Cross-Cultural Issues in HRM

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Human resource management can be described as the management of employees in the organizations. The human resource management actually is part of the organizational department which is concerned with personnel management and development of functions. Cross cultural human resource function is very important for effective goal achievement in circumstances where a particular organization has other companies established in various countries with different trade unions structures and cultures.

Additional, this concept is very important to the human resource department especially when it comes to issues revolving around proper maintenance of employee relations through the established trade unions. The concept of effective cross cultural management especially if the organization has other companies situated in countries with different cross cultural trade unions structures as well human resource management is very important (Alon & Higgins, 2005). This implies the human resource management department should therefore put in place specific management strategies which actually ensure proper articulation human resource functions between the company and the trade unions in those specific countries (Blyton & Turnbull, 2004).

Given the fact that cross cultural competencies is very important throughout the organization, Human resources management therefore need to put in place organizational strategies which ensures that the company successfully achieves its mission and goals through the set up cultural diversity (Bunting, 2004). The human resource managers therefore need to develop knowledge on the various cultural factors affecting both the domestic firm as well as the global firms. To achieve this effectively then it implies that human resource managers need to put in place strategies that will perfectly assist in managing the organization effectively in this multi-cultural diversity work environment (Calmfors, 2004; Carter, 2005).

Trade unions are very important in every country as well as organizations. This is with the fact that trade unions actually ensure proper implementation and enforcement of rules which are concerned with fair globalization and promotion of employee development. This therefore requires that companies operating in a multi-cultural environment with different trade union structures and functions should develop proper human resource strategies which actually ensure proper management of the companies (Alon and Higgins, 2005).

The various strategies adopted by the trade unions are in effort to respond to the various issues of globalization. They address the various issues that are related to the trade unions. Globalization in return has had so many effects both positive and negative ones.

Negative effects include the loss of freedom of association, child labor, export processing zones, and discrimination and the positives ones can be related to steps made in enabling workers to organize themselves trans-nationally, negotiation with companies on level that is deemed to be global, and solving of global issues related to discrimination based on gender and sustainable development with players from all the world (Bunting, 2004). To begin with the first strategy may include;

Multinational companies and the trade unions

The overall behavior of the multinational enterprises has changed over time. There is a noticeable difference of the multinational enterprises (MNEs) over the decades like changes of management methods towards local organizations that are said to be important. Growth of the company leads to more responsibilities being given to the local management but sadly enough, the reason for this is because of lower national social standards. This is what has led to enforcement of good corporate governance. On global level the business relationships have changed and this has brought with it challenges with the trade unions. Even with these changes, the bargaining structures need not change or else they become outdated or invalid (Ryde, 2004).

One of the major attributes to globalization is outsourcing. In some of extreme cases large multinational companies do not produce anything as the products are brought by suppliers. Another issue is increasing power of the MNEs. With the issues of relocation to countries of lower wage rates and low standards the MNEs are in a better position to put pressure on the trade unions of these countries. As the ease of accessibility to countries that could not be accessed before increases, the MNEs have found t possible to operate even in those countries where the external control of their practices is difficult (Ryde, 2004).

Global Union Federations (GUFs) are the organizations that are put into place to deal with the multinational companies. They are in a better position to deal with problems related to these companies as they have the information, experience and necessary connections to trade unions from their industries all over the world. GUFs mainly aim at MNEs in their sector or industry with the main aim being to defend rights of workers in a particular company while at the same time employing their knowledge about the companies.

GUFs too aim at establishing good relations with the companies and most of them are better than others as they involve discussions and negotiations between GUFs and the companies (Calmfors, 2004). As GUFs continue to develop god relations with the companies, they are allowing them to solve issues before they arise and also giving them a chance to bring up new issues for discussion (Ryde, 2004).

Fair corporate governance and accountability

In order for the organization to ensure high levels of company coordination and productivity between three companies, it is necessary for the human resource managers to identify the multinational trade unions structure that exists between the three cultures through proper corporate governance and accountability. Fair corporate governance and accountability is very important concept for a company which has its sub branches actually located in various cultures (Evans, 2002).

