Globalisation and workforce diversity: HRM implications for multinational corporations in Singapore.Abstract
This paper presents findings based on a study involving local and foreign medium- to large-sized multinational corporations
in full Asia-Pacific Economic Cooperation
Trade group established in 1989 in response to the growing interdependence of Asia-Pacific economies and the advent of regional economic blocs (such as the European Union and the North American Free Trade Area) ) economies develop the regional human capacity as part of an economic and social imperative in response to globalisation. This paper introduces a new conceptual framework--construct domain of diversity--to identify the nature of the labour market, and discusses the need for firms to align company policies, strategies, and organisational structures with the dynamic business environment. A significant implication is the impact on strategic international human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. management for MNCs in the Asia Pacific region.
As multinational corporations (MNCs) operate across transnational borders, business managers have acknowledged that the increasing globalisation of the world economy has allowed MNCs greater access to wider consumer markets and distribution networks, as well as coordinate production and business transactions within economic clusters or networks involving cross border internal and external relationships (Dunning Dunning
The process of communicating with customers to ensure the collection of accounts receivable.
Dunning can start with gentle reminders and then progress to nearly threatening letters as accounts become more past due. , 1981). MNCs are in a better position to capitalise on other new specialised resources such as capital, technological competences, information and tacit knowledge The concept of tacit knowing comes from scientist and philosopher Michael Polanyi. It is important to understand that he wrote about a process (hence tacit knowing) and not a form of . , and production capabilities required to enhance future product and services development (Hennart, 1982, 1991; Chandler, 1986; Cantwell, 1991; Bartlett and Ghoshal, 2000; Hill, 2003). Furthermore, Hamel Ham´el
v. t. 1. Same as Hamble. and Prahalad (1985) have noted that these global businesses are not just vying vy·ing
Present participle of vie.
vying vie for dominance in world sales volume or market share, but also for greater capital flow to support new product innovations, investment in core technologies, and world-wide distribution channel. In due course, these factors have transformed MNCs into multi-unit, multifunctional institutions, which allow them greater managerial coordination, while intensifying in·ten·si·fy
v. in·ten·si·fied, in·ten·si·fy·ing, in·ten·si·fies
1. To make intense or more intense: global competition between rival corporations. Such structural changes would suggest there is greater complexity in the international business environment. Not surprisingly, MNCs are facing increasing managerial challenges associated with developing and implementing business strategies, in order to compete in the across the global economy.
This paper presents findings based on a study involving local and foreign medium to large-sized multinational corporations (MNCs) in Singapore. The findings highlight the connection between the stages of organisational development, headquarters-subsidiary orientation, and increasing workforce diversity in MNCs. The following section discusses the political, economic and social imperatives in the Asia-Pacific region as regional political and business leaders emphasise on strengthening institutional capacities to develop and implement effective strategies and practices that will provide a foundation for human resources development in response to globalisation (Asia-Pacific Economic Cooperation, 1999, 2000a/b, 2001a/b). Subsequently, this will bring about significant organisational changes in firm structures. This study examines the impact of globalisation in Singapore as a result of such regional developments. The justification for the study in Singapore stems from the fact that it is strategically positioned in this particular region, whereby the nation's leadership have placed much emphasis on strengthening institutional capacities to develop and implement effective national policies and strategies that will provide a foundation for continuous economic growth in the 21st century.
Political, Economic, and Social Developments in Asia Pacific and Southeast Asian Regions
Over the past decade, the Asia-Pacific Economic Cooperation (APEC) has become the primary vehicle in the Asia-Pacific region in promoting open trade and economic cooperation. In fact, the region is considered one of the most dynamic and fastest growing economic sectors in the world, incorporating 42 per cent of world trade (APEC, 2000a). The continuous growth in this region is attributed to the size of potential domestic markets, high standard of living and consumer purchasing power Purchasing Power
1. The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing power is important because, all else being equal, inflation decreases the amount of goods or services you'd be able to purchase.
2. , the availability of natural resources, increasing regional trade relations, the existence of adequate infrastructure, and the quality of the workforce. Global and regional macroeconomic mac·ro·ec·o·nom·ics
n. (used with a sing. verb)
The study of the overall aspects and workings of a national economy, such as income, output, and the interrelationship among diverse economic sectors. conditions have prompted the member economies to continue to reform and restructure so as to sustain growth. Such economic and political commitments have boosted the confidence for better prospects and economic outlook for the APEC region. Consequently, the rapid growth of the regional economies has made the region attractive to foreign investors, with promising economic and financial gains (UNCTC UNCTC United Nations Centre on Transnational Corporations (1973-1993) , 1992; Li, 1994; APEC, 2000a/b).
