The discussion part shows that generational differences as well as work values and attitudes of Generation Y employees differ from previous generations and that multinational corporations have to establish strategies in order to attract and retain Millennial employees. Main challenges arise from miscommunication and the level of technology-adeptness between generations. Opportunities from employing Millennials include their openness towards diversity and their willingness to work in global work environments. Future research suggestions are given for scholars as well as practitioners.

1. Introduction

Young, flexible, well-educated, technology adept, experienced, eager to achieve the maximum - these are attributes that businesses expect from their workforce. With the entering of Generation Y into the workforce, starting in the early 2000s and ongoing until 2022 approximately, companies had to face a new generation with different needs and attitudes (Hershatter and Epstein, 2010). How does Generation Yadapt to these expectations and how can companies further develop in order to attract and retain this generation of employees? Which factors influence job satisfaction and work values for this generation compared to previous generations?

Generation Y, or also called Millennials in the literature, are persons born between the 1980s and mid-1990s (Smola and Sutton, 2002). It is the first generation that grew up as digital natives, since they were exposed tothe digitalized world, such as the Internet, Smartphones, and Social Media, from their childhood onwards. They not just grew up in the era of digitalization, but they are the first generation which does notknow how life used to be without the Internet.

With their expertise in technologies they are often expected to be of high value to companies that are frequently exposed to the digitalized world. Moreover, this generation is characterized by their global connectedness through Social Media Networks as well as fast communication channels. While these factors can certainly be of benefit for companies, there are still several factors that employers need to be aware of when employing millennials: They are not only portrayed as “Generation Me” and narcissist, but also have high expectations towards their employment and their possibilities to balance their work lives and their private lives (Twenge and Campbell, 2008).

This seminar paper aims to discuss the existing literature on Millennials and analyze how Millennial employees present opportunities or challenges for multinational corporations. In order to do so, current literature on generational differences and work values of Generation Y is analysed. Further it is taken into account how Human Resource Management adapts to this new generation of employees. Then it is examined how scholars as well as practitioners in multinational corporations (MNCs) view generational differences and which actions are taken to overcome them. Lastly, it will be discussed how MNCs cope with the opportunities and challenges that arise from integrating Generation Y into their workforce.

2. Literature Review

Generational differences have been of interest in business research for quite a while already. There are often significant differences between generations and how they act in order to achieve their personal and professional goals. A generation is influenced by the circumstances and challenges of their time (Kupperschmidt, 2000). Therefore, different generations often develop diverse interests and goals for their personal as well as professional life. Especially in our globalized and technologized world, it is possible that a generation that grew up with the Internet as a defining factor will have a distinctive attitude towards their jobs that varies significantly from previous generations (Hershatter and Epstein, 2010). Their skills as digital natives can have benefits for companies in a globalized and digitalized work environment. However, companies also need to adapt to a workforce that is defined through work values that vary significantly from values of previous generations. Especially for multinational corporations it is of importance to analyze millennials and their abilities and attitudes towards their jobs. Moreover, MNCs need to set the right incentives for millennial employees in order to attract and retain talents.

2.1. Characteristics of Millennial Employees

Recent literature on Generation Y often focusses on how this generation differs from previous generations. These differences can have an impact on how multiple generations work efficiently together and need to be analyzed in order to spot and resolve conflicts between the generations at work. In the following, it will be distinguished how Generation Y differs from two previous generations, namely Generation X and the Baby Boomers, and how the work values of Millennials differ from older generations' work values and attitudes.

2.1.1. Differences between the Baby

Boomers, Generation X, and Millennials Generational differences have already been broadly discussed from a management perspective in the literature (Smola and Sutton, 2002; Hershatter and Epstein, 2010; Twenge, 2010; Twenge et al., 2010; Kaifi et al., 2012; Lyons and Kuron, 2014, Manuti et al., 2018). In order to examine generational differences, firstly it has to be defined what a generation is and how it can be characterized. In the literature, Kupperschmidt's (2000, p. 66) definition is often used, which defines a generation as “an identifiable group (cohort) that shares birth years, age location, and significant life events at critical developmental stages (times) divided by 5-7 years into first wave, core group, and last wave”. These cohorts share generational characteristics and generational perspectives, such as world-views, attitudes, values as well as knowledge, recognition, and appreciation of each other's times (Kupperschmidt, 2000). In the literature, some scholars criticize this sociological approach towards defining generational differences in the context of work values (Joshi et al., 2010; Parry and Urwin, 2011; Lyons and Kuron, 2014). Parry and Urwin (2011) propose that a generation is not only defined through its cohort, but also influenced by age effects and period effects. They point out that generational differences in work values as analyzed in the literature can result from a lack of identifying all different effects that can influence people differently within a generation (Parry and Urwin, 2011).

