THE CULTURAL IMPLICATIONS

FOR MULTINATIONAL
CORPORATIONS OF DIFFERENT
APPROACHES TO EMPLOYEE
VOICE

Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION.......................................................................................................................3
DISCUSSION..................................................................................................................................3
Culture and Employee voice............................................................................................................3
Direct voice..............................................................................................................................5
Indirect voice...........................................................................................................................5
Comparison of different nations Culture and its Impact..................................................................5
Approaches to resolve cultural differences......................................................................................7
Conclusion.......................................................................................................................................8
References....................................................................................................................................9

EXECUTIVE SUMMARY
All major MNCs working across globe have lot of challenges
in their day to day operations one among them being adapt ting the HRM practices they follow
to the country they work in . Communication is a important factor in every organization. This
greatly affects the way companies do business and creates value. Different methods and practices
are followed by the organizations depending upon the country of origin of the organization and
the type of business they are in. This essay critically explains the different approaches and
followed by organizations to employees voice and compares their advantages and disadvantages
of the different ideologies.

INTRODUCTION
In todays global market, MNCs plays a vital role. To make the business success and
lead the market MNCs are made and business transformation is done worldwide. In which the
different countries follows different cultures in their country Culture is the characteristics and
knowledge of a particular group of people, defined by everything from language, religion,
cuisines, social habits and art by Kim Ann Zimmermann (2015). People communicate with each
other by different cultural background. Employee voice is the factor which influences the
organizational life through direct or indirect methods which plays an important role in
organizational communication. Computer mediated communication has become very common in
workplace its through email, mobile phones and MSN which facilitate communication makes
work easier. Some people choose face to face communication pattern, it helps to have
relationship with other people directly and some will communicate indirect voice including work
council and some unions. And also through collective bargaining, people contact each other and
change ideas and thoughts with each other freely.
Employee voice plays an important role in the organization in which the environment is
more sympathetic to trade unions, employee rights and supported by new legal regulations
(Ewing 2003). Will discuss more about the cultural implications towards employee voice in
MNCs.

DISCUSSION
Culture and Employee voice
Organization culture is the personality of the organization, which comprised of the
assumptions, values, norms and tangible signs of the organizational members and their behaviors
(Hobfoll, 2001). When the members of the organization working together, they come to sense the
particular culture of an organization. Large organization will follow different culture than the
small organization. Culture plays a vital role in the modern environment, especially in
international business among companies. Different culture represents different thoughts, values
and way of thinking in an organization.

In modern organizations, people work together in the same country may come from
different places even different countries. In which communication between them is of great
important to the development of company. MNCs need to appreciate cultural differences and
manager want to know how organization culture will affect the organization structure. It can be
rectified by proper training and communication.
Employee voice refers to the participation of employees in influencing corporate decision
making. It is also defined by culture on nation and organizational level. Employees are given a
voice through informal and formal means to minimize conflict, improve communication and
encourage staff relation through motivation and fair treatment. Employee participation is a form
of empowerment and motivation that leads to increased productivity and retention.
The term employee voice provides a useful way to examine both its purpose and
practice, which allowed transferring union and non-union, individual and collective. The purpose
of the voice as the articulation of individual dissatisfaction overlapped with notions of employee
contribution through communication channels (Jeffrey and Linn, 2001).
Employee voice is attained through both direct and indirect voice in which they were
as follows:
Direct voice
Indirect voice

Difference between Direct and indirect voice

Direct voice

Unitarist paradigm
Individualism
Union suppression/ substitution
Example US, UK and India.

Indirect voice

Pluralist paradigm
Collectivism
Union acceptance
Example Germany, Netherland and
Scandinavia

Direct voice
Unitarist paradigm is followed in direct voice, it is meant by labor and management
follows the common interests. In which it the management choice or idea they consider the
employee ideas or thoughts. Employee faithfulness will be there and conflict will not arise.
Cooperation among the employees will be there. Management will question the need for trade
union. Individualism is meant by this refers to which the people see themselves as being part of a
group or individual. Example of direct voice is USA, UK and Australia.
Indirect voice
Pluralist paradigm is followed in indirect voice, it is meant by conflict interest of labor
and management. Employee will question for the sole right to manage. Emphasis on resolving
conflict, in which joint approach to resolve conflict is most beneficial. Without the collective
representation, work force is open to exploitation. Example of indirect voice is Norway and
Japan.HR

Comparison of different nations Culture and its Impact

Different countries follow different HRM practices in general. For example the USA , the
India and the UK generally favour direct mechanism , Where as Western Europe prefer indirect ,
as there is a generally a high degree of national system regulation in relation to Industrial
relations (Looise and Drucker 2002).

American culture is highly individualistic which is self focused. It is goal oriented, ambitious
and competitive. Readiness to change and they will try new things. They will be future oriented
and they believe that present ways of doing things are to be replaced by better way. And they are
risk takers and low uncertainty avoidance. Thus they are hostile to trade and prefer the direct
form of employee voice. Their approach assumes that anything restricting management (laws and
trade unione ) has a negative effect on organizations. They claim government policy and even the
views of their employees can impede the success of an organization (Ferner et al, 2005). They
believe the organization must remain market driven and focused on company strategy.