APEC leaders have realised that while the global economy has created unprecedented opportunities, it also presented many new challenges to the government institutions and business communities. In the advent of globalisation, the leaders are convinced that the paradigm shifts A dramatic change in methodology or practice. It often refers to a major change in thinking and planning, which ultimately changes the way projects are implemented. For example, accessing applications and data from the Web instead of from local servers is a paradigm shift. See paradigm. towards global political, economic, and social integration have significant implications to the developing member economies (APEC, 2001b). During the APEC Economic Leaders' Declaration (APEC, 2000b), they have considered the challenges of the new millennium and have reaffirmed the APEC vision of a community of open and economic interdependency in·ter·de·pen·dent
Mutually dependent: "Today, the mission of one institution can be accomplished only by recognizing that it lives in an interdependent world with conflicts and overlapping interests" as the means to strengthen the members' abilities to grow together in the global market and deliver prosperity to their economies. The APEC leaders are bound by a sense of mutual understanding regarding the challenges in each of the member economies and have reiterated their determination to optimise the benefits of globalisation through positive contribution in various cooperation programmes (APEC, 2001b). One significant agenda and commitment is the renewed emphasis for human capacity building in the region.
Labour Market and Human Resources Development in APEC
The APEC leaders have acknowledged that human resources development is central to the economic development in Asia Pacific, especially in the advancement of society and the sharing of prosperity with the people in the context of globalisation (APEC, 2001a). The strong emphasis of human capacity building is in recognition that the peoples of the region are APEC's most valuable assets. As a matter of fact, the leaders continue to believe that economic cooperation must be a process which is open and transparent, so as to foster an environment that assures the people will have greater access to employment opportunities (APEC, 2000b; 2001a). They have acknowledged that effective labour and employment policies can enhance a skilled and adaptable labour force, and improve trade and investment activities which will eventually benefit the workforce (APEC, 1999). Thus, the APEC leaders have agreed that human capacity building programmes should continue to be placed high in the APEC agenda. In this regard, they have encouraged their respective government institutions and business communities to prepare human capacity building strategies that would define the objectives, priorities, and principles for APEC (APEC, 2000a).
Some recommendations for policy reviews for the purpose of building a strong foundation for human resources development, include 1) Increasing access to quality education, relevant market-driven skills training, retraining re·train
tr. & intr.v. re·trained, re·train·ing, re·trains
To train or undergo training again.
re·train and lifelong learning Lifelong learning is the concept that "It's never too soon or too late for learning", a philosophy that has taken root in a whole host of different organisations. Lifelong learning is attitudinal; that one can and should be open to new ideas, decisions, skills or behaviors. ; promoting efficient and equitable labour markets through policies and services that facilitate people's transition into jobs, effective and inclusive labour market policies, employment-oriented social safety nets, mutual recognition of professional skills across the region; 2) Maximising the labour force potential by tapping under-utilised pools of workers such as people with disabilities, women, youth, older workers, under-employed workers, and indigenous people; 3) Increasing collaboration and information exchange with and among other regional and international organisations Noun 1. international organisation - an international alliance involving many different countries
global organization, international organization, world organisation, world organization and through enhanced cooperation among government, business, labour, and civil society; 4) Building capacity to manage the transformation and innovation of workplaces and organisational practices; and 5) Addressing the needs of informal sector workers and facilitating their participation in the mainstream economy (APEC, 1999; 2001a).
Regional Developments Affecting Singapore
Consequently, such agenda actions proposed by the leaders of APEC would have significant implications for business development for countries in the Southeast Asian region. There have been several trends in the Association of Southeast Asian Nations Association of Southeast Asian Nations (ASEAN), organization established by the Bangkok Declaration (1967), linking the nations of Indonesia, Malaysia, Philippines, Singapore, and Thailand. , ASEAN ASEAN: see Association of Southeast Asian Nations.
in full Association of Southeast Asian Nations
International organization established by the governments of Indonesia, Malaysia, the Philippines, Singapore, and Thailand in , member countries, which have significantly influenced the growth of the region. Many of the factors contributing to the continued developments include high quality human capital, extensive infrastructure improvement, rising industrial and technological sophistication so·phis·ti·cate
v. so·phis·ti·cat·ed, so·phis·ti·cat·ing, so·phis·ti·cates
1. To cause to become less natural, especially to make less naive and more worldly.
2. , increasing numbers of state-owned enterprises, greater national commitment towards establishing a free trade region, in and outflow of direct foreign investment, pragmatic business-oriented government, rising private consumption, greater public and private investment, higher saving rates, increased economic organisational and deregulation Deregulation
The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry.
