Saturday, December 14, 2013

Holla Back!

After few years I've decided to start sharing the daily chores with the world. It wasn't the fact that I have been requested/pushed by a huge group of avid followers to start again, but the mere fact that I have been missing writing my chronicles.

This page will continue to be my monologue- and not a knowledge portal to the world.

I'm writing at a time when the memory has drawn me back to the time I almost stopped blogging- the time of the military backed caretaker government.

In Bangladesh, we are just experiencing a repeat of the drama show of 2007 as we are witnessing the political vendetta dispersed through killing and arson on the opposition again.

Talk about not learning from the past!

I'll continue to keep you and the future myself updated as the events unfold.

Tuesday, August 31, 2010

My Quote

There are million reasons for failure but none acceptable.

Saturday, September 05, 2009

RIP M Saifur Rahman

The country's longest serving finance minister M Saifur Rahman who steered the Bangladesh economy toward a free market path and presided over series of economic reforms died yesterday in a car crash.

The Bangladesh Nationalist Party’s(BNP) one of the worthy politicians was travelling to the capital when his car spun out of control after the driver tried to skirt a cow on the busy Dhaka-Sylhet highway.

Instead, it fell into a five-feet deep ditch with the 77-year-old leader tied up under a seat belt. Local people rescued the ailing leader unconscious but he was declared dead as his body was rushed to Brahmanbaria Sadar Hospital at 3.00pm. He apparently failed to untie his seat belt as he was already in ill health due to prostrate cancer.

The United States lauded the late leader's "critical role in improving the lives and bringing prosperity to millions of Bangladeshis by opening Bangladesh's economy and promoting free market reforms".

A professional chartered accountant who completed his higher study in London, Saifur Rahman was hurled in politics by the late president Ziaur Rahman during the crucial rebuilding period of the nation in late 1970s.

Mr. Rahman was a partner of the famed accountancy firm Rahman Rahman Haque KPMG and placed 12 national budgets during his three separate tenures at the helm of the finance ministry.

A BNP standing committee member, he served president Zia as an adviser and then served his cabinet first as commerce and later as finance minister.

After Zia's death, he served as finance minister in justice Abdus Sattar and to Khaleda Zia, who was prime minister when BNP returned to power between 1991-96 and again between 2001-06.

His reforms during his first tenure under Khaleda Zia are widely credited with putting the country on the free market path and stabilising the country's macro economic health in the ensuing decades.

The country's percentage of poverty dropped to below 40 per cent in 2006 from a staggering 59 per cent in 1991, thanks in large part to the market economy he championed.

According to ex finance adviser Mirza Azizul Islam, "The reforms he initiated during his time as finance minister led the country towards higher growth path. He brought down inflation, fiscal deficit and stabilised macro economy. The country is still reaping the benefits of his economic reforms. If his policies are continued, I am sure the growth will be accelerated further."

Mr Rahman was the first to introduce VAT (value added tax) in Bangladesh in 1992 as part of expanding the tax net and orchestrated major banking reform in early 1990s.

He sought to divest all four state-owned banks including the largest Sonali Bank and privatized scores of loss making state-owned enterprises that have been a big drag on the government’s expenditure.

A deft economic policy planner, Mr Saifur Rahman was elected to parliament for four times, serving both Sylhet and his Moulvibazar constituencies.

Mr. Rahman was born in Bahar Mordon village of Moulvibazar district in 1932 to an illustrious Muslim family.

He joined politics in the early 1950s when as a vice president of Salimullah Muslim Hall he took part in the Language Movement of 1952, for which he was awarded the prestigious Ekushey Padak in 2005.

After graduating from Dhaka Univeristy in 1953, he moved to the United Kingdom to pursue higher studies in accountancy and qualified as a Chartered Accountatnt in 1958.

In his colourful career, Mr. Rahman served scores of local and international organisations, including the Institute of Chartered Accountants of Bangladesh (ICAB), the Bangladesh Institute of Law and International Affairs (BILIA) and Bangladesh Jatishangha Samiti.

He presided over the golden jubilee conference of the World Bank and IMF as elected governor in 1994 held at the Spanish capital of Madrid.

Although I have always been the first one to criticise the Bangladeshi politicians, the contributions of Saifur Rahman to Bangladeshi economy cannot be ignored. I am deeply saddened by the loss of the architect of Bangladesh’s financial reform and pray that he is granted paradise.