Therefore, if we have a case example of Microsoft Corporation, this is a company that exists in many different countries. The level of trade union engagement will therefore vary in the United States where it has its headquarters, in the UK and China where it has offices. When organizations exercises fair corporate governance through human resource management this actually acts as a basis for increasing productivity as well as providing employee work satisfaction.

Through this strategic the organization will strive to ensure that national labor rights are strictly implemented and followed by the organization through the human resource function. Additional, this will lead to the creation of voluntary corporate codes of conduct which actually will be introduced through the public relation office hence ensuring high levels of employee satisfaction and rights through the trade union (Blyton and Turnbull, 2004).

Furthermore, the company should identify various trade unions existing in those particular countries by implementing a company campaign that promotes international framework trade union rules and standards through proper corporate governance and wider market integrity. Moreover, the company should put in place regulatory systems which actually ensure effective employee labor rights implementation and enforcement (Farnham, 2002).

To effectively achieve this organization need to put in place company objectives that are in line with the trade unions management and also through proper employee supervision. The shareholders too should be in a position to control the behavior of the company in which they have invested. In response to this, they should expect the company to maintain high standards of corporate responsibility and this can be achieved when the directors, shareholders and other stakeholders work together in defining the objectives to be pursued by the company and providing the necessary supervision to the executives entrusted with running of the company (Carter, 2005).

Working closely with other global partners like International Confederation of Free Trade unions and world Confederation of Labor, TUAC is giving the opportunity maintain and encourage enforcement of OECD guidelines for the enterprises operating internationally, revised and developed by governments in collaboration with businesses, labor unions and the NGOs. They are mostly targeting good corporate behavior, that is basically addressed to companies based in countries that follow these guidelines but applying to their operations worldwide and covering 85% of total foreign investment.

The laid down guidelines comprises of, general policies, disclosure of information, industrial and employment relations, curbing of bribery levels, environment, competition and the taxes. Every country is supposed to set up National Contact Point whereby, incase of violation of any of these guidelines, he trade union can raise the case. The trade unions therefore use these tools effectively in relation to multinational corporations to ensure that the laid down policies on social responsibility are followed strictly while closely working with the governments of the respective countries.

Use of International Framework Agreements for social dialogues

International Framework Agreements (IFAs) are used by enterprises operating internationally to prescribe the rules of conduct for these companies (Erne, 2008). They are very important tools for ensuring that a company actually runs effectively in a multicultural diverse work environment. Reason for this is that the international framework agreements facilitates the enterprises in developing rules that lead to better conduct by transnational companies for trade purposes.

Additional, these agreements help the organization to negotiate joint labor agreements through other trade unions organizations such as Global Union Federations (GUFs) and other institutional trade unions established in those particular countries. Additional, when company adapts this of strategy it will actually assist the company to resolve issues related to employee rights through the established trade unions (Grubb, & Martin, 2001).

Moreover, these agreements act as a tool for dealing with employee labor issues raised through globalization. Secondly this strategy actually assists the organization to identify the various trade unions functions and structures which in the end leads to increased organization intensification efforts. Additional, this strategy will help the organization to effectively put in place as well as develop proper employee practices and policies among the three companies (Tosti, 2002). Furthermore, these agreements will help the organization to identify other non- governmental organizations or institutions operating in those particular countries through building of alliances which can assist the organization to negotiate trade union agreements and employee work place rights (Mullins, 2005).

International Framework agreements therefore are said to be the formal recognition of the social partnership at a level acceptable globally which actually is necessary for multinational companies which often have to do with different trade union structures and cultures. These agreements’ therefore are very important as they reflect the commitment that particular company has on the issue of international labor standards.

