WORKFORCE PLANNING

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• WORKFORCE PLANNING
• CONSTRAINTS AND CHALLENGES
• FACED BY MNCs

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Background

• More complex operating environment for MNCs than
  local firms
• Increasing globalisation
• Competitive advantages crucial to success or
  survival of MNCs
• Strategic workforce planning can make the
  difference!

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Defining workforce planning

• Workforce planning relates to the strategic
  alignment of an organizations human capital with
  its business direction. It is a methodical
  process of analyzing the current workforce,
  determining future workforce needs, identifying
  the gap between the present and future, and
  implementing solutions so the organization can
  accomplish its mission, goals, and objectives

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Objectives

• Identify the internal and external constraints
  faced by multinational companies (MNCs)
• Explain the implications for the workforce
  planning process
• Understand the benefits of a strategic approach
  to workforce planning to MNCs

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Agenda

• Internal workforce planning constraints
• A) Dominant international orientation
• B) Firm-specific characteristics
• C) Standardisation/differentiation?
• II. External workforce planning constraints
• A) Labour markets
• B) Legal and political context
• C) Socio-cultural aspects
• Case Study
• IV. Conclusion and recommendations

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INTERNAL WORKFORCE PLANNING CONSTRAINTS
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Dominant international orientation

• Ethnocentric Foreign subsidiaries managed by the
  Parent Country Nationals
• Polycentric The MNC appoints executives from
  Host country as well as the Parent country.
• Geocentric All positions are filled with
  executives who are best for the position
  irrespective of the nationality
• Regiocentric The MNC operates in different
  regions and transfers the staff members within
  these regions

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Dominant international orientation(cont.)

• Ethnocentric
• Shows rejection towards the HCNs.
• Better communication and coordination.
• High cost of expatriation, resentment among the
  local staff
• unutilized knowledge of the locals
• Polycentric
• Maintains a balance but can lead to conflict and
  less coordination between the Head Quarter and
  the subsidiary.
• Lower cost, culture familiarity, low turnover and
  less language barriers.
• Geocentric
• This leads to the formation of best teams.
• Costly due to training and development needs and
  bringing staff from different countries
• Regiocentric
• Staff enjoys transfer from the Headquarters to
  the subsidiary and vice versa.
• Might limit career development of employees
  (Shen, 2006).

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Firm-specific characteristics

• State of MNCs finances and labour costs
• Fit between firms strategy and staffing
  practices (innovation, quality, cost leadership)
• Firms stage and mode of internationalisation,
  maturity, and industry
• Organisational culture (e.g., Japan and emphasize
  on PCNs)

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Standardization/differentiation of policies and
practices.

• One of the most pressing challenges is to adapt a
  one size fits all theory vs one thats
  specifically adapted for a particular scenario.
• Dilemma between local responsiveness and global
  integration (best practice vs best fit)
• It seems to be best to consider local
  sensibilities while framing and choosing
  policies.

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EXTERNAL WORKFORCE PLANNING CONSTRAINTS
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Labour markets

• Labour supply/demand
• Characteristics
• - Size of candidate pool
• - Age profile
• - Skill set
• - Ethnicity
• Elements impacting on workforce planning
• - Demographic change
• - Economic, industrial, technological
  advancement
• - Social educational policies
• - Competition, globalisation
• - Time pressures to jump on market opportunities
• - Employment relationship, psychological
  contract expectations

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Employment regulation and legislation

• Degree of government interventionism in
  regulating the labour market
• Different levels to consider
• Regional
• National
• Supra-national
• Conflicting national employment laws
• Various areas of concern
• Minimum wages
• Working time
• Equal opportunities fairness
• Dismissal law
• Maternity/parental leave

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Employment regulation and legislation (cont.)

• Immigration issues
• - Acquisition of visas work permits for IAs
• and their spouses/partners
• Host countrys expatriate quota system
• System of industrial relations
• - Power of bargaining
• - Type of contract
• - Degree of flexibility
• - Wages
• - Likelihood to recruit internally uppermost

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Geo-political context

• If political instability
• Concern about local citizens perceptions (eg,
  American expats in Iraq)
• Importance of cultural awareness
• Priority to recruit HCNs v. PCNs or TCNs
• Difficulty to anticipating planning
• Short-term corporate strategy
• and short-term assignment as a result

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Socio-cultural variations

• Culture can affect the leadership style of
  managers
• The working environment may be inappropriate for
  expatriates
• Hofstedes cultural dimensions (1980)
• - Individualism/collectivism
• - Power distance
• - Uncertainty avoidance
• - Masculinity/feminity
• - Time orientation