Traditional areas that have been deregulated are the telephone and airline industries. (Tan and Wee, 1995; Hew, 2005). Such dynamic development in this region has brought about greater competition and closer interdependence in·ter·de·pen·dent
Mutually dependent: "Today, the mission of one institution can be accomplished only by recognizing that it lives in an interdependent world with conflicts and overlapping interests" among the ASEAN countries. Gradually, Southeast Asia Southeast Asia, region of Asia (1990 est. pop. 442,500,000), c.1,740,000 sq mi (4,506,600 sq km), bounded roughly by the Indian subcontinent on the west, China on the north, and the Pacific Ocean on the east. would emerge as an independent contributor of growth in the global economy, as the region extends its economic competition to other regions such as China, Japan, Europe and United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. (Tan and Wee, 1995; Turcq, 1995; Hew, 2005).
It is not surprising that Singapore has benefited much from the above developments, as it is strongly committed to maintaining business competitiveness in the regions of Asia Pacific and Southeast Asia. For example, since the launch of the Association of Southeast Asian Nations Free Trade Association (AFTA AFTA ASEAN Free Trade Area
AFTA ASEAN Free Trade Association (less common)
AFTA Association for Temperate Agroforestry
AFTA Americans for the Arts
AFTA American Family Therapy Association
AFTA Arts for the Aging, Inc. ) (ASEAN Secretariat Secretariat, 1970–89, thoroughbred race horse. Trained by Lucien Laurin and ridden by Ron Turcotte, Secretariat won the Kentucky Derby, Preakness, and Belmont Stakes to capture the Triple Crown in 1973.
(foaled 1970) U.S. , 2006), there has been closer intra-regional cooperation among member countries, resulting in a "regionalisation Regionalisation refers to the tendency to form regions or the process of doing so.
v. af·firmed, af·firm·ing, af·firms
1. To declare positively or firmly; maintain to be true.
2. To support or uphold the validity of; confirm.
v.intr. its support for proactive and comprehensive labour market policies in response to the changing demographic structures, developments in the nature of jobs, and complex workplaces in the country. And, the government has capitalised on its country-specific capabilities and its strategic position by attracting the best and highly innovative individuals, both locally and internationally, to work in the country. Moreover, Singapore's key economic focus on knowledge-intensity industries suggests there would be greater job opportunities and attractiveness for professionals with the relevant skills and knowledge of science and technology (Ministry of Trade and Industry of Singapore, 2006; Singapore Economic Development Board, 2006).
Research in Singapore
Given the political, economic, and social changes that have taken place in the Asia Pacific and Southeast Asian regions, this has provided much opportunity for in-depth study of the impact of globalisation on the organisational development of firms, HQ-subsidiary orientation, and increasing workforce diversity in MNCs in Singapore. Secondary data of a number of local and foreign medium- to large-sized MNCs were reviewed between 2000-2002. The MNCs were in the manufacturing services sector of Singapore. Drawing upon the information gathered, general insights into the structural changes and HR strategies within the MNCs could be deduced, which is consistent with previous studies of the transitional developments of firms as they expand their business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets globally. The next section describes the different stages of the firms' general progress.
Evolutionary Changes in Multinational Corporation multinational corporation, business enterprise with manufacturing, sales, or service subsidiaries in one or more foreign countries, also known as a transnational or international corporation. These corporations originated early in the 20th cent. Structures
Bartlett and Ghoshal (1988, 1989, 2000) concluded that the extent of global business competition has led many firms to experience mounting pressures to restructure their organisations and systems as they strategically position themselves to capitalise on potential competitiveness within their specific industries, both within their home countries and the foreign countries they are operating in. Drawing from the underlying principles regarding MNCs' motivation to expand operations internationally, Vernon (1966), Perlmutter (1969), and Adler and Ghadar (1990a/b) have observed that corporations may transit four stages of organisational development or evolution, namely the 1) Domestic stage; 2) Multidomestic stage; 3) Multinational stage; and 4) Global or transnational stage.
