INFLUENCES OF HUMAN RESOURCE MANAGEMENT IN MULTINATIONAL CORPORATION, A STUDY OF MERCEDES-BENZ ANAMMCO

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TABLE OF CONTENTS

Tite Page                                                                                                                     i

Certification Page                                                                                                       ii

Dedication                                                                                                                  iii

Acknowledgement                                                                                                      iv

Abstract                                                                                                                      v

CHAPTER ONE: INTRODUCTION

Background of the study                                                                                            1

Statement of the problem                                                                                           7

Objective of the study                                                                                                            7

Research Hypotheses                                                                                                  8

Significance of study                                                                                                  9

Scope of the study                                                                                                      9

Limitations of the study                                                                                             10

Definition of Terms                                                                                                    10

CHAPTER TWO: LITERATURE REVIEW

2.0 Nature of Human Resource Management                                                                        13

2.1 Human Resource System                                                                                      16

2.2 Principles of Human Resource Management                                                        22

2.3 Multinational Corporation                                                                                    29

2.4 Brief History of Multinational Corporation                                                          30

2.5 Multinational Corporation Structure                                                                     22

2.6 Foreign Multinational Corporations in Nigeria                                                     40

2.7 Factors influencing Human Resource Management in MNC                               48

2.8 Effect of Human Resource Management on (MNC) subsidiary performance     76

CHAPTER THREE: RESEARCH METHOD

3.0 Research design                                                                                                    82

3.1 Area of study                                                                                                        82

3.2 Procedure for data collection                                                                                82

3.3 Population of study                                                                                              83

3.4 Sample and sampling technique                                                                            83

3.5 Data collection Instrument                                                                                   84

3.6 Validation of Instrument                                                                                      86

CHAPTER FOUR: PRESENTATION AND ANALYSES OF RESULTS

4.1 Presentation of Data                                                                                             89

4.2 Analyses of Data                                                                                                  94

CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS

5.1 Summary of findings                                                                                            108

5.2 Recommendations                                                                                                            111

5.3 Conclusion of findings                                                                                         112

REFERENCE                                                                                                           114

APPENDIX 1

QUESTIONNAIRE

 

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF STUDY.

Globalization is becoming more and more important to companies all over the world. A major component of the globalization of business is the field of human resource management. A trend over the past few years has been to identify the linkage of human resource management with strategy not only on the national level but also on the international level.

Wikipedia defines Human Resource Management (HRM) as the management of an organization’s employees. While human resource management is sometimes referred to as a “soft” management skill, effective practice within an organization requires a strategic focus to ensure that people resources can facilitate the achievement of organizational goals. Effective human resource management also contains an element of risk management for an organization which, as a minimum, ensures legislative compliance.

Human resource management is defined as a strategic and coherent approach to the management of an organization’s most valued assets – the people working there who individually and collectively contribute to the achievement of its objectives.

Storey (1989) believes that (HRM) can be regarded as a ‘set of interrelated policies with an ideological and philosophical underpinning’. He suggests four aspects that constitute the meaningful version of (HRM):

  1. a particular constellation of beliefs and assumptions;
  2. a strategic thrust informing decisions about people management;
  3. the central involvement of line managers; and
  4. Reliance upon a set of ‘levers’ to shape the employment relationship.

Human resource management according to Fisher et al (1990: P6) involves all management decisions and practices that directly affect or influence the people who work for the organization. According to Ikeagwu (1999) the two terms human resource management and personnel management are synonymous but personnel management is the older and more an established name while human resource management is the more up to date title for the field.

Human Resource Management (HRM) is a planned approach to managing people effectively for performance. It aims to establish a more open, flexible and caring management style so that staff will be motivated, developed and managed in a way that they can give of their best to support departments* missions. Good (HRM) practices are instrumental in helping achieve departmental objectives and enhance productivity.

Susan M. Heathfield (2011:12), Human Resource Management (HRM) is the function within an organization that focuses on recruitment of, management of, and providing direction for the people who work in the organization. Human Resource Management can also be performed by line managers.

Human Resource Management is the organizational function that deals with issues related to people such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training.

Human Resource Management is also a strategic and comprehensive approach to managing people and the workplace culture and environment. Effective (HRM) enables employees to contribute effectively and productively to the overall company direction and the accomplishment of the organization’s goals and objectives.

Human Resource Management is moving away from traditional personnel, administration, and transactional roles, which are increasingly outsourced. (HRM) is now expected to add value to the strategic utilization of employees and that employee programs impact the business in measurable ways. The new role of (HRM) involves strategic direction and (HRM) metrics and measurements to demonstrate value.

