Multinational Companies Within Production Sites and Strategic Regional Centers Which Affects Human Resources Practices

The process of internationalisation of production needs to be studied. Multinational companies have different production sites at various locations with set objectives which have an effect upon the HR practices. Due the development of MNCs (Multi national companies) and different production sites in the developing countries which has a considerable influence on employment in different countries. These MNCs developed their own strategies to achieve its economic objectives.

The liberalisation of economic activities has an impact upon the nature of work of an organisation, employment, labour markets and employee. It is evident that MNCs has opened production sites at various locations around the world and these production sites can be relocated easily according to the company’s objectives. This relocation of production sites of multinational companies affects the employee and HR practices.

The multinational companies are thought agents of change. They bring new information’s and thinking for the local organisations and the latter follow these ideas and standard in the field of HR.

Traditionally, retailing even wholesaling is considered as a localized sector, which means composed of small-scale operations. The introduction of various laws that encourage free

trade or lessen trade barriers through international treaties has made commerce vital to attain economic growth resulting in lesser barriers in worldwide employment.

Huge multinational or national retail chains are considered among the largest businesses in many developed countries, and accounted for a huge share of the approximately US$6.5 trillion in international commercial transactions in 1997.

There are various contributing factor for this phenomenon. Leading among them are the technological advancements (including electronic commerce for instance) introduced, the international movement of enterprises and quickly spreading competition-driven changes such as just-in-time production and sales. Ironically, these are considered both the cause and result of an increasingly integrated and highly competitive global market that deeply affect the organization and human resource strategy of commercial organizations. Despite its development and dynamism, deterioration of employment and working conditions are also getting prevalent causing concern among business organizations.

The trends of regionalization and the effects of global operations have heightened the need to set up HRD strategies to acquire and retain competent workforce for them to maintain competitive market positions. The skill shortages often pertain to managerial and professional skills, clerical and production workers and an overall shortage of IT skills for all economies.

It is important to keep the capabilities of both managers and workers presently working for the business at the same time introduce structural changes to allow a smooth transition to higher value-added industries. The solution for the multi-national companies as well as local companies in production sites and strategic regional centers could be in better forecasting of HRD needs, a cost-benefit training framework, better labor market policy-making, and quality vocational and training programs that are jointly conducted by the government and the private sector.