Thursday, February 05, 2009

Jammie Dodger: Jacuzzi

I have a new colleague at my workplace. He works in a different department within the same floor but we chat occasionally to keep track of each other’s wellbeing. He is of sub-continental origin-born and brought up in London. I call him Jammie Dodger- purely because of his funny but likeable character.

Jammie Dodger tells us stories that keep all of us at work going in the difficult times. He loves to share his amazing stories. As I have taken the sombre oath of keeping my blog readers entertained, I hereby will share some of his stories.

One of the first stories of Jammie Dodger is of his unique experience at his local gym on the night before his ‘A’ level physics exam.

He apparently decided to go to his local gym to use the Jacuzzi to ‘let off’ some steam before the difficult physics exam. So there he was in his shorts ‘letting off’ steam. Then he in his own words ‘nodded off’. After a while he woke up with the sound of giggling all around him. He woke up and found out that there were about 7-8 girls in the Jacuzzi and all were staring at his shorts with seductive smiles. He looked down and found out that his manhood had snaked out through the passage of shorts and with the waves of Jacuzzi it created an illusion of swaying from one side to the other. He then quickly tucked his manhood back inside the shorts and walked off the place.

He didn’t do very well in that physics exam the next morning as he kept thinking about the girls checking out his manhood!

Tuesday, January 27, 2009

Trousers Island

Bangladesh is becoming the ‘Trousers Island’, if not the Treasure Island, for global apparel importers as local manufacturers are sourcing jeans and other cotton trousers at the cheapest prices and maintaining admirable quality, according to ‘New Age’ of Bangladesh.

The industry’s strength has weighed up with Bangladeshi exporters occupying the number-one position in the US market of jeans and other cotton trousers in December, industry insiders told New Age.

Quoting the latest report of world’s leading market survey organisation Research & Markets, Bangladesh Garment Manufacturers and Exporters’ Association officials said by December Bangladesh controlled 13.82% market share in USA.

The market surveyor, quoting US official data, showed that in 2008 US importers’ procurement of cotton trousers from Bangladesh totalled 299.9 million pieces, up 26.3% from that of the previous year.

Chinese suppliers lost their position to Bangladeshis as their shipments grew by less than 9% to 288.7 million pieces in the year.

Mexico, which was the top exporter of trousers to USA just two years back, stood third, with a more than 10% decline in shipments totalling 224.4 million pieces.

Vietnam stood at fourth position in US cotton trousers market, with 184.2 million pairs of trousers and an export growth rate of 14%.

A Bangladeshi official at VF Corporation’s procurement office in Dhaka points out that with developed backward linkage, local jeans-makers are finding fabrics cheaper locally and delivering shipments within a short period.

‘It is really fantastic to feel that one in every seven trousers sold in the USA is made in Bangladesh,’ he said. ‘Importers are diverting their procurements from other countries to Bangladesh and it is becoming a ‘Trousers Island’.

Bangladeshi suppliers recently received significant orders diverted from Mexico as depreciation of the value of Mexican Peso and some other factors made Mexican trousers costly, Anwar noted.

Abdus Salam Murshedy, managing director of the Envoy Group, a leading jeans supplier to American brands, points out that China’s growing reluctance to low-end products are also diverting many buyers to Bangladesh.

Partex Denim managing director Showkot Aziz Russell said finer quality denim fabrics are being produced in Bangladesh, attracting more procurement by global brands.

Partex supplies fabrics to many jean makers who source all top global brands including H&M, C&A, Marks & Spencer, American Eagle, and Uniqlo.

With a 2-million-yard annul production capacity, Partex is said to be the largest among some 20 local units that are now able to meet more than half of the industry’s demand that earlier had to be fed by imports.

The robust growth in trousers shipments to the USA is also significant for Bangladesh as she earns more than one-third of her entire apparel export proceeds from that country by selling denim and other cotton trousers.

According to the latest official data, in the January-November 2008, Bangladesh apparel exports earned $3.17 billion from the USA, with cotton-based trousers accounting for $1.19 billion and non-cotton trousers $147 million.