In the initial phase, firms may operate within a domestic, ethnocentric eth·no·cen·trism
1. Belief in the superiority of one's own ethnic group.
2. Overriding concern with race.
eth perspective. The marginal importance of international competition and the uniqueness of product and services for an exclusive domestic market means that firms are operating within a business scope where there is limited regard for national cultural differences or sensitivity (Adler and Ghadar, 1990a/b). Ethnocentric attitudes may prevail in which the firms' business operations are towards a home-country orientation (Perlmutter, 1969). Managerial processes are expressed in the national identities of the firms by associating the companies with the specific nationalities of the headquarters. The extent of authority and control is managed at the headquarters-level. Furthermore, executives from the home nationality nationality, in political theory, the quality of belonging to a nation, in the sense of a group united by various strong ties. Among the usual ties are membership in the same general community, common customs, culture, tradition, history, and language. are recruited and developed for key appointments in the foreign subsidiaries across the world.
The next stage of development is the multi-domestic phase. In this stage, firms acknowledge that cultural sensitivity is critical to implementing effective business strategy (Adler and Ghadar, 1990a/b). As operations are shifting towards an international market orientation, there is greater need to emphasise on the different foreign domestic market separately, from a polycentric polycentric /poly·cen·tric/ (-sen´trik) having many centers. (Perlmutter, 1969) or regiocentric perspective (Moran, Harris and Stripp, 1993). Unlike the previous initial stage where the firms may hold an ethnocentric "one-best" approach to managing international business, the multi-domestic stage emphasises there are other alternative approaches to manage the operations, depending on the respective host countries. Corporate management recognises that culturally appropriate policies have to be designed to manage staff of the different foreign subsidiaries. Local or host-country orientation may be higher in which the firms assume "the local nationals always know what is best" for the business. Hence more local nationals may be assigned to key position within the subsidiaries.
The third stage of the development is the multinational phase. The firms maintain a global price-sensitive and cost-sensitive perspective, in which the main focus of business operations is on complete standardisation Noun 1. standardisation - the condition in which a standard has been successfully established; "standardization of nuts and bolts had saved industry millions of dollars"
standardization of product and services, and not the creation of culture awareness of the different foreign market segmentation Market Segmentation
A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will respond similarly to a marketing action. . As such, the intense price competition has significantly reduced the impact of cultural differences and negated the importance of cultural sensitivity as firms seek out the "one least-cost way" to manage the international business instead (Adler and Ghadar, 1990a/b).
The final stage is the global or transnational phase. This stage entails a geocentric ge·o·cen·tric
1. Relating to, measured from, or with respect to the center of the earth.
2. Having the earth as a center.
ge perspective in business operation in which firms are engaging in an increasingly complex and interdependent in·ter·de·pen·dent
Mutually dependent: "Today, the mission of one institution can be accomplished only by recognizing that it lives in an interdependent world with conflicts and overlapping interests" operation across the border (Perlmutter, 1969). The extent of the firms' competitive strategies is to capture significant market share by emphasising on product and service customisation, efficient production capabilities, extensive research and development, and strategic global alliances with other local or foreign firms (Adler and Ghadar, 1990a/b). As firms compete globally where there is greater transnational interaction between the organisations, the key factor in organisational success involves greater collaborations between the headquarters and subsidiaries to establish universal standards while identifying with possible local variations or national interests (Perlmutter, 1969). With this regard, there is recognition that a more effective managerial practice is to develop the best staff in the firms to participate in strategic operations across the world. As such, there is greater need for management to realign re·a·lign
tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns
1. To put back into proper order or alignment.
2. To make new groupings of or working arrangements between. current organisational development towards a more culturally responsive orientation to enhance effective international human resource management as more staff from different nationalities and cultures is engaged to meet local and worldwide organisational objectives.
Evidently, as MNCs strategically adopt a more transnational perspective, senior management has recognised that the traditional strategic mindset mind·set or mind-set
1. A fixed mental attitude or disposition that predetermines a person's responses to and interpretations of situations.
2. An inclination or a habit. that focused solely on domestic levels of business operations without considerations for global consequences would not produce sustainable competitive advantages for the corporations. The transition from the multinational to the global or transnational corporation Any corporation that is registered and operates in more than one country at a time; also called a multinational corporation.
