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International Culture and Communications Assessment 2

Student Name: Lin Zhu Student Number: 12018708 Module Code: BS3S74 Tutor: Michael Murdoch Word Count: 2125 Submit Date: 22-April-2013                                

Topics of culture never fail to arouse people’s attention. There are varieties of different views about the culture. For some it refers to an appreciation of good literature, music, art, and food. For a biologist, it is likely to be a colony of bacteria or other microorganisms growing in a nutrient medium in a laboratory Petri dish. For anthropologists and other behavioral scientists, culture is the full range of learned human behavior patterns. However, according to Edward B. Tylor (1871) defined the culture as ‘the complex whole which includes knowledge, belief, art, law, morals, custom, and any other capabilities and habits acquired by man as a member of society’. A Multinational Corporation has been described as one that has production facilities or other fixed assets in at least one foreign country and makes its major management decisions in a global context (Franklin, 1994). It is said that, “the most improtant issue for a MNCs in the successful conduct of both international business and international HRM is: culture”. (Briscoe and Schuler, 2004:114). The Key to HRM is the link between organizational activities, employees and business strategy. Culture is often overlooked within understanding how employees behave. As Stone (2010, p. 4) defines human resource management (HRM) is to have a focus on managing people within employer and employee relationship. There is a specific link between the productive use of people achieving the organization’s strategic business objectives of which involve a certain time frame and the satisfaction of individual employee needs. There are still some challenges of managing human resources and employee relations when operating internationally presents a significant range of areas for discussion. Many MNC’s cannot overcome those difficulties thus fail to appreciate the complexities involved in international human resource management; moreover, there are some examples evidenced that poor culture management and IHRM may directly lead to the failure of a MNCs when operating its business in the international arena. (Desatnick & Bennett, 1978). The main purpose of this essay is to focus on the theory and practices about the employee voice, which defined as the communication between employer and employees in an organization. Nevertheless, the employee voice takes from different countries and areas can be considered as the implications for MNCs. The theories and experiences in the origin country, which the company located in, might be reasonable while the structure and practices of the same thing may not fit favorably or suitably in other countries where there is a different cultural background to ‘voice’. This essay will critically talk about the culture implications for multinational corporations of different approaches to employee voice by using some empirical illustrations such as the employee voice at McDonalds, etc. It is hard to identify the culture internationally in its entirety because of its complex characteristics and backgrounds. For the aspects of this essay, culture can be refers to the collection of external influences, which can create an environment, and includes such things as knowledge, beliefs, morals, customs, and policies. (Larson and

Kleiner, 2004). In the order words, it is said that a person or a company is not begin with a decided culture. On the contrast, they are trying to adapt to the changing internal and external environment step by step. Therefore, the culture value of a company, especially for the MNCs, is learned in the early and works it up. With the development of the society, culture values become difficult to change due to its stable and sustainability in people’s mind and never fade. Moreover, different people hold the different opinions about the culture. For instance, Hofstede (1991) defines this as ‘The difference between the members of an organization from the thought of another collective programming’. In addition, Schein (1984) describes culture as a set of artifacts and behavior, norms and values and underlying assumptions. Furthermore, Brown (1998) suggests that national culture can affect organizational culture, as the external environment of where the organization exits, can filter through the organization, thus absorbing elements of national culture. The IHRM is the key issue in the MNCs. In such a multicultural world, the MNCs have to accept different culture from all over the world in case to get a border development in the international market. As it was mentioned in the introduction of this essay, the MNCs are successful or not, it’s depends on how well they get on with its HRM practices. Brewster (2007) points out that ‘in an increasingly borderless world, managers need to know how national cultural differences might affect organization structure and processes, notions of leadership, and HR practices’. Employee voice is one of the growing notions in the academic literature on human resource management and industrial relations for the past two decades (Beardwell, 1998); it is always defined by culture on the international and organizational level. Having a voice is crucial, for the organization as much as for the employee. Voice is one of the enablers of employee engagement and it can significantly impact business performance. There are two different types of employee voice. As Boxall and Purcell (2003) defined voice as “a whole variety of processes and structures which enable, and at times empower employees, to contribute to decision making in the firm directly and indirectly. The main different between direct voice and indirect voice is that there is an intermediary to representative the voice of employee, instead of the employee themselves speak their voices out directly. That is also to say, the direct form tends to focus on operational workplace and working practice issues, whereas indirect concentrates on wider strategic matters. Meanwhile, employees’ voices can be heard through direct involvement and/or collective representation with one’s employer. Direct involvement consists of upward problem solving that refers to any technique that managers use to tap into employee notions and opinions whether it be through two way communication processes with management or via specific systems set up for employees to express their employee voice. Collective representation consists of schemes under which employee representatives meet managers on a regular basis in the case of scheduled committees. Participation is not direct between individual employees and their managers but is mediated through representatives.