Tuesday, December 16, 2008

স্বাধীনতা তুমি

স্বাধীনতা তুমি
রবিঠাকুরের অজর কবিতা, অবিনাশী গান।
স্বাধীনতা তুমি
কাজী নজরুল, ঝাঁকড়া চুলের বাবরি দোলানো
মহান পুরুষ, সৃষ্টিসুখের উল্লাসে কাঁপা
স্বাধীনতা তুমি
শহীদ মিনারে অমর একুশে ফেব্রুয়ারির উজ্জ্বল সভা
স্বাধীনতা তুমি
পতাকাশোভিত শ্লোগান-মুখর ঝাঁঝালো মিছিল।
স্বাধীনতা তুমি
ফসলের মাঠে কৃষকের হাসি।
স্বাধীনতা তুমি
রোদেলা দুপুরে মধ্যপুকুরে গ্রাম্য মেয়ের অবাধ সাঁতার।
স্বাধীনতা তুমি
মজুর যুবার রোদে ঝলসিত বাহুর গ্রন্থিল পেশী।
স্বাধীনতা তুমি
অন্ধকারে খাঁ খাঁ সীমান্তে মুক্তিসেনার চোখের ঝিলিক।
স্বাধীনতা তুমি
বটের ছায়ায় তরুণ মেধাবী শিক্ষার্থীর
শাণিত কথার ঝলসানিলাগা সতেজ ভাষণ।
স্বাধীনতা তুমি
চাখানায় আর মাঠে ময়দানে ঝোড়ো সংলাপ।
স্বাধীনতা তুমি
কাল বোশেখীর দিগন্তজোড়া মত্ত ঝাপটা।
স্বাধীনতা তুমি
শ্রাবণে অকূল মেঘনার বুক
স্বাধীনতা তুমি পিতার কোমল জায়নামাজের উদার জমিন।
স্বাধীনতা তুমি
উঠানে ছড়ানো মায়ের শুভ্র শাড়ির কাঁপন।
স্বাধীনতা তুমি
বোনের হাতে নম্র পাতায় মেহেদীর রঙ।
স্বাধীনতা তুমি
বন্ধুর হাতে তারার মতন জ্বলজ্বলে এক রাঙা পোস্টার।
স্বাধীনতা তুমি
গৃহিণীর ঘন খোলা কালো চুল,
হাওয়ায় হাওয়ায় বুনো উদ্দাম।
স্বাধীনতা তুমি
খোকার গায়ের রঙিন কোর্তা,
খুকীর অমন তুলতুলে গালে
রৌদ্রে খেলা।
স্বাধীনতা তুমি
বাগানের ঘর, কোকিলের গান,
বয়েসী বটের ঝিলিমিলি পাতা,
যেমন ইচ্ছে লেখার আমার কবিতার খাতা।

(শামসুর রাহমান)

Monday, November 17, 2008

Recalcitrant Indian Border Security Force (BSF)

Indian Border Security Force (BSF) who are also termed as 'Border Smugglers Force' by the locals on both side of the border of Bangladesh and India for their involvement of smuggling goods to and from India have caused chaos inside the Bangladesh territory again.

According to the Bangladeshi 'Daily Star', BSF yesterday regretted and apologised for killing three people and wounding another in Maynaguri village in Tetulia upazila of Panchagarh Sunday night, according to Bangladesh Rifles (BDR) officials.

The BSF at a flag meeting with the BDR also assured that such incidents will not recur in future.

The meeting, held at zero line near Majhipara border in Tetulia, decided that a BSF member caught by the villagers would be handed over to BSF after treatment, said BDR officials in Panchagarh.

The BDR team at the flag meeting was led by Col Aftabul Islam of Rangpur sector and the BSF team by R Chandra Mohan from Kishanganj camp in India.

Meanwhile, BDR officials of Panchagarh 25 Battalion said at least 8 to 10 drunken BSF personnel from Nayabari camp in India entered Maynaguri village near Majhipara border, at least 500 metres inside Bangladesh, after 10:00pm Sunday and ransacked several houses.

When the villagers protested this, the intruders entered the house of one Shahidul Islam and fired indiscriminately leaving three people killed and one injured.

The deceased were identified as Mazeda Begum, 25, her one- year-old son Mamun, and Golam Mostafa, 45, a neighbour.

Mazeda's husband Shahidul Islam, who was bullet-hit, and the BSF member held by villagers, were rushed to Rangpur Medical College Hospital. Shahidul's condition was stated to be critical.

Following the flag meeting, people of Maynaguri village who had fled their houses in panic, started returning.

