Social capital and human resource management in multinational corporations

Globalisation

By their nature, multinational companies have culturally diverse social capital, and need to adopt strategies to maximize the benefit that this capital has to the business. The field of human resource management plays a significant role in unlocking this social capital. Job descriptions and benefits programs provide motivation for employees that fits with their individual and cultural needs, in addition to meeting the needs of the organization. This paper will outline some of the issues with respect to unlocking social capital within the multinational corporation.

Social Capital

Taylor (2007) notes that social capital can be created within organizations. In particular, the relationships within the organization and the relationships that the organization has with external groups and individuals can be critical to success. There are