Internal and External Factor of International Human Resource Management
Introduction
The rapid pace of Globalization has led to a change in the global economy during the past several decades; it is believe that factors such as trade liberalisation, access to cheaper labour and resources, similarity of consumer demand around the world, and advances in technology and communication has widened the market of consumption, investment as well as production on a global scale. These globalization driven factors created new challenges and global competition for businesses around the world thus as a response many companies decided to expand their operation across national borders in order to be competitive. A company that operates their business in at least one country other than its country is called Multinational Corporation (MNC). According to Claus (1998) the two fundamental differences between the domestic and international company are the spread of geographic location of the company’s operations and the nature of multiculturalism. The number of MNC is increasing faster than ever where today its not surprising to find major MNCs such as McDonalds, Toyota, Nike and Microsoft almost in every country. Tayeb (2005) indicate that MNCs played a powerful and dominant role in the globalisation where they are considered to be the main vehicle that enables goods and services to move around the world. However, when company decided to internationalise their operation they will be expose to various environment, culture, legal and political differences and in order to operate successfully they should be able to modify its products and services to meet the cultural preference of their foreign customer as well as able to adjust their operation to comply with the local legal requirement (Tayeb, 2003).
To operate its subsidiaries MNC will likely to employ local people and manager, it should be noted however that these employees came from a different organization culture background with different working styles compare to their employees in the
The rapid pace of Globalization has led to a change in the global economy during the past several decades; it is believe that factors such as trade liberalisation, access to cheaper labour and resources, similarity of consumer demand around the world, and advances in technology and communication has widened the market of consumption, investment as well as production on a global scale. These globalization driven factors created new challenges and global competition for businesses around the world thus as a response many companies decided to expand their operation across national borders in order to be competitive. A company that operates their business in at least one country other than its country is called Multinational Corporation (MNC). According to Claus (1998) the two fundamental differences between the domestic and international company are the spread of geographic location of the company’s operations and the nature of multiculturalism. The number of MNC is increasing faster than ever where today its not surprising to find major MNCs such as McDonalds, Toyota, Nike and Microsoft almost in every country. Tayeb (2005) indicate that MNCs played a powerful and dominant role in the globalisation where they are considered to be the main vehicle that enables goods and services to move around the world. However, when company decided to internationalise their operation they will be expose to various environment, culture, legal and political differences and in order to operate successfully they should be able to modify its products and services to meet the cultural preference of their foreign customer as well as able to adjust their operation to comply with the local legal requirement (Tayeb, 2003).
To operate its subsidiaries MNC will likely to employ local people and manager, it should be noted however that these employees came from a different organization culture background with different working styles compare to their employees in the
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