A transnational, or multinational, corporation has its headquarters in one country and operates wholly or partially owned subsidiaries in one or more marks yet another fundamental development in organisational perspective. Corporations may no longer be multi-domestic in nature, but global in their structures, strategies, markets and resource bases (Adler, Doktor and Redding Redding, city (1990 pop. 66,462), seat of Shasta co., N central Calif., on the Sacramento River; inc. 1872. A principal tourist center for a mountain and lake region, it also has lumbering, food-processing, and diverse manufacturing. , 1986). Table 1 presents an overview of the HQ orientation toward subsidiaries in an international enterprise according to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. the stages of organisational development.
Workforce Diversity in Singaporean-based MNCs
Apparently, the abovementioned a·bove·men·tioned
The one or ones mentioned previously. structural transitions would have serious implications for MNCs based in Singapore. With the expanding complexity of the organisational design, there would be an emergence of workforce diversity in the workplace, which would bring about changes in the administration of strategic human resource management (Tung, 1984; Adler and Ghadar, 1990b; Milliman, von Glinow and Nathan, 1991; Kobrin, 1994; Schuler, Dowling and De Cieri, 1994; Taylor, Beechler and Napier, 1996). The significance of multiculturalism multiculturalism or cultural pluralism, a term describing the coexistence of many cultures in a locality, without any one culture dominating the region. and diversity in the workplace is evident in the recruitment of local and foreign staff as part of organisational initiatives, when MNCs organise their strategic global operations Global Operations is a first-person shooter computer game developed by Barking Dog Studios and published by both Crave Entertainment and Electronic Arts. It was released in March of 2002, following its public multiplayer beta version which contained only the Quebec map. at both the headquarters and foreign subsidiaries (Chandler, 1986; Adler and Ghadar, 1990a/b; Kobrin, 1994). The demographic profile A demographic or demographic profile is a term used in marketing and broadcasting, to describe a demographic grouping or a market segment. This typically involves age bands (as teenagers do not wish to purchase denture fixant), social class bands (as the rich may want of the workforce in the organisations would no longer be characterised by homogeneity Homogeneity
The degree to which items are similar. or mono-culturalism. It is evolving into a composite of multifarious multifarious adj., adv. reference to a lawsuit in which either party or various causes of action (claims based on different legal theories) are improperly joined together in the same suit. This is more commonly called "misjoinder." (See: misjoinder) people from different socio-cultural backgrounds, in which workforce diversity could mean the representation of people from different group affiliations within organisations (Cox, 1991, 1993; Cox and Blake, 1991; Jackson and Alvarez, 1992; Jackson and Ruderman, 1995). Figure 1 illustrates the increasing workforce diversity as corporations experience evolutionary developments in their business operations.
[FIGURE 1 OMITTED]
Snapshot (1) A saved copy of memory including the contents of all memory bytes, hardware registers and status indicators. It is periodically taken in order to restore the system in the event of failure.
(2) A saved copy of a file before it is updated. of Workplace Diversity
Table 2 presents a representation of the diverse workforce in the MNCs, characterised by their national-ethnic backgrounds. The Singaporean employees constituted the largest labour group (n = 314), in which they made up 63.3 per cent of the sample population. Within the Singaporean group, there were 270 Singaporean-Chinese, 18 Singaporean-Malay, 18 Singaporean-Indian and eight Singaporean-Eurasian. The second largest group was the Malaysians (n = 68), in which there were 60 Malaysian-Chinese, four Malaysian-Indian, and a similar number of Malaysian-Singhalese and Eurasian (n = 2). The ethnic Indians from India (n = 46) was the next largest group, followed by the Chinese from China (n = 30) and Indonesia-Chinese (n = 22). Last, there were 16 Filipino employees amongst the sample population.
Though the study has highlighted some features of the sample workforce, one must acknowledge that diversity is not only limited to identifying employee differences based on nationality and ethnicity. We need to consider other aspects of diversity as well, so as to understand and appreciate the complexity of the human capital composition. With the distinctive changes in the human resource factor in MNCs, this would lead to the following questions: How is diversity defined? What implications do diversity have for organisations? In order to address these questions, an understanding of the concept of diversity is essential.