Japanese Culture is collectivism which has a strong sense of community, and they were
competitive and ambitious. Employee will accept hardship without complaints and strong sense
of duty and obligation is followed. They prefer consensus over conflict.
An example of national system represents itself in the development of European Work Council
Directive .EWCD the directive was established by the European union in 1994. It requires that
companies with over 1000 employees operating in two or more member states must establish a
European work council EWC (Dundon et al, 2004). The aim of EWCs is to improve workers
information and consultation rights and achieve synergies between European Subsidies .
Therefore if an MNC decides to embrace the borders of Europe they have statuory requirement
to establish a EWC(Lucas et al 2006).
European countries are more predisposed to towards the indirect form of employee voice
mechanisms and have more trade unions also German law dictates that Union functions for
collective bargaining are exercised in areas such as salary negotiations and job security (Brewster
2002).
Germany has its own form of work councils supplementing the EWCs in general called the
system of co-determination , where by employees have some role in the management of the
organization. (CIPD 2010). This kind of strong institutional arrangements and legislative
underpinning remain something of a tough thing to break for MNCs. This is generally because
not only do MNCs have to adhere to the legislative requirements of the EWCD, but they also
have to comply with the statutory requirements of national works councils which are also
protected by German law.
China being a manufacturing hub and the country known for its iron curtains for media has been
criticized for following poor labor laws and Hr practices by various forums. Foxconn a major
vendor for majority of Electronic industry across the world has been criticized for its labor laws
Apple once a major partner was forced to distance itself from the company after Foxconns
business came under scrutiny for lot of issues like poor working conditions and ethical issues.

Approaches to resolve cultural differences

There are four types of approaches in which they were as follows

 Ethnocentric: Ethnocentric approach is generally adopted by headquarters by sending

employees from the home or parent countries to the host country. In which a team is sent
from home country to help setting up a new plant.
(Brewster, 2002), has opined that the USA being the worlds most successful economy
their organizational practices should be adopted to ensure survival and success
(Ethnocentric)
Polycentric: Polycentric approach involves hiring and promoting employees who are
citizens of the host countries that the subsidiary is operated. Each overseas subsidiary is
treated as autonomous unit which is managed locally.
Regiocentric: Regiocentric approach involves hiring and promoting employees who are
citizens of host countries that the subsidiary is operated. Culture adaptation is not the
problem. Staffs and decision controlled within the organization but presided over by top
management at the centre.
Geocentric: Geocentric approach is used when the companies adopt the transnational
orientation. Mix of home country and parent country managers run the overseas
susbidaries.

Thus MNCs preferences of approaches to employees voice depends on various factors

like the country of origin of the organization ,the country they are operating and the type of
business they are involved in. The major one of influence being the country of origin.
Because many companies believe that MNC generally being large and their culture management
techniques which are already been established and proved to be successful can simply be
transferred to foreign environments. This clearly not the case which often leads to lot tension
within the work environment.

Conclusion
Thus different countries USA, JAPAN, Germany China provided a good example of how
employees voice can cause conflict and tension, as they are on different points on he spectrum in
terms of employees participation and the type of employee voice mechanism they apply.
USA is more towards the direct form of employee voice because they feel if employee is
efficiently managed they do not need a third party to intervene (Royle 2002 as cited in Lucas
et al 2006). This is more applicable to flat organizations which are goal oriented.
Countries like Japan and Germany favor the indirect form of employee voice and the
employee having roles in management of organization through channels such as work
councils and EWCS, it shows that the management is held answerable to indirect form
of voice more transparently than in the direct form or representations .
There has been a general trend to move form collective to individual voices , reflecting
the predominant trajectory of management practices towards convergence within the
liberal market model (as cited in Brewster et al 2007:1252).
Though collective voice remains more significant in Europe and a mix of both the type of
employee voice could complement each other would help an organization working around the
world more effectively. But by looking at the empirical evidence it could be suggested that the
MNCs generally do not embrace the laws in the host country and rather try do the same they
follow in their home country in amore disguised manner .

References
1.Brewster, C., (2002) Transfer of HRM Practices Around the World Human Resource
Manager Across Countries: the cultural dimension, Athens October 17, 2002, Available
at: www.mbc.aueb.gr/hrm/hrconference/Brewster_paper.pdf (Accessed 4 April 2011)
2.Brewster, C., Croucher, R., Wood G., and Brookes, M., (2007) Collective and
Individual Voice: Convergence in Europe Journal of Human Resource Management
18(7) pp. 1246-1262
3.Brewster, C., Sparrow, P., and Vernon , G., (2007) International Human Resource
Management, 2nd edn. London: CIPD

4.Ferner A., Almond P., Colling T., and Edwards T., (2005) Policies on union
representation in US multinationals in the UK British Journal of Industrial Relations 43,
(4) pp. 703-728.
5.Looise Kees, J., & Drucker, M., (2002) Employee Participation in Multinational
Enterprises, The effects of Globalisation on Dutch Works Councils, Journal of Employee
Relations 24(1) pp.29-52
6. Dundon, T., Wilkinson A., Marchington M., and Ackers, P., (2004) The Meanings and
Purpose of Employee Voice International Journal of Human Resource Management
15(6) pp.1149-1170
7. Lucas, R., Lupton, B., and Mathieson, H., (2006) Human Resource Management in
an International Context. London: CIPD
8. Chartered Institute of Personnel and Development (2010) Factsheet Employee
Voice, Available at: http://www.cipd.co.uk/hr-resources/factsheets/employeevoice.aspx#link_2 (Accessed 4 April 2011)