When the company utilizes this principle it will actually assist the organization to effectively operate in this diverse cross cultural environment without any problems. This is because it actually forces employers to sign up commitment agreements which ensure that employers observe good industrial relations (Guest, 1999). Furthermore, they will help the organization to effectively fight for its employee rights through proper coordination by other companies operating in those particular countries. International labor unions therefore are very important in ensuring that a company which is operating in a multi-diverse environment works properly in line with the trade unions existing in those particular countries (Turner, 1993).

Additionally, they provide room for employee collective bargaining as well as good industrial relations through development of new employee work force trade unions rules and policies. These rules reflect a commitment by the organization to observe labor standards that are of core importance internationally. When employers sign up, they show that they are in favor of industrial relations that are good in regard to workplace and that they are responsible for their supply chain as a whole an d are pen minded when it comes to activities of the trade union (Farnham, 2002).

Enlarging the trade union agenda

To effectively ensure high levels of production and employee satisfaction for organizations which is operating in different countries that have different trade union structure and histories then it is very important for the organizations to enlarge its trade union agendas. With the emerging trade unions movement in the recent past it is very important for organizations operating in multicultural environment to actually focus and respond to issues that are concerned with globalization (Grubb and Martin, 2001).

This actually implies that organization should therefore engage itself with other larger multinational organizations such as IMF, World Bank, as well as other United Nations Programs and Funds such as IMF, World Bank Group, WHO, WTO which actually tend to have a high influence on the trade union rules and organizations (Mullins, 2005). Furthermore, these organizations actually help various companies which operate in cross cultural diverse environment to actually implement fair trade unions and globalization.

An example is the inclusion of the employee standards which actually has been stipulated by the World Bank towards ensuring that a particular company actually put in place rules and policies that ensures good employee relations as well as ensures proper company coordination through proper employee supervision (Varner & Beamer 2005).

Network and alliance building

This is can be considered as a fourth strategy for a given company that is operating in three different countries when it comes to issues concerning human resource management. Human resource managers therefore should aim at building strong networks between the trade unions in relation to global production systems. Human resource managers actually can achieve this through transitional cooperation which actually is a method that ensures effective coordination between the three companies as well as the trade unions.

When an organization uses this strategy it actually led to the establishment of sophisticated human resource management strategies both at the local level production and global level production. Actually these systems help an organization to develop quick responses in situations that require employee sourcing decisions as well as when it comes to resolving particular employee conflicts in the organization (Varnol, 2005).

Apart from this strategy providing quick response for the organization when it comes to conflict resolutions it is very important for the organization in identifying opportunities in the labor market. Employees can take advantage of opportunities that comes with concept of value chain by adopting relevant unions that can raise their bargaining power.

International employee labor standards development

The international labor standards are useful in ensuring that the working conditions are of the required standard. This can be achieved through the human resource department developing international employee standards through proper trade unions negotiations. This can be done through proper labor motivations and international community. The international labor community actually is a movement which put pressures on various countries to develop proper trade unions in line with the employee rights.

This can also be achieved through proper global Unions regulation, taxation, and transparency (Mullins, 2005). Promotion and implementation of international labor standards is very important tool for achieving as well as implementing fair globalization. When a company uses this strategy it actually develops strong social and economic policies which allows the human resource managers to develop a collective bargaining and effective organizational structures for its employees and the trade unions.

Social dialogue and employee involvement

Social dialogues and employee involvement is a very important strategy for a particular company which has three other companies operating in various cultures. Human resource management therefore can use this as one of the strategy to address this concept. With the fact that organizational changes affect the core employee work organizations it is very important that human resource mangers actually implement a work environment that will support and ensure good employee involvement.

This may take the form of proper cooperation between the department of human resource and the trade unions through good employee dialogues, consultations and open communications (Wheen, 2004). Communication can be approached either from the employees to the managers or from the managers to the employees and the management should ensure that this is carried out properly through constant monitoring of the employees and work place innovations. Managers therefore should identify the different trade systems then put in place follow up measures which actually ensures proper implementation of organizational functions and the trade unions functions.

