How policies vary at Multinational Companies based on its geographical location and operating

base? How do the differences and discriminations effects employee mindset towards work,
their overall performance and the relationship between employee and organization?

The establishment of Free Trade Zones in Asia, North America and Europe several barriers for
trade have reduced drastically. “At the current growth rates, trade between nations will exceed
total commerce by 2015 (Daft, 1997)”. As per to Gupta and Govindarajan (2001), “A global
presence will translate into competence only when a company integrates local market
differences, realizes global economies of scale, and effectively transfers knowledge and
technology across borders.”

Though the selection and recruitment and processes, appropriate compensation, adequate
training and development, satisfaction level for job and security of job all impact in an
affirmative way on entire business and performance of an organization.

In here, we target to explore, investigate, and compare the practices of HRM along with the
differences of practices among operating the Foreign Subsidiary Multinational Company within
Bangladesh. We will be focusing on the differences in practices and any existing discrimination
against the Mother Company Policies while they operate in Bangladesh domestically. This study
has surveyed and compared three Multinational Company which are operating in multiple
countries, as well as Bangladesh. We will have a look at their practices, recruitment processes,
salary and other benefits they offer to their employees here in Bangladesh and we will
scrutinize the differences of HR policy from the parent company while operating at different
geographical locations.

Here we will be discussing One Japanese Subsidiary Food and Biotechnology Company, we will
address this as “Company A”. One Switzerland based FMCG company which we will address as
“Company N” and One consumer packaged goods company that we will be calling “Company U”
and their practices while operating at their home base or other countries and the degree of
differences or similarities in company behavior and structure when they operate in Bangladesh,
the host country.

Usually, the foreign companies adopt many HRM practices and policies of the host country,
while adopting the labor law and policies of the host country is crucial but the adopted
practices of the host country might not always be good or in the best interest of the employees.
Though results show that foreign countries tend to focus more on their home country HRM
practices but often it is only in case of disciplinary actions and rules. When it comes to offering
the same benefits or facilities to their host country employees, the company often falls short or
is just not as proactive as them in implementing regulatory actions or company policies.
Researchers have found that the discrimination is especially major in the selection process of an
employee, their development and training programs, performance appraisal, promotion, career
progress prospect, long term employment benefits, job security and other top management
appointments.

Results show that a blend of HRM practice is usually adopted by the subsidiaries, a mix
consisting of Host Country practice law and regulation and the exclusive ones flowing from the
parent companies.

We see, Japanese companies are under severe influence of their parent company whereas
Europe and USA based companies has adopted a different route with improvised HRM policies
created from a mix of Host country practices and then internationalized the policies aligning
with the parent company regulations and policies.

Here, the Japanese Company, “Company A” has proved to be in a better structural form
comparing to the other improvised policy adopting ones. Though the salary Structure and
Training facilities is not as up to the mark as the parent company offers in their home base and
in other operating countries but most of the benefits offered by the parent company have been
kept same in case of Subsidiaries.
Though the employees aren't satisfied with the salary range but along with the other facilities
offered by the company, they somewhat get compensated enough to hold on. Also, due to a
strict regulatory system in effect, the occurrence of disruptive situations, harassment related
issues and unethical or non-fair treatment of employees is significantly low. The career progress
opportunity is smooth and free of any kind of company or employee politics or influence.

In case of Chinese Organizations, we notice that, they have been successful to install a
perception of good treatment from company to employees. On the other hand, this perceived
impression has motivated the employees to stay loyal and work harder for the company and
repay the favor. In scenarios such as this, “Training and development is used as a tool to
motivate employees” as well as to appreciate and reward them for their commitment to work
and loyalty towards the organization “ cited by, (Sinha, 1997; Tsang, 1994).

In here, the very strict and disciplined work culture expects similar amount of outcome from
their employees as per their global standards, although they are reluctant and not enthusiastic
enough to provide the same standard of benefits, training and development opportunities to
local employees comparing to the global employees in other countries. This gap often causes
some major imbalance. Such as, a company having high expectations but not receiving outputs
accordingly causes a gap between expectations and results at both ends. Just as the company
wants better results from employees, employees aspire to deliver to but often cannot touch the
mark due to lack of proper training, hence frustration grows at both end and effects not only
the company but also the career prospect of an employee. As said by the experts, (Huselid,
1995) says that “Training programs increase employee skills” that “Has a direct impact on
employee productivity” “Also, training is an effective way to overcome the factors that decrease
employee job performance and satisfaction (Xiao, 1996).” “Like job security, training and
development requires a certain degree of reciprocity: a company that continuously trains and
develops its employees is increasing the market value of its employees, which affects
employee's productivity, commitment and may decrease the motivation to quit the company
(Vlachos, 2008).”.

In case of the Switzerland based company, “Company N” the results shows that while they do
offer a lot of benefits same as their parent ones, but the salary structure is significantly low
while comparing to the same company's salary structure at other operating bases. The training
and development programs are acutely inadequate in comparison as well. Organizational
development and training activities varies drastically based on the geographical location and
contexts unique to the country or nation.
But all the regulations are not followed to the point as well, a deep influence of Bangladesh
work culture has been imprinted on HRM practices over the years and modified the practices
accordingly. Thus, local practices have become one of the major driving factors in the case of
workspace practices. Local employees have become comfortable with the accommodating work
environment, and many tend to stick to the job for long years though the pay is less than the
market standard. The lack of training and development results in slightly fallen back employees
than the global standard but the company has accommodated their expectations as per the
ability and output of their employees.
Here, the company and the employee end both has come at a unique point where their eternal
dynamics might not be perfect but mostly works for them, though a sharper HRM practice
would increase the employee performance bar and bring better output for the company at a
broader scale.

At the case of the Third and Final company which is USA based, we notice that the offered
salary and benefits are as per industry standard both locally and globally. Though HRM practices
again are a mix of Host Country and Company Parent Country, but the company has been
successful in upholding some of the core company values and the benefits they offer globally
such as Profit Share, which is not much usual in other subsidiaries or MNCs. However, no place
is above all faults, the work life balance at the organization is disastrous as per the employee
opinion. The workload is excessive and balancing personal life with professional one gets
extremely difficult for employees here. As this organization offers a lucrative salary range thus
the number of interested candidate for job in here is vast, and more interested candidate for
one job not only brings more competition for the other candidates but also brings plenty of
replacement options for the company if some employee isn’t performing as per company
culture, even if they are doing great in completing their task, this issue hampers not only one
individuals overall career growth and evaluation but also hampers employees loyalty building
process towards the company. (Ahmad & Schroeder, 2003; Cardon & Stevens 2004; Guest1997)
says that “ Not every HR practice can be a source of sustained competitive advantage” This
imbalance is causing disruption between employees and their job satisfaction level, though all
other benefits and compensation is lucrative enough in industry perimeter and standard yet
employees are regularly resigning from their positions due to these imbalance issues.