What I don't understand here is the policy of Bangladesh government. If a drunken BSF member has been caught within the Bangladesh territory after killing 3 people and wounding another, why should the government send that person back after the treatment? Why don't they put him under trial according to Bangladeshi law? What kind of spineless policy is this? What message are you sending to the BSF personnel through this extradition? Aren't you sending a message to them that BSF personnel are welcome to come and kill Bangladeshi people whenever they feel like?

I'm really frustrated at the development of this incident because, this is not the first time BSF members have done this. Every two weeks we get news of BSF intrusion in Bangladesh, and if the Bangladesh government doesn't take a strong action this time, this will continue to happen.

For More Information please click here.

Saturday, November 15, 2008

Garment trade grow stronger in Bangladesh despite recession

Bangladesh’s largest contributor to its GDP is getting stronger despite the recession in the developed world. Japanese clothing giant Fast Retailing Co, mostly known by its brand name Uniqlo, has recently started outsourcing low-end products from Bangladesh to boost its sales worldwide. It has opened its local office in Dhaka in September this year.

The company plans to treble its overseas sales within the next two years through selling cheap garments amid global financial recession.

The company's new business plan to brace for low-cost management, and the shortest and cheapest manufacturing and marketing strategy has led it to Bangladesh, a high official of Fast Retailing said.

According to the Daily Star, the company will also start outsourcing home furnishings and fashion accessories from Bangladesh soon, said Koji Yamamoto, an official of Fast Retailing Co in Dhaka.

Besides Uniqlo, such global retail giants as GAP, Zara, Wal-Mart, Tesco, JCPenney, H&M and Next are already operating in the country.

A high official of Fast Retailing said Bangladesh would be the Uniqlo's outsourcing partner to supply clothes both to its Japanese retail shops and other overseas outlets in India and Russia.
The IMF said Bangladesh has lost some grounds in garment trade to Vietnam and Cambodia in its key markets in North America and Europe in 2007 and early 2008, but in the short term it sees no major change in its export outlook.

"Although competition is becoming more intense, Bangladesh's strong market position does not look likely to diminish in the short term," the IMF said in a research paper on Bangladesh's export diversification and external competitiveness.

"Despite the recent mixed performance, Bangladesh retained second position after China in global garment trade," the paper co-authored by IMF's Bangladesh chief Jonathan Dunn said.

Bangladesh exports grew more than 16% to US$14.11 billion in the 2007-8 fiscal year on the back of impressive performance by the ready-made garments, particularly knitwear.

The shipment, however, was negative in the first quarter, but it came back strongly in the remaining three quarters when garment exports grew more than 20 percent to finish the year with a record $10.7 billion income.

The IMF says cheap labour remains the key driver of Bangladesh's garment trade, as a worker in Bangladesh earns only $56 dollar, which is nearly half of what his colleague earns in Vietnam and Cambodia and a third than China.

It also said Bangladesh has diversified its export base in the recent years but still it needed a lot of catch-up work to compete with Vietnam or Cambodia.

The country expanded its number of export products well by South Asian standards, but less than East Asian competitors, it said, adding since 1990 the country increased its number of products from 366 to 673.

"This was a faster rate of increase than Pakistan and Sri Lanka, but slower than Nepal and considerably slower than Cambodia, which quadrupled its number of products."
Another encouraging factor in the garment industries in Bangladesh is the start of backward integration of the garment industries. Local textile companies and accessory factories have started operating further driving down the cost of producing the end products.

Thursday, November 13, 2008

Things you never knew your mobile phone could do!

For all the folks with mobile phones- there are a few things that can be done in times of grave emergencies.

Your mobile phone can actually be a life saver or an emergency tool for survival. Check out the things that you can do with it:

Locked your keys in the car?

Does your car have remote keyless entry? This may come in handy someday. If you lock your keys in the car and the spare keys are at home, call someone at home on their mobile phone from your mobile phone. Hold your mobile phone about a foot from your car door and have the person at your home press the unlock button, holding it near the mobile phone on their end. Your car will unlock. Saves someone from having to drive your keys to you! Distance is no object. You could be hundreds of miles away, and if you can reach someone who has the other 'remote' for your car, you can unlock the doors (or the trunk).

Low Battery:

If your mobile battery is very low you can get access to reserve power by just pressing buttons! To activate, press the keys *3370# and your mobile phone will restart with this reserve and the instrument will show a 50% increase in battery. This reserve will get charged when you charge your mobile phone next time.