Construct Domain of Diversity
Generally, diversity may be defined as the presence of differences among members of a social group or unit (Jackson, May and Whitney, 1995). In another perspective, Cox (1993) defines diversity as "... the representation, in one social system, of people with distinctly different group affiliations of cultural significance" Deresky (1994) highlighted that the differences between the group members may be illustrated in terms of the dimensions such as national origin, language, religious belief, culture, age, physical ability, socio-economic status, marital status marital status,
n the legal standing of a person in regard to his or her marriage state. , sexual orientation sexual orientation
The direction of one's sexual interest toward members of the same, opposite, or both sexes, especially a direction seen to be dictated by physiologic rather than sociologic forces. , race, family situation, and gender. Ferdman (1995) emphasised the fact that membership in social groups distinguish one person from another not only in name but also in their viewpoints of the world, in their construction of meanings, and in their behavioural Adj. 1. behavioural - of or relating to behavior; "behavioral sciences"
behavioral and attitudinal preferences, and other patterns of values, beliefs, norms. Harris and Moran (1999) further expounded on the dimensions of diversity and included other characteristics not identified by Deresky (1994). The factors include physical appearance, cultural heritage, personal background, functional experience, mental and physical challenges, family responsibilities, military experience, educational background, style preferences, thinking patterns, political backgrounds, city, state or region of residence, IQ level, smoking preference, weight, height, non-traditional jobs, and white and blue collar.
Although researchers and institutions in the fields of international business, applied sociology, and anthropology have investigated the subject of diversity and have proposed some common denotations of diversity, they have not organised the identifiable characteristics or variables of diversity into a systematic, universal structure, which can be used for empirical analysis and contextual comparisons across and within societies. In other words Adv. 1. in other words - otherwise stated; "in other words, we are broke"
put differently , cataloguing the details of diversity is not enough, since each complex society is more than just consisting of 'presumably unrelated' societal so·ci·e·tal
Of or relating to the structure, organization, or functioning of society.
Adj. features. This paper introduces a construct domain of diversity, which classifies employee differences in terms of three distinctive categories. The categories include demographic diversity, organisational diversity, and socio-cognitive diversity.
The first category is demographic diversity such as age, gender, ethnicity, and nationality (Cox, 1991; Cox and Blake, 1991; Jackson and Ruderman, 1995) whereby Jackson et al (1995) have commented that these are considered readily detectable attributes that can be easily characterised in particular individuals. The second category is organisational diversity. It is important to note that workforce diversity is not limited to the physical or social attributes of the organisational members: It also involves the organisational context that adds to the diverse perspective of the group dynamism. Organisational diversity may include the 1) occupation, functional or job portfolios of the employees such as marketing, finance, accountancy, manufacturing, production, etc; 2) staff job tenure or seniority in the firm; 3) hierarchical ranking within the organisation (for example, senior management, middle management, and lower management); and 4) work or professional experience (Jackson and Ruderman, 1995). The last category is socio-cognitive diversity, which includes cultural and religious values, beliefs, knowledge level, and personality characteristics (Jackson and Ruderman, 1995). It constitutes the underlying attributes of personal characteristics that are not so easily identifiable (Jackson et al, 1995).
By establishing and organising the staff according to their unique attributes, it will enable business managers to have a more objective understanding and appreciation of their diverse staff's behaviours, attitudes and values, given the implications for interpersonal in·ter·per·son·al
1. Of or relating to the interactions between individuals: interpersonal skills.
2. and organisational processes and outcomes when staff members work together. Essentially, as people's values and beliefs vary distinctively as a consequence of their different socio-cultural predispositions, this will affect organisational processes and configurations, for example, supervisor-subordinate relationships, leadership and decision-making styles, cross-cultural communication Cross-cultural communication (also frequently referred to as intercultural communication) is a field of study that looks at how people from differing cultural backgrounds endeavour to communicate. , international team management, staff motivation, staff recruitment, selection and development, staff expatriation expatriation, loss of nationality. Such loss is usually, although not necessarily, voluntary. Generally it applies to those persons who have renounced nationality and citizenship in one country to become citizens or subjects of another. According to U.S. and repatriation Repatriation
The process of converting a foreign currency into the currency of one's own country.
If you are American, converting British Pounds back to U.S. dollars is an example of repatriation. , and other managerial functions. Figure 2 presents an illustration of the construct domain of diversity.
[FIGURE 2 OMITTED]
Workforce Diversity and Strategic International Human Resource Management
Undoubtedly, MNCs would benefit from the wealth of available business knowledge, differing experiences, and global perspectives that staff from diverse backgrounds can contribute. Porter (1990) contended that differences in character and culture may prove to be integral to global success, as diversity is considered important towards enhancing innovation and competition in an environment of multiculturalism in organisations. Thus, this signals a need for greater cultural sensitivity and empathetic em·pa·thet·ic
empa·theti·cal·ly adv. orientations in the workplace, whereby there ought to be an emphasis on cultural acceptance rather than cultural tolerance. Policies and practices in diversity management should ensure that there is continuous learning and adaptation in organisations. As such, strategic international human resource management (SIHRM) and the related issues in workforce diversity in MNCs would become challenging areas of research and managerial practices for academics, management consultants and business managers, respectively. The ability to effectively manage diverse workforces in organisations is crucial in the wake of the increasing proliferation proliferation /pro·lif·er·a·tion/ (pro-lif?er-a´shun) the reproduction or multiplication of similar forms, especially of cells.prolif´erativeprolif´erous
n. of transnational strategic alliances, international joint ventures and HQ-subsidiaries establishments.