Multinational companies and collective bargaining

Responses by trade unions in respect to their collective bargaining towards the various companies vary. In UK, the trade unions have a positive view of the multinational companies and generally accept the idea of foreign investment. In some countries like Poland they sign certain deals like no strike deals so as to attract foreign investment.

Even though the motivating factor behind it is potential employment opportunities which is seconded by the need to for the multinational companies to bring into the local industrial relations environment the employee participation practices and their west European social dialogue (Margison & Meardi, 2006). On the contrary, trade unions in European countries like Belgium have a negative opinion and in other parts of the world they have not supported decentralized bargaining but are slowly welcoming such developments.

More often, the main aim of the trade unions is on how to confront the issue of geographic mobility more so when threat due to relocation arises. When dealing with these issues they have used different approaches like calling to the local government so as to withdraw their subsidies to the multinational corporations that cannot keep the commitment of job guarantee by relocating abroad, negotiation of social places, organizing of customer campaigns among others (Mullins, 2005).

Diversification of the strategies adopted is against any deterministic view of the idea that relocations are necessary and therefore unavoidable and that solving approaches by trade unions are unsuccessful. Methods used to solve the problems vary from bargain for special concessions and considerations to inclusion of political movements that creates room for political dispensation. The strategy adopted depends on the situation and there is need to determine where collective bargaining can be adopted and where it is not applicable (Erne, 2008).

Where there is mobilization, specific approaches will be used so as to address the issue due to the visibility of the multinational companies by the media. Protests to companies operating internationally tend to frequently involve other actors like the non governmental organizations and can even at times lead to emergence of new campaigns. When faced with such instances the trade unions in protest to these enterprises can take legal action even with or instead of industrial action (Ryde, 2004).

The trade unions too counterbalance these enterprises operating internationally by matching their own comparative information. This can take different forms including that of international wage comparison and especially so in low wage countries. In relation to this, the trade unions contacts are very important. Recently network activity is on the rise and more often with the EWCs which has been noted in a number of countries.

UK has participated in lower magnitude than other countries of the Western Europe in the international action a fact that is attributable to challenges brought about by the right to strike and the lack of relevant information that is necessary for those who would wish to participate. This can be said to have rooted from trade unions concentrating most on the plant rather than the company (Meardi et al, 2009). In respect to this, the management should be in a position to know the various alternatives that are available to it in the different countries for the purposes of collective bargaining.


With the issue of globalization, the management of multinational companies is in for a very big challenge. It should be in a position to maintain good relation with the respective governments of the countries chosen for investment, the workers and the trade unions. The management should provide an effective framework on how the various situations can be handled. Human beings constantly seek answers, pursue goals and make plans based on desired outcomes, and it is the responsibility of the management to provide insight on how this occurs.

It is within the managements’ duty to ensure that the issues related to society are addressed using the right approach to make its operations efficient and profitable. Justice (2002) says that corporate social dimension requires an international response which includes involving the business internationally and where appropriate use of the various international initiatives is recommended. International labor organizations should set standard and ensure that there is use of social dialogue for consultation purposes (Justice, 2002).

Company’s management need to work closely with the trade unions so as to develop international labor employees standards which will be respected by the company and the employees. In order to ensure that the employees remain comfortable with the environment even after major changes have been done, the company will need the input of the employee which can be done by use of dialogues with help of the trade unions.

Consultation with the employees makes them feel at ease and therefore comfortable while working which in turn leads to increased level of input. When it comes to alliance and network building, the company should strive at building a strong relationship with the union in relation to global production. Human resource personnel can actually achieve this through transitional cooperation which will ensure coordination of the company’s parent and its subsidiaries and the respective trade unions.

Company’s coordination and productivity in the three countries can be enhanced when the management recognizes the trade unions structures that exist in all the three countries. Fair corporate governance should be the main agenda for all the three companies. With the aid of trade unions and close consultation, the company can achieve these. Hence, trade unions should not be seen as a threat to companies but as a partner who in close consultation can help the company achieve its goals, develop and maintain a good relation with the employees, society and respective governments.


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