Gale (1991:56) sees Human Resource Management (HRM) as a term used to describe formal systems devised for the management of people within an organization. These human resources responsibilities are generally divided into three major areas of management: staffing, employee compensation, and defining/designing work. Essentially, the purpose of (HRM) is to maximize the productivity of an organization by optimizing the effectiveness of its employees. This mandate is unlikely to change in any fundamental way, despite the ever-increasing pace of change in the business world.

As Edward L. Gubman observed in the Journal of Business Strategy, “the basic mission of human resources will always be to acquire, develop, and retain talent; align the workforce with the business; and be an excellent contributor to the business. Those three challenges will never change.”

Until fairly recently, an organization’s human resources department was often consigned to lower rungs of the corporate hierarchy, despite the fact that its mandate is to replenish and nourish the company’s work force, which is often cited legitimately as an organization’s greatest resource. But in recent years recognition of the importance of human resources management to a company’s overall health has grown dramatically. This recognition of the importance of (HRM) extends to small businesses, for while they do not generally have the same volume of human resources requirements as do larger organizations, they too face personnel management issues that can have a decisive impact on business health.

Irving Burstiner (1979:98), hiring the right people—and training them well—can often mean the difference between scratching out the barest of livelihoods and steady business growth…. Personnel problems do not discriminate between small and big business. You find them in all businesses, regardless of size, be it a small or a multinational corporation

A multinational corporation (MNC) or multinational enterprise (MNE) is a corporation or an enterprise that manages production or delivers services in more than one country. It can also be referred to as an international corporation.

The International Labor Organization (ILO) has defined an (MNC) as a corporation that has its management headquarters in one country, known as the home country, and operates in several other countries, known as host countries.

Malcolm Tatum (2003), Multinational corporations are business entities that operate in more than one country. The typical multinational corporation or (MNC) normally functions with a headquarters that is based in one country, while other facilities are based in locations in other countries. In some circles, a multinational corporation is referred to as a multinational enterprise (MNE) or a transnational corporation (TNC).

The idea of a multinational corporation has been around for centuries. Some trace the origins of the concept back to the Dutch East India Company of the 17th century, as the corporate structure involved a presence in more than one country. During the 19th and 20th centuries, the idea of a company that functioned in more than one nation became increasingly common. In the 21st century, this business model continues to be highly desirable.

There are several ways that an (MNC) can come into existence. One approach is to intentionally establish a new company with headquarters in one country while producing goods and services in facilities located elsewhere. In other instances, the multinational corporation comes about due to mergers between two or more companies based in different countries. Acquisitions and hostile takeovers also sometimes result in the creation of multinational corporations.

In a world that continues to become more interconnected each day, a multinational corporation sometimes has a greater ability to adapt to economic and political shifts those corporations that function in a single nation. Along with decreasing costs associated with producing core products, this business model also opens the door for diversification, which often makes it possible for a company to remain solvent even when one division or subsidiary is posting a temporary loss.

Possible advantages of a multinational corporation are:

  1. Multinational Companies are able to sell far more than other type of company.
  2. Multinational companies can avoid transport costs.
  3. Multinationals can take advantage of different wage levels in different countries(as in some countries only women and children work, so the wages can be low)
  4. Multinationals can achieve great economies of scale.
  5. Multinationals have less chance of going bankrupt than small companies.
  6. Multinationals can carry out a lot of research and development.

The analysis of the publications in the area of International Human Resource Management (IHRM) since 1980 reveals an interesting trend. In the 1980s, the interest was very much focused on the improvement of HRM measures such as international staffing, repatriation, international compensation, or cross-cultural training.(1) The only concept that has been used to address the strategic orientation of (IHRM) was the EPRG-profile developed by Heenan and Perlmutter (1979).(2) Then, since the beginning of this decade, the focus of (IHRM) research has become more comprehensive and more context oriented.(3) The result has been a growing number of papers which address (IHRM) issues.

Costs are a very important factor when deciding about assigning people to foreign subsidiaries and about the management of the human resources function in a multinational corporation.

For a multinational corporation aiming at efficiency this means that the international human resource management strategy should match the requirements of the nature of work. The criterion of efficiency is conceptualized by the sum of production and transaction costs. An example for production costs in labor market transactions would be the wage of an expatriate. Transaction costs are the costs associated with negotiating, monitoring, evaluating, and enforcing exchanges. They can occur for example when recruiting or controlling employees in the multinational corporation.

Global human resource management (GHRM) includes the same functions as domestic HRM, plus several aspects unique to international management

  • “people challenge” the most difficult for firms becoming international
  • most critical to success, acquiring a competent workforce

1.2 STATEMENT OF PROBLEM

 

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