Stolen Phone:

To check your Mobile phone's serial number, key in the following Digits on your phone: *#06#. A 15-digit code will appear on the screen. This number is unique to your handset. Write it down and keep it somewhere safe.

When your phone gets stolen, you can phone your service provider and give them this code. They will then be able to block your handset so even if the thief changes the SIM card, your phone will be totally useless... You probably won't get your phone back, but at least you know that whoever stole it can't use/sell it either. If everybody does this, there would be no point in people stealing mobile phones.

Emergency Number:

The Emergency Number worldwide for Mobile is 112. If you find yourself out of the coverage area of your mobile network and there is an emergency, dial 112 and the mobile will search any existing network to establish the emergency number for you, and interestingly, this number 112 can be dialled even if the keypad is locked.

Saturday, October 11, 2008

Should HRM practices in MNCs should be adapted to the local environment to be most effective?


The world is becoming an increasingly smaller place to live in. There has been rapid progression in the arenas of transportation, faster communication channels and financial flows, all owing to advancements in technology. As companies spread their wings in the global scenario, there has been a tremendous boom in international trade and commerce. Markets that were once considered impregnable and safe are facing fierce competition and have become battle grounds where firms fight for market share against both local and foreign companies. Not surprisingly, nowadays a fairly good proportion of workforce in firms, regardless of their nationality, is located in foreign countries. As more companies go global, a new branch of human resource management called International HR management has emerged.

Edith Penrose (1959) shows the firm as an administrative organisation and a collection of productive resources. According to her, HR of a firm is a unique resource and cannot be replicated thereby gives firms a competitive advantage if used well.

With globalisation, Human Resource management has developed over the years from a mere welfare tradition in the past to a more strategic concept. This was introduced by the Harvard model of Human Resource Management developed by Beer et al. (1984), (Wall & Rees, 2001). By locating HR policy choices in a wider social and institutional perspective, it claimed that there existed more stake holders in an organisation other than the management (such as government, employee groups, community etc.), and that business strategy and management were only a part of the other situational factors such as the work force, labour market conditions, laws and societal values.

The evolution of MNC’s characterised by multiculturism and geographic dispersion, has embraced this view of placing organisational resources at the forefront of its global strategy. Bartlett and Ghoshal (2000) mention the change in definitions given by United Nations. In 1973, it defined such an enterprise as “one which controls assets, factories, mines, sales offices and the like in two or more countries.” By 1984, it defined them “As an enterprise in which the entities are so linked, by ownership or otherwise that one or more of them may be able to exercise a significant influence over the activities of the others, and, in particular, to share knowledge, resources, and responsibilities with others”.

In essence, the changing definition highlights the importance of strategic and organisational integration and, thereby, management integration of Human Resource practices located in different countries as the key differentiating characteristic of an MNC. (Bartlett & Ghoshal, 2000). It also alludes to the process of transfer of organisational practices across geographies as a key strategic item in MNC’s quest for global excellence.

Influences on transfer of Human Resource practices

Harzing & Ruysseveldt (2005) discuss the four influences which affect the nature and form of transfer of practices across borders. These are:

Country – of – origin effect: The country in which the multinational originates creates a distinctive national effect on the management style and on the nature of employment practices in general. “MNCs of different national origins behave in significantly different ways.” (Ferner, 1997 in Harzing & Ruysseveldt, 2005)

Dominance effect: Its has been argued by a number of authors that economic dominance of a country also influences the practices in other developing countries in that they try to follow the processes and practices adapted by the developed or dominant countries. According to Harzing & Ruysseveldt (2005), in terms of the dominance effect the transfer of practices could be two way, meaning from the developed home country to the MNC subsidiaries or from foreign origin to the MNC in the developing home country. Thus in the latter case it challenges the country of origin effect.

International integration: The third element of the framework is concerned with the extent to which MNCs are internationally integrated, defined as the generation of inter-unit linkages across borders (Harzing & Ruysseveldt, 2005). Globalisation has no doubt brought the world closer and it’s easier for companies to expand geographically. In order to reach economies of scale and compete, the MNCs tend to segment their operations based on countries or regions through global processes and operations in which they operate. This leads to strengthening of ties and operations between the international segments.

Host country effect: This relates to the difference in cultures and laws that exist in the host countries in which the MNCs operate. What is legal and ethical in one country may not be so in another. Various laws like employment laws regarding child labour, termination laws etc and cultural differences in work environments and social behaviour differ from region to region.