Given that SIHRM knowledge and competencies are essential to maximising and capitalising on the synergistic synergistic /syn·er·gis·tic/ (sin?er-jis´tik)
1. acting together.
2. enhancing the effect of another force or agent.
1. capabilities of diverse workforce activities (Cox, 1991, 1993; Cox and Blake, 1991; Cox, Lobel and McLeod, 1991; Jackson and Alvarez, 1992; Jackson and Ruderman, 1995; Adler, 2002), both the regional political and business leaders have placed considerable emphasis on strengthening institutional capacities to develop and implement effective strategies and practices that will provide the necessary foundation for human resources development required to address the challenges of the dynamic labour market in this era of globalisation (APEC, 1999, 2000b, 2001a).
From an economic regional viewpoint, APEC officials have acknowledged that human capacity building should be given high priority on the APEC agenda. They recognised the opportunities for result-oriented tripartite TRIPARTITE. Consisting of three parts, as a deed tripartite, between A of the first part, B of the second part, and C of the third part. partnership among government, business, and education and training institutions, and have emphasised greater cooperative actions so as to give greater impetus to the human capacity building programs within APEC. For example, by increasing collaboration and information exchange with and among other regional and international organisations, the leaders hope to further develop the quality of the labour market; enhance general skills training appropriate to the needs of the regional market, with specific attention to the needs of SMEs; expand executive, professional and technical personnel development; engage all stakeholders Stakeholders
All parties that have an interest, financial or otherwise, in a firm-stockholders, creditors, bondholders, employees, customers, management, the community, and the government. to implement programmes to address the needs of vulnerable populations, in particular, women, youth, migrant workers A migrant worker is someone who regularly works away from home, if they even have a home.
Although the United Nations' use of this term overlaps with 'foreign worker', the use of the term within the United States is more specific. , older workers, disabled and indigenous populations (APEC, 1999, 2000b, 2001a).
From the perspectives of the business organisations, Adler (1980) strongly emphasised the fact that cultural synergy The enhanced result of two or more people, groups or organizations working together. In other words, one and one equals three! It comes from the Greek "synergia," which means joint work and cooperative action. , as an approach in managing workplace diversity, involves a process where managers establish organisational policies, strategies, structures and practices according to the unique characteristics of staff members and clients. This approach recognises the similarities and differences among the staff, and seeks to capitalise on diversity as a resource in designing and developing effective organisational systems and learning. To ensure organisational staff are able to cope effectively, at the macro-level of the organisational system, management need to develop organisational policies and formal education programmes that: 1) create awareness and increase social consciousness; 2) emphasise the importance of organisational culture, management responsibility and accountability, and program content in diversity education in the workplace; 3) reduce the sense of alienation alienation, in property laws: see tenure.
In the social sciences context, the state of feeling estranged or separated from one's milieu, work, products of work, or self. experienced by minority group employees within the company; 4) actively ensure the incorporation of diversity management as an integral part of overall organisational development and change process; 5) empower of management and employees so that they are more involved in the process of institutionalising diversity in the workplace; 6) create stronger vision and commitment amongst management and staff; 7) review corporate infrastructure, systems and policies that promote diversity; and 8) create internal support systems that encourage diversity of thought and actions of staff from different socio-cultural backgrounds.
At the micro-level of the organisation, management need to integrate and build upon the values and beliefs of the various members of the work team, and develop group strategies that produce better results and solutions, which are more innovative than the single contributions of individual member (Adler, 1980; Maznevski, 1994, 1995). In other words, diversity would lead to synergistic performance when team members are able to understand and appreciate each other, and capitalise on one another's experiences, knowledge and perspectives. Through effective communication, members would be able to evaluate problems and situations from various viewpoints, determine underlying cultural assumptions and create a common social reality, ascertain and explain culturally synergistic alternative solutions appropriately, and establish agreed-upon norms for interaction (Adler, 1980; Maznevski, 1995).