Bryson (2004) explain that direct voice has less barriers between employers to employees so management can get a better respond to employees various issues and interest. Direct voice while similar to non-union, focuses on building relationship with management by voicing their concern and make suggestions. However, employees who perceived their supervisors to be poor voice managers were less willing to voice their opinions and concern. Bryson (2006) also suggest that one of the most effective ways to encourage direct voice is ensuring that supervisors are approachable and responsive voice managers. On the contrary, some others hold out the indirect form of employee voice. Kelly (1996) claims that union voice is superior, independent, and utilizes collective power, by accessing the views of a third party, which may stands for the direct form is too insignificant to be listened. Ina addition, different geography-based systems lead to different practices of HRM. For instance, in the USA, UK and India prefer direct voice basically while for the majority of the Western European countries they would rather indirect voice. As the existing of European Works Council (EWC), an important feature of the European labor management relations is committee on the behalf within the company, consulting and may even have some decision-making power.   They take a variety of forms, but generally speaking, they are seen as democratic institutions, which stand for the sound of the concerns and interests of the workers. In their strongest form, works councils are with the management decision-making powers in certain areas of corporate policy. In a broader range of the meaning, reducing the labor-management conflicts, and promoting harmonious labor practices are credited by works councils as usual, especially for those focus on the changes in workplace. The directive said that these multinational companies to create the EWCS or so-called employees are beyond the borders of notification and consultation procedures. Thus, an MNC have to establish to the EWC legally if the company decide to accept the borders of Europe (Lucas et al 2006). Take McDonald’s as an example. As we all know, McDonald’s is the world’s largest food service Multinational Corporation. There are more than 34,000 stores worldwide which 18,590 (2011) of them in its headquarter country and own 1,800,000 employees all over the world. From the report of Royle (1999), Germany owns the most McDonald’s Restaurant and the largest number of employees in the Europe. The report about the McDonald’s and its European Works Council by Royle (1999) reported how McDonald's attempts to obstruct and escape the legal consultation requirements in Germany caused by multinationals EWCD in the article. With comparison of McDonald’s in the European countries, the direct and individual approach in the USA will be shown later in this essay. The United States approach is in the completely different way. For the USA, they prefer direct voice more than indirect voice. The companies generally hold the view that all of the voice against management including laws and trade unions will have negative influence to the organizations, which may become one of the stumbling blocks for the success of the organizations. They believe that the company should

focus on its own strategy and keep working on it. As the world’s largest and the most successful economic country, its organizational operation model should be accepted by the other countries all around the world (Brewster, 2002). On the contrary, the German industrial relations systems are one of the most important factors of its economic success. The core of this system is co-determination. In other words, the employee could also have the rights to make a decision of the organization, which means represent the profit of themselves in the form of work councils (CIPD, 2010). As the first country signed the agreement to establish the European Communication Group in 1995 (Royle, 1999),German always been the pioneer of indirect voice Moreover, according to Jacobi (1998), German has it own model, which based on four main principles. The most important among those four is the dual structure of interest representation. As it is mentioned before, the joint decision indirectly involved in the election of workers' representatives and formal institutions which is the German model based on, having rights supported in law. Furthermore, the country holds the view that these rights give employees considerable scope for influence over the management of the business (Royle, 2002). The case study reported by Royle (1999, 2002) reveals the McDonald's management with respect to hostile to the requirements of the business development of the EWC. They spent a great effort to find loopholes of the legislation in order to avoid the establishment of the EWC and marginalized trade unions. For instance, part of their union outsourcing company, employees are no longer entitled to exercise the same powers on behalf of the national level or EWC, etc. In addition, McDonald's operating its system in order to ensure that the representatives were elected salaried from managers, they will be more inclined to the organization's goals, thereby reducing the meaning of trade unions existed. However, under the pressure of employee voice, McDonald’s finally accepted the regular sounds of negotiations with trade union. However, Royle (2002) regard this change as a main way to improve the public image (instead of) with any real desire to adapt to the German system or accept the union as a 'diverse' principle. To sum up, it is obviously that MNCs from different countries own different specific preferences regarding what form of employee representation is implemented, and to what extent their employee voice can influence their future HRM and other strategy decisions. There is no doubt that the organization culture is the basis of the IHRM of a MNC. However, it is not easy for a MNC transfer its own culture to a foreign environment. A huge frustration or even operation failure will be cause if the transfer is not successful. Looking back to this essay, the development of the typical US fast-food giant McDonald’s in German give a good evidence for what result can employee voice lead to. All in all, this is obvious that the mechanism of collecting employees’ voice is still significant, especially among European countries.

Listening to the voice of employees is as important as the core of a company’s operation strategy. However, different culture backgrounds reflect different unique set of value and organizational goals the company aspire. The MNCs should attach the importance to employee voices when focusing on its own enterprise culture, showing a positive connotation company image to the public (Cooper, 2005). Only in that way, the level of its organizational management will increase a lot and it will benefit more to the MNC future developing.                                                                          

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Royle, T. (1999) ‘Where’s the Beef? McDonald’s and its European Works Council’ European Journal of Industrial Relations, 5(3), pp. 327-347. Royle, T. (2002) ‘Multinational corporations, employers’ associations and trade union exclusion strategies in the German fast-food industry’ Employee Relations, 24(4), pp. 437-460. Timming, A. (2007) ‘European Works Councils and the dark side of managing worker voice’ Human Resource Management Journal, 17(3), pp. 248–264.  

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