Reasoning on Transnational Companies Choosing a Multinational Task Force

Why do transnational companies choose a multinational work force? Justify your response with advantages and disadvantages of using expatriates.
A transnational company is one that spreads out their operations in many countries, sustaining to higher levels of local responsiveness than would likely be received by a multinational company which identifies itself with one national home and then maintains foreign subsidiaries.
A multinational work force is one that is brought together by employees comprised of different cultures. Cultures vary vastly, for example, those deeply ingrained into an American culture will hold importance on different values compared to someone of an Asian culture per se.
For transnational companies, you would expect that they adopt a native approach so that there is ease operating in a possibly unfamiliar foreign setting. Recruiting locally can often mean gaining an advantage in a new market as the employees will be accustomed to the practices of that specific company and may have built a network of local contacts. For example, this could be utilised in bargaining with suppliers; knowing what customs to follow, and a vital ‘understanding of local negotiating strategies’ whilst knowing the local language can create a harmonious working relationship which might otherwise have been rejected.
Competence is needed to gain a foothold, so when considering why to go against use of locals to establish and maintain a successful operation, the benefits of expatriates need to be considered. Expatriates are those “living outside of their native country” often due to work reasons.
An initial reasoning for bringing expatriates in is due to being unable to find locals who have the specific skills required; for instance, expat English teachers residing in Thailand are there as they may have abilities of the English language that locals lack. So sending employees from the host country can be beneficial in helping new local employee’s best implement the working business culture. Additionally, this means they are also likely to have understood knowledge of operations on a global scale and thus, help to educate the local workers on how to meet company objectives. This is seen as a possible low risk manoeuvre as costs may be at a minimum; a result of the fundamental understanding of processes being at hand.
This can be disputed as the necessity of flexibility and adaptability from the expat means that changing factors can offset their value. The Lee and Croker’s (2006) study concluded findings such as: the greater the complexity of the task, the lesser the capability of the host managers and the greater the cultural difference, then the greater is the perceived need for the expatriate’s training.
Worryingly, if the expat is unable to adapt, or their productivity is slowed until full training is completed in the foreign setting – such as overcoming language barriers – then it can disadvantage the transnational company in the local market. What may be forgotten is that a willingness to learn the language can hold more importance than actually knowing it; meaning that by showing an interest in the culture can only facilitate progress.
When looking at the motives of a transnational company, the global scale needs to be considered. They are functioning in several markets; meaning several differing locations, socio-economic and ethnic groups factor into decisions. Thus, choosing a multinational workforce provides a more culturally diverse set up, and therefore, allows them to interact in accordance to the aforementioned factors. The diverse workforce should be a reflection of the society in which the company operates; ranging from aspects like ethnicity to age. This both pleases stakeholders and can create opportunities in regards to increases in creativity due to the diverse perspectives of the workforce.
If expats are brought in, they need to successfully pick up on things such as nonverbal cues and hold competency in their management styles so they can envisage the best methods in their new setting. This can offset any negativity that could arise from workers who otherwise might feel disrespected.
Potentially, an expatriate has been chosen as they have proven their loyalty to the company and therefore, puts the employers at ease when delegating great responsibility in those maintaining subsidiaries.
The introduction and imbedding of successful cross-cultural management will weaken the culture shock and the expats should become capable of forecasting when cross-cultural conflict will arise.
In a general sense, the implantation of cross-cultural management allows for communication gaps to bridges so you can reap the benefits of the diverse opinions leading to creativity; whilst maintaining harmony to enhance productivity.