The Baby Boomers, born between the 1940s and early 1960s, are characterized through a boom in birth rates after WWII and a prosperous economic development in the U.S. (Kupperschmidt, 2000). They are optimistic and work hard in order to establish a standard of living for themselves. They are critical towards institutions and against technological advancements (Kaifi et al., 2012). While Kaifi et al. (2012) describe them as being rather aware of their personal freedoms, engaging in free-time activities and stressing their work-life-balance, Kupperschmidt (2000) describes them as a generation of ‘workaholics'. However, Kupperschmidt (2000) indicates that it is possible that the last wave cohort of the Baby Boomers shares certain values with the following generation, Generation X, defining the last wave cohort as more focused on their free time than the first wave and core group cohorts. This indicates the existence of a generational overlap between last wave cohorts and next generation first wave cohorts. This can lead to difficulties when distinguishing generations exactly based on their birth years, possibly also explaining why scholars define generational cohorts with different birth years (Smola and Sutton, 2002).

The problem of exactly defining generations is even more prevalent for Generation X. While Kupperschmidt (2000) determines Generation Xers to be born between 1960 and 1980, the birth years range in the literature from early 1960s to late 1960s and end in 1975, 1980, 1981, and 1982 in various publications (Smola and Sutton, 2002). Generation X is significantly smaller than previous and following generations (Kaifi et al., 2012). They are defined through the high divorce rates of their parents, poor economic prospects, distrust in job security and being cynic towards their overall circumstances (Kupperschmidt, 2000; Smola and Sutton, 2002; Kaifi et al., 2012; Smith and Nichols, 2015). However, they are also used to technologies, as e.g. computers, and experience ample diversity and change while growing up (Smola and Sutton, 2002). Generation X is more individualistic, independent, and likely to switch jobs than previous generations (Smola and Sutton, 2002; Twenge et al., 2010; Kaifi et al., 2012). Moreover, they are defined by valuing their work-life balance and being critical about organizations and their employment situation (Twenge et al., 2010). As the predecessor of Generation Y, they are currently employed in management positions and supervising Millennial employees.

Generation Y, also referred to as Millennials or Generation Me, are born between 1979 and the mid-1990s (Smola and Sutton, 2002; Twenge et al., 2010; Kaifi et al., 2012). They are the first generation to be defined through growing up with the Internet (Kaifi et al., 2012). Prensky (2001, p. 2) coins the phrase “digital natives” to describe the students of this generation as technologically more adept than any previous generation. For predecessors of Generation Y, he coins the phrase “digital immigrant”, since these previous generations have to spend more effort on learning how to navigate through the Internet Prensky (2001, p. 2). Millennials actively use the Internet as main source of information and communication channel. They experience digital technologies, Social Media and live-time communication from an early age on and therefore, are connected around the clock (Kaifi et al., 2012).

Moreover, Hershatter and Epstein (2010) point out that Generation Y is not only defined by their connection to digital technologies, but furthermore experiences a high level of economic, political, and institutional stability. From their early lives on, they are well taken care of by the Baby Boomer generation, which provides Generation Y with better educational systems and security than Generation X, resulting in more trust for the government, institutions, and organizations (Hershatter and Epstein, 2010). Moreover, Hershatter and Epstein (2010) indicate that Generation Y experiences a high level of support from their parents and teachers. Sometimes referred to as “Trophy Kids”, Generation Y receives rewards not only for winning in sports or competitions, but for participation (Kaifi et al., 2012). This system of rewards and recognition conveys the impression that Millennials are born to succeed and have every opportunity in life (Hershatter and Epstein, 2010). Compared to Generation X, Millennials grow up under more stable circumstances that provide them with positive prospects for their lives.

Furthermore, Millennials are more used to internationality and cultural diversity than previous generations. They grow up not only in the era of digitalization, but also in times of globalization. Generation Y is the first generation to be able to connect globally through the Internet with little effort. They are able to adapt more easily to cultural differences and have a more positive attitude towards cultural diversity than previous generations. This open-mindedness with regards to internationalization and globalization can be beneficial when seeking employment with a multinational company (Hershatter and Epstein, 2010).

2.1.2. Work Values of Generation Y Compared to Previous Generations

In order to analyze how Millennials integrate into the workforce, it is of interest to examine how they differ from previous generations in certain attitudes and actions. In the literature, this is often done by pointing out the work values of a generation and comparing these values to previous generations. Lyons et al. (2010, p. 971) define work values as “generalized beliefs about the relative desirability of various aspects of work (e.g., pay, autonomy, working conditions), and work-related outcomes (e.g., accomplishment, fulfillment, prestige)”. These values express the needs and goals that are encountered at work and through working, such as “monetary security, social interaction, intellectual stimulation, status, esteem, and self-actualization” (Lyons et al., 2010, p. 971). The conceptualization of work values differs in the literature: Lyons et al. (2010) propose that work values can be divided into four categories: intrinsic, extrinsic, social, and prestige values. Some scholars define even more work values, such as altruistic and leisure values (Twenge et al., 2010).

