Globalisation, business culture, and management of culturally diverse teams in multinational corporations

Globalisation

By their nature, multinational companies have culturally diverse social capital, and need to adopt strategies to maximize the benefit that this capital has to the business. The field of human resource management plays a significant role in unlocking this social capital. Job descriptions and benefits programs provide motivation for employees that fits with their individual and cultural needs, in addition to meeting the needs of the organization. This paper will outline some of the issues with respect to unlocking social capital within the multinational corporation.

Social Capital

Taylor (2007) notes that social capital can be created within organizations. In particular, the relationships within the organization and the relationships that the organization has with external groups and individuals can be critical to success. There are many cultures where social capital is critical to success. The human resources department should be able to understand when crafting job descriptions where social capital is most valuable, and ensure that adequate social capital is part of the hiring process. This could help the organization choose between the talented individual with no social capital, and someone with great connections. The human resources department should strive to include social capital as a skill or asset in a candidate if it wants to improve the overall social capital of the organization.

It is also worth taking into consideration the role that HRM plays in fostering the growth of social capital within the organization. In a multinational organization, there are many channels by which communication flows. Within those channels, if there is an emphasis on the development of social capital, the organization can foster increased social capital simply by making connections within the organization. Given the importance of social capital in a wide range of cultures, especially those with high power distance and collectivist mindsets, the company should prioritize the development of social capital in HRM in order to equip itself with the tools needed to succeed in a wide range of markets.

Globalisation, localisation

Social capital is likely more important under a globalisation or even a glocalisation paradigm. As Merz & Alden (2008) note, globalisation emphasizes the development of a global culture. There is to some extent a global business culture, in particular at higher levels. The key to globalisation for the organization is that at lower levels there is a lot more interaction than there has been in the past. As a result, the globalisation of business culture is beginning to occur throughout all levels of organizations. The idea of glocalisation is that globalisation takes local forms around the world. Applied to business, the natural implication is that there while there is a trend towards a global business culture, this trend will manifest itself in different ways around the world.

Localisation reflects a situation where a company needs to do business in different ways around the world; glocalisation reflects the company taking a global culture around the world, albeit with local elements. For the human resources department, the local elements can be critical. For example, the emphasis on individual performance can be quite different around the world, and this is likely to be reflected in the types of compensation and benefits packages, or even in the job descriptions for positions around the world. The company might have a set list of global policies, but within those policies there is room for local elements. Perhaps for HRM, the cost of benefits might be fixed globally, but within that cost a number of different approaches can be taken with respect to benefits packages.

Under a globalisation paradigm, social capital is not as important as in the other two paradigms. Globalisation for a British company would typically reflect the presence of British values around the world, meaning that social capital is less important than functional ability. The more localized the company's operations, the more important social capital might be, depending on the culture. The role of HRM in this situation is to understand the approach to doing business internationally at that company, and also to understand the degree to which the company is going to globalize (or not). This will guide the HRM policy with respect to the fostering of social capital.