Elaine Farndale & Jaap Paauwe (2007) outline Boxall and Purcell’s, (2003) three primary goals of HR strategy. The first two defined as labour productivity and organisational flexibility represent the goals related to the competitive environment, while the third goal of social legitimacy addresses the institutional and cultural pressures. According to them, the competitive forces create cross-border equity and comparability, and alignment of systems internationally to facilitate an internal labour market. However, this standardisation can lead to conflict between company practices and local prevailing conditions in terms of national cultural phenomena and institutions Boxall and Purcell, 2003 in Elaine Farndale & Jaap Paauwe, 2007). (Farndale & Paauwe, 2007)

While most studies have conceived transfer of practices as implementation, typically examining the extent to which practices in foreign subsidiaries resemble those of MNC headquarters (Rosenzweig and Nohria, 1994; in Bjorkman & Lervik, 2007), Bjorkman in his paper proposed a three dimensional model for assessing whether transfer is accomplished: by assessing to what degree practices are (1) implemented, (2) internalised and (3) integrated in the recipient unit (Björkman & Lervik, 2007).

He explains, while a subsidiary with little autonomy may be forced into implementing headquarters HR practices, its recipients cannot be pressured to internalise the practice. On the contrary, such a standardized strategy may be counterproductive when it comes to internalisation of the practices because organisational members may view the implementation of the practices as having been forced upon the unit (Kostova and Roth, 2002 in Bjorkman & Lervik, 2007). The extent of adaptation of HR practices required is thus largely related to the extent of difference that exists between the parent and host country in terms of national regulations, institutions and culture, as well as corporate strategic choice (Taylor et al., 1996 in Farndale & Jaap Paauwe, 2007). It is evident from the above that, since external factors such as culture, legislation and socio-political environment which affect an organisation internationally differ from region to region the management practices cannot be standardized.

Challenges for Multinational Human Resource policy integration

One of the key challenges to attain social legitimacy is balancing national cultures of different regions with the organisational culture and strategy. Until recently, the dominance of American management theory led to the belief that "one size fits all," that a good manager in the U.S. will also be a good manager in other countries, and that effective U.S. management practices will be effective anywhere. This view is now being supplemented with the knowledge that managerial attitudes, values, behaviours, and efficacy differ across national cultures (Newman & Nollen, 1996).

National culture is defined as the values, beliefs and assumptions learned in early childhood that distinguish one group of people from another (Beck and Moore 1985, Hofstede 1991 in, Newman, Karen L., Nollen, Stanley D., 1996). We use Hofstede's (1993) cultural variables to investigate the relationship between national culture and various structural aspects of HR strategy (Newman & Nollen, 1996). The latter mainly includes compensation practices, selection, staffing, knowledge transfer and performance management. He constructs indices of four cultural dimensions that capture the essence of the differences between national cultures and have been widely accepted as a basis for comparison of cultural groups.

Hofstede's four cultural dimensions (Hofstede 1980, 1991)

Power Distance: Low Power Distance is associated with social egalitarianism and as Power Distance increases, status inequality and distance in social relationships also increase.

Uncertainty Avoidance: Low Uncertainty Avoidance is associated with tolerance of ambiguity and minimized structuring of relationships; high Uncertainity Avoidance leads to elaboration of rules and structures.

Masculinity-Femininity: The Masculine polar type stresses results and the importance of material things, while its counterpart type stresses the importance of feelings and relationships.

Individualism-Collectivism: Individualism stresses and tolerates individual uniqueness, while collectivism defines individuals through their social, group characteristics.

Many authors have researched and found that these values and beliefs which form the national culture get embedded in the systems and practices of a society and economy and consequently affects the HR practices followed by organisations in these regions.

Compensation practices: Boyd (2001) in his paper finds national culture to be associated with the centralization, degree of collective bargaining, and most dimensions of the pay structure (Black, 2001). For example, Gomez and Sanchez propose that providing rewards, which are often symbolic but communicate respect and appreciation, will be particularly helpful in building social capital in largely collectivist cultures found in Latin America. They argue that this communicates a sense of the employee being part of the in-group, which is very important in such cultures. While the higher individualism in the USA, coupled with high materialism, leads most US firms to focus on material individual rewards such as bonuses, stock options and merit raises (Taylor, 2007)

External factors like labour costs, labour demand and supply, competitors’ strategies also influence MNCs’ international compensation strategy. In that the MNC will provide competitive compensation as not to lose valuable employees or talent to competitors (Harzing & Ruysseveldt, 2005). Some companies become international in order to utilise the low labour costs in a particular country. In doing this, the pay structures between the host country and home country would differ even if the work profile of an individual remains the same. This promotes unrest and dissatisfaction between employees, consequently leading to employee turnover.