Smola and Sutton (2002, p. 371) divide work values into the three categories “Desirability of Work Outcomes”, “Pride in Craftsmanship”, and “Moral Importance of Work”. In their longitudinal study, they compared the results of a qualitative study based on questionnaires from 1974 with data they collected in 1999. Their results show that Baby Boomers and Generation X differ significantly in their work values due to generational differences. Their findings show that the younger generation, Generation X, assigns less effort to their jobs and is more concerned with their personal lives than older generations. Moreover, the results indicate that the younger generation is more dedicated to providing good work than previous generations. Even though this study does not include Generation Y into the empirical research, it suggests that generational differences can lead to more diverse work values and that Generation Y is very likely to stress their personal free time and work-life balance even more than Generation X (Smola and Sutton, 2002).

There are very few longitudinal studies that include Millennials and their work values. Twenge et al. (2010) conduct a longitudinal study with data from three questionnaires that was collected in 1976, 1991, and 2006. They test whether Millennials value leisure rewards, intrinsic rewards, altruistic rewards, social rewards, or extrinsic rewards more compared to previous generations. Their results show that the most significant change in values exists for leisure rewards. Generation Y stresses the value of free time and work-life balance more than previous generations (Twenge et al., 2010). This finding is consistent with the beforementioned results of Smola and Sutton (2002). For extrinsic rewards, Twenge et al. (2010) find that Generation Y is even more focused on generating a high income and establishing status than all analyzed previous generations. Results for altruistic rewards indicate that these are valued consistently throughout the generations. Furthermore, intrinsic rewards show a slightly increasing trend, meaning that Generation Y is less motivated to make an effort at work without any monetary compensation. Social rewards are also slightly less valued by Generation Y. This could indicate that Millennials are less interested in building up social connections at work, since they are able to maintain relationships more easily outside of work through Social Media usage (Twenge et al., 2010).

Despite these few longitudinal studies, some of the current literature on generational differences in work values is based on cross-sectional research. While empirical research suggests that generational differences have an influence on work values, cross-sectional research often finds that work values are not only dependent on generational differences, but further impacted by other influencing factors (Cennamo and Gardner, 2008; Wong et al., 2008). Parry and Urwin (2011) suggest that work values not only differ between generations and cohort groups, but are influenced by age and period effects that take place within certain generations. Nonetheless, empirical research indicates that generational differences influences the work attitudes of Generation Y.

The generations that are currently employed in the workforce have to cope with these generational differences. Especially MNCs need to adapt their Human Resource Management accordingly in order to acquire and retain Millennial employees. The following chapter discusses literature on current topics in global workforce management as well as diversity as a significant factor for MNCs.

2.2. Human Resource Management in

Multinational Corporations In times of globalization, companies are more and more exposed to opportunities and challenges in an international context. Multinational corporations, also called multinational companies or enterprises, are the most common form for an internationally operating company and receive significant attention in the literature. (Hershatter and Epstein, 2010). Due to this, they are exposed to national and cultural differences as well as to a more diversified workforce (Yi et al., 2015).

Therefore, adapting their human resource management (HRM) is of essential importance, since employees of different national and cultural backgrounds have to work efficiently together. Moreover, MNCs are exposed to the challenges of globalization, but furthermore, to the benefits and problems that occur from the use of the Internet and modern technologies (Stone and Deadrick, 2015). Digitalization has a major impact on business communication as well as on innovation and development. An aspect that is especially of relevance for HRM in MNCs is the increasing diversity within companies in terms of generational as well as ethnic diversity (Stone and Deadrick, 2015). In the following, literature on MNCs in the context of global teams is reviewed in order to analyze how MNCs manage their workforce, and acquire and retain talents.

2.2.1. Trends in Global Human Research Management

In MNCs, cultural diversity is a defining factor of the work environment. Therefore, the way cultural diversity is perceived and impacts MNCs has been frequently discussed in the literature (Patrick and Kumar, 2012; Farndale et al., 2015; Yi et al., 2015). Since companies are not only exposed to challenges in managing their employees in their home country anymore, two new research fields were established in management research: Global Talent Management (GTM) and International Human Resource Management (IHRM).