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Individualism vs Collectivism
Individualism Collectivism
Individuals belong to loose social frameworks People are firmly knit to their social frameworks
Primary concern for themsleves and their families Group loyalty and unity is strongly valued
North American culture Japanese culture
Managers emphasize individual achievement Managers are looking for harmony within the group
problems when expatriates from
collectivist countries have to work in
multinational companies where
individualist values dominate Autonomy and
independance are accepted in individualist
societies, which is not really the case in
collectivist societies
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Power distance
High power distance Low power distance
Leaders have power because they are leaders Inequality should be avoided
Titles, formality and power are emphasized Trust is the key
India, Venezuela, Mexico Denmark, Australia
Leaders have to be strict and severe Managers and employees on the same level
will an expatriate from Venezuela take a
decision without the supervision of its boss? In
Mexico, a leader tends to be assertive with
his/her employees to attain high efficiency which
is not the case in low power distance countries
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Uncertainty avoidance
High uncertainty avoidance Low uncertainty avoidance
Security is key, struggle against uncertainty Tolerance of ambiguity, conflict seen as constructive
Japan and Italy Norway and Australia
Emphasize on stability Value on job mobility
will an expatriate from Italy perform as
well in a risk-taking organisational culture? In
high uncertainty avoidance countries, employees
expect their leaders to follow rules. Leaders are
expected to be procedural and cautious, not
risk-taker.
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Masculinity vs Femininity
Masculinity Femininity
Assertiveness and materialism valued Emphasize on relationships and concerns for others
Money, possessions and performance are key elements Quality of life, people and environment are valued
Austria, Venezuela Norway, Sweden, Denmark
Will an Austrian expatriate easily accept
the feminine style of leadership displayed by a
Swedish manager? In masculine societies, leaders
are expected to be confident, ambitious and
sometimes aggressive. On the contrary, leaders
are expected to be quiet, warm and sensible in
feminine societies (more soft skills).
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Time orientation
Long-term orientation Short-term orientation
Focus on the future Focus on the past and present
China Russia, USA
Will an American expatriate understand
the Chinese way of doing business? Conflicts
concerning priorities and perspectives at work
can arise when employee from different time
orientation culture work together
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CASE STUDY

• Expatriate learning exploring how Japanese
  managers adapt in the United States, and the
  challenges therein.
• Study conducted by
• Yamazaki, Y. and Kaynes, C.D., 2007,
  International Journal of Human Resource
  Management, Vol. 18, Issue 8

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Purpose of the study

• Japan and the US important trading partners,
  but radically different cultures.
• A high concentration of Japanese MNCs in the US.
• Research shows that Japanese managers experience
  extreme difficulty in dealing with their
  counterparts in the USA.
• Japanese and US cultures provide fertile ground
  to understand the disparities that are
  encountered with cross-cultural adaptation.

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Method of Analysis

• Questionnaire distributed to Japanese
  expatriates, as well as their American
  counterparts.
• Kolbs Learning Style Inventory (LSI)
  implemented.
• Focus on studying learning orientations on four
  learning modes concrete experience, abstract
  conceptualization, reflective observation and
  active experimentation.

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Propositions forwarded
Mode of Learning Observed Phenomenon/ Effect Relationship
Concrete Experience Acquisition/improvement of English language skills A direct relationship with respect to time
Concrete Experience Heterogeneity with Host Country Managers An inverse relationship with respect to time
Abstract conceptualization Time spent in the US An inverse relationship with respect to time
Active experimentation Time spent in the US A direct relationship with respect to time
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Propositions forwarded (cont.)

• Expatriates develop multiple mechanisms to adapt
  to a new culture such that they develop greater
  adaptive flexibility to use different modes of
  adaptation rather than relying on a single mode.

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Implications of the study

• Cultural Adaptation of expatriates.
• A switch between learning styles is to be
  emphasized for expatriate success.
• Time needs to be devoted for effective cross
  cultural transformation.
• Significant weightage required on workforce
  planning.

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Conclusion

• Complexities, that encompass
• internal and external influences,
• require HR proactive practices.
• In particular, MNCs should consider the impact of
  firmcontigencies and strategy, as well as labour
  markets, legal political frameworks, and
  culture on workforce planning.

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Recommendations

• Staffing hiring people that suits a particular
  business international orientation and strategy.
• Rewards defining rewards that take into account
  the labour markets and help MNCs to compete.
• Training Development not training only, but
  developing people to equip them with the skills
  required at a given time and for a strategic
  future.
• Planning and strategy looking at the perspective
  of what suits MNCs strategy but also the local
  picture.

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References

• Aycan, Z. (2005) The Interplay between Cultural
  and Institutional/Structural Contengencies in
  Human Resource Management Practices.
  International Journal of Human Resource
  Management, July, 16 (7), pp. 1083-1119.
• Brewster, C., Sparrow, P. and Harris, H., 2005,
  Towards a new model of globalizing HRM,
  International Journal of Human Resource
  Management, 16(6), pp. 949-970.
• Scandura T, Dorfman P (2004), Leadership research
  in an international and cross-cultural context.
  Leadership Quarterly, 15, 277-307.
• Shen, J. (2006) Factors Affecting International
  Staffing in Chinese Multinationals (MNEs). The
  International Journal of Human Resource
  Management, February, 17 (2), pp. 295-315.

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Thank you for your attention Any questions?