Other internal factors which influence international compensation practices are the skill sets of employees, employee eligibility such as age, qualifications etc. Thus, though a large number of factors influence compensation structures internationally, an effective compensation strategy is one which is in line with the organisational strategy as well as helps in retaining current talent. However it remains a challenge due to the complex nature of an MNC to have a compensation strategy that will maintain equity amongst all its networks and yet, be within its economic capacity.

Knowledge transfer: As Kogut and Zander (1993) argue, the ability to access the knowledge existing throughout the MNC’s global network is what gives an international firm a competitive advantage over local firms. Creation and transfer of such knowledge largely depend on the ability and willingness of employees to undertake the complex organisational tasks of coordination and communication necessary to use knowledge for competitive advantage (Kogut and Zander, 1992; Nahapiet and Ghoshal, 1998; Storey and Quintas, 2001 in Sully Taylor, 2007). (Gomez & Sanchez, 2005) While companies have traditionally used formal mechanisms of coordination and control such as centralization, standardization, planning, formalized behavioral and output controls, many companies are increasingly resorting to informal mechanisms of control such as participation in committees and teams as well as decision making, and more broadly, control that emanates from an organisational culture of shared norms and values and the socialization of its employees to these values (Jaeger, 1983 & Martinez and Jarillo, 1991 in Gomez & Sanchez, 2005).

For MNCs who need to integrate its intellectual capital, knowledge transfer across its international boundaries is particularly important. This may be challenge due to the differences in social capital and the nature of knowledge – tacit or explicit, that exists in the different firms. When the international counterparts come together, it may be difficult for them to understand and learn from one another due to difference in work cultures, habits etc. Language is a major barrier in this regard. Hence an MNC may have to resort to different training programs or social channels to enable transfer of knowledge between its subsidiaries internationally.

Performance Management: One of the challenges in performance management as part of the MNCs international HRM portfolio is to balance the simultaneous needs for global consistency and for fit with local preferences (Harzing & Ruysseveldt, 2005). The cultural imperative is important because of its impact on acceptable, legitimate, and feasible practices and behaviors (Adler, 1991; Schuler et al., in press). All three components of the cultural imperative are important for MNCs to consider in decisions about: (a) what behaviors to address, (b) which performance measurement and management tools to use, and(c) which tools can be used within the local units (Schuler, Fulkerson, & Dowling, 1991).

US MNCs often use the same appraisal form for subsidiaries as on their domestic employees without translation from English. The use of English forms may neither be readily understood by local employees nor do they easily apply to all jobs in all situations. Even when the forms are translated, they still may not be readily understood by the domestic staff. Schuler, Fulkerson, Dowling (1991) provide an example of study conducted in 1985 at Pepsi-Cola International, where there was no shared value system or vocabulary for describing individual performance. Through the study, Pepsi developed a multinational vocabulary that was used to unite people from many different cultures and countries. For example, "Handling Business Complexity" might translate differently in China than it does in France. Though different in meaning, the outcome is the same: generating sales in the local environment. (Schuler, Fulkerson, & Dowling, 1991).

Performance appraisal in different countries can be interpreted as a signal of distrust or even an insult. (Adsit, London, Crom, & Jones, 1997) Discrimination analysis has shown implications for multinational corporations interpreting the meaning of employee-attitude survey results and managers analysing upward feedback results. He found Thailand, a country high in feminism, was high on items that reflect feminism (e.g., support for training and career development). Brazil was lowest on the set of items dealing with low power distance, low uncertainty avoidance and femininity, confirming Hofstede's findings.

Selection and staffing: Perlmutter (1969) described the three aspects of international orientation as Ethnocentric which is home oriented, Polycentric which is host country oriented, and Geocentric which is world oriented. As per this theory, in an Ethnocentric environment, the company would prefer to select its management from the home country, a polycentric focussed company would give preference of management to host country nationals believing that they would know the practices best in those regions and the geocentric based companies would include in their management anyone fitting the role irrespective of the nationality and could thus be a national not belonging to either the home country nor the host country (Harzing & Ruysseveldt, 2005).