As the world economy becomes progressively more global in nature, business corporations are engaging in increasingly complex and interdependent operations across national borders. A key factor in organisational success involves closer collaboration between the headquarters and subsidiaries to establish universal standards, while maintaining business operations that identify with possible local interests. In this regard, there is greater need for management to align organisational development with a more culturally responsive orientation, to enhance effective international human resource management. This is essential as more staff from different nationalities is engaged to meet organisational objectives. The increasing interaction of staff from diverse sociocultural so·ci·o·cul·tur·al
Of or involving both social and cultural factors.
soci·o·cul backgrounds in organisations has serious implications for management in terms of international human resource development. Academics, researchers, business leaders and managers have stressed the fact that there are dynamic changes in the composition of employees in organisations, from a traditionally homogenous homogenous - homogeneous nature to a more heterogeneous characteristic. Business managers and leaders must fully understand and appreciate the extent of the complexities that workforce diversity would create for their organisations, as more MNCs become increasingly multinational and multicultural mul·ti·cul·tur·al
1. Of, relating to, or including several cultures.
2. Of or relating to a social or educational theory that encourages interest in many cultures within a society rather than in only a mainstream culture. in nature.
Erez and Early (1993), Early and Singh (1995), and Early and Mosakowski (2000) have stressed that diversity could bring potential organisational benefits, such as greater creativity and innovation in human resource management and development. A major consideration for managers is the wide scope of behaviours, attitudes, and values of the diverse staff across socio-cultural and national boundaries, which are bound to affect organisational processes. Thus, it is crucial for managers to distinguish how staff of different socio-cultural backgrounds could be interacting within the organisation, and identify how perceptual per·cep·tu·al
Of, based on, or involving perception. effects may be manifested in the multinational-multicultural group relationships (Cox, 1991, 1993; Cox and Blake, 1991; Cox et al, 1991; Adler, 2002). Consequently, the extent of diversity in the workplaces also has serious implications for the regional labour market in the Asia Pacific. APEC member countries, including Singapore, have recognised the opportunities for human capacity building in the region. Not surprisingly, the APEC members have endorsed the Human Capacity Building Initiative, aimed at developing concrete, responsive and well-prioritised strategies in promoting collaboration, including the sharing of experiences and best practices in human resources development and labour-management policy formulation.
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Table 1: HQ Orientation toward Subsidiaries in an International Enterprise Organisation Design Ethnocentric Polycentric Geocentric Complexity of Complex in home Varied & Increasingly organisation country, simple independent complex & in subsidiaries interdependent Authority; High in Relatively low Aim for a decision-making headquarters in headquarters collaboratively approach between headquarters and subsidiaries Evaluation & Home standard Determined Find standards control applied for locally which are persons universal & & performance local Rewards & High in Wide variation; International & punishments; headquarters, can be high or local execu- incentives low in low rewards for tives rewarded subsidiaries subsidiary per- for reaching formance local worldwide objectives Communication; High volume to Little to Both ways & information subsidiaries and from between subsi- flow (orders, headquarters; diaries part of commands, management advice) Little between team subsidiaries Identification Nationality Nationality Truly of owner of host international country company but identifying with national interests Perpetuation Recruit & develop Develop people Develop best (recruitment, people of home of local people staffing, country for key nationality everywhere development) positions for key in the world everywhere positions for key in the world in their own positions country everywhere in the world Source: Adapted from Chandler, Alfred D Jr (1986). "Evolution of modern global competition". In ME Porter (ed) (1986). Global industries. Boston, Mass: Harvard Business School Press, pp 405-449 Table 2: Nationality and Ethnicity of Sample Labour Force in the Singapore-based MNC Ethnicity Nationality Chinese Malay Indian Eurasian Singhalese Singaporean 270 18 18 8 (54.4%) (3.6%) (3.6%) (1.6%) Malaysian 60 4 2 2 (12.1%) (0.8%) (0.4%) (0.4%) Indian 46 (9.3%) Chinese 30 (6.0%) Indonesian 22 (4.4% Filipino 4 10 (0.8%) (2.0%) Total 386 28 68 10 2 (77.8%) (5.6%) (13.7%) (2.0%) (0.4%) Ethnicity Nationality Filipino Total Singaporean 314 (63.3%) Malaysian 68 (13.7%) Indian 46 (9.3%) Chinese 30 (6.0%) Indonesian 22 Filipino 2 16 (0.4%) (3.2%) Total 2 496 (0.4%) (100.0%)