Global Talent Management became a topic of interest with the publication of the McKinsey & Company report “The War for Talent” in the late 1990s (Michaels et al., 2001). GTM deals with the challenges and opportunities of “talent shortages, talent surpluses, locating and relocating talent, and compensation levels of talent” (Schuler et al., 2011, p. 506). Through GTM it is possible for MNCs to gain a competitive advantage (Tarique and Schuler, 2010). Due to its significance for globally operating enterprises, GTM has been of interest to scholars as well as HRM practitioners.

Schuler et al. (2011) found the four main drivers in GTM that can affect efficient HRM in global corporations to be globalization, demographics, and demand and supply of competent and motivated workers. Tarique and Schuler (2012, p. 12) include “Changing attitude towards work and structure of work; and, Country culture differences” as drivers that impact GTM. Based on these drivers, GTM research aims to find theoretical approaches that can help MNCs to better manage their workforce. Based on this, Tarique and Schuler (2010) establish the definition “global talent management is about systematically utilizing IHRM activities (complementary HRM policies and policies) to attract, develop, and retain individuals with high levels of human capital (e.g., competency, personality, motivation) consistent with the strategic directions of the multinational enterprise in a dynamic, highly competitive, and global environment” (p. 124).

While the aim of GTM is well-defined, implementing strategies in order to acquire and retain talents can still be challenging for MNCs. Since GTM is already established as a broad research field, only some literature on basic challenges and recent topics is taken into consideration.

Farndale et al. (2010) point out that the human resource functions of MNCs face multiple difficulties when managing global talents. They find global competition and international mobility to be the main challenges for global talent management (Farndale et al., 2010). Moreover, there is no consensus in the literature on how MNCs implement GTM and to which extend theoretical approaches are used by practitioners. McDonnell et al. (2010) conducted research in Irish MNCs based on four possible GTM implementations: global succession planning, global management development, global talent management, and global talent development. Their results show that although most of the companies implement succession planning and management development, many of the companies lack to implement two or more of the implementations and therefore, do not make use of the full potential of GTM (McDonnell et al., 2010).

In the era of digitalization, MNCs also have the possibility to make use of technological advancements and Social Networks in order to acquire talents. However, research conducted by Dresselhaus et al. (2013) shows that while college students as well as employees frequently use Social Networks to communicate, MNCs still widely neglect this opportunity to get in contact with prospective talents. However, this could have possibly changed during the past six years. Moreover, Ruël and Lake (2014) indicate that some MNCs not only refrain from using Social Networks but furthermore, face difficulties implementing information technologies into their GTM. They propose that implementing information technology into the GTM process could lead to more efficiency and the electronic data could be used for strategic decision making (Ruël and Lake, 2014).

The second research field that focusses on HRM in global corporations is IHRM. IHRM can be distinguished from GTM through its broader approach in aspects that are covered by this discipline (Tarique and Schuler, 2010). While GTM concentrates on the employee level and drivers that directly influence the acquisition and retention of workers, IHRM also takes into consideration the overall effects for a broader range of stakeholders (Tarique and Schuler, 2010). While early IHRM literature was mainly concerned with expatriation in the context of MNCs, the focus shifts towards a broader range of topics and different levels of analysis, which are the macro level, MNC level, unit level, and individual level (Björkman and Welch, 2015). Nonetheless, IHRM literature as well as GTM literature consider cultural diversity to be an influencing factor in global teams, which is reviewed in the following section.

2.2.2. Diversity in Multinational Teams and MNCs

Multinational corporations are complex organizations, since they have to adapt to every single location at which they operate. From an HR perspective, they are distinguished through the diversity of the employees and the cultural differences within teams (Moosmüller, 2016). These teams are often referred to as multinational teams (MNTs). MNTs are the basis for the work environment in MNCs, since they are the connection point between various employees of different nationalities, cultures, and generations.

The concept of cultural diversity came into the focus of attention during the movements for civil rights, human rights, and gender equality (Moosmüller, 2016). Due to the outcomes of these movements for equal rights, cultural diversity was seen as a positive feature for the society. Moosmüller (2006) summarizes that some companies perceived cultural diversity as an enhancing factor to strengthen their comparative advantage. However, in the context of MNCs, cultural diversity can also lead to challenges, such as difficulties in communication, different approaches towards business task and different time-perceptions. He stresses that MNCs need to be aware of these challenges that arise with the opportunities that come with cultural diversity within the workforce (Moosmüller, 2016).


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Millennial Employees in Multinational Corporations. Opportunities and Challenges of Generation Y in the Workforce
University of Tubingen  (Wirtschaftswissenschaften)
Master Seminar Int. Business
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ISBN (eBook)
ISBN (Book)
millennials, generational differences, MNCs, Generation Y, international work groups
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Elena Thole (Author), 2019, Millennial Employees in Multinational Corporations. Opportunities and Challenges of Generation Y in the Workforce, Munich, GRIN Verlag,


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