A common practice in this regard within MNCs is expatriation which refers to transferring of managers across national borders for various reasons such as knowledge transfer, expertise or simply job requirements. Another such practice is inpatriation whereby managers from foreign counterparts are called to the centre in the home country. The choice between recruiting from host country, home country or a third country is dependent on the requirement and industry. For eg.: In a travel industry, the company would prefer to hire from host countries where local preferences are known while say in an industry where high management control is required like in the financial sector, the company would prefer home country nationals for it’s management. Applying the cultural dimensions proposed by Hofstede (1980, 2001) Harzing et al, 2005 discuss how it can affect the choice of parent country nationals or host country nationals. According to them MNCs from a national culture that scores high on uncertainty avoidance have a higher tendency to employ parent country nationals for managing their subsidiaries since in these cultures the preference is of being in control. Similarly direct control of subsidiary operations will be high if level of power distance is high since managers in head quarters may feel superior to the foreign subsidiaries. (Harzing & Ruysseveldt, 2005).

A major challenge here is resistance from employees to shift their base due to fear of uncertainty of adjustments, career growth and opportunities. Many factors that can be expected or taken for granted in one's home country simply may not exist in the host country. It is also likely that expatriate managers and their families will have some difficulty adjusting to a new culture, which, in turn, may impact on the managers’ work performance. This difficulty in cultural adjustment should be taken into account when assessing the speed with which an expatriate masters a new job (Davidson, Mendenhall, 1984 & Oddou 1988 in Schuler, et al., 1991).

Concluding remarks:

With the theories discussed above we have tried to understand the structures of MNCs, why and how Human Resource Management is critical to their operations in the global world. What affects its transfer of practices from the home country to its international counterparts, the challenges they face in doing so. With globalisation it is necessary for firms not only to achieve a competitive advantage but also sustain it. It is widely believed that though competitors can copy processes, products and practices, what remains unique to an organisation is its human capital. This cannot be replicated and is a major contributor to sustaining a competitive advantage if managed well. Though globalisation has brought the world closer together but the social, economic and political cultures will always differ and cannot be standardised, Human resource Management plays a critical role in trying to maintain equilibrium through different practices across national borders. There has been a lot of research and it’s evident that HRM needs to adapt to diversity in order to cater to the human element that exists and differs across borders. However to what extent it can justify in doing so is relative to every industry and needs to be researched into much further.


1. Adsit, D. J., London, M., Crom, S., & Jones, D. (1997). Cross-cultural differences in upward ratings in a multinational company. The International Journal of Human Resource Management , 385-401.

2. Barlett, Ghoshal, & Birkinshaw. (2003). Transnational management: Text, Cases and Readings in cross border management. Singapore: McGraw - Hill.

3. Bartlett, C. A., & Ghoshal, S. (2000). Transnational Management (Third ed.). Singapore: The McGraw-hill Companies , Inc.

4. Björkman, I., & Lervik, J. E. (2007). Transferring HR practices within multinational corporations. Human Resource Management Journal , 17 (4), 320-335.

5. Black, B. (2001). National culture and industrial relations and pay structures. LABOUR: Review of Labour Economics & Industrial Relations , 15 (2), 257-277.

6. Farndale, E., & Paauwe, J. (2007). Uncovering competitive and institutional drivers of HRM practices in multinational corporations. HUMAN RESOURCE MANAGEMENT JOURNAL , 17 (4), 355-375.

7. Gomez, C., & Sanchez, J. I. (2005). Human resource control in MNCs: a study of the factors influencing the use of formal and informal control mechanisms. International Journal of Human Resource Management , 18847-1861.

8. Harzing, A. -W., & Ruysseveldt, J. V. (2005). International Human Resource Management (Second ed.). London: Sage Publications Ltd.

9. Newman, K. L., & Nollen, S. D. (1996). Culture and Congruence: The fit between management practices and national cutlure. Journal of Internationl Business Studies , 27 (4), 753-779.

10. Schuler, R. S., Fulkerson, J. R., & Dowling, P. J. (1991). Strategic Performance Measurement and Management in multinationa corporations. Human Resource Management , 30 (3), 365-392.

11. Taylor, S. (2007). Creating social capital in MNCs: the international human resource management challenge. Human Resource Management Journal , 17 (4), 336-354.

12. Wall, S., & Rees, B. (2001). Introduction to International Business (First ed.). Great Britain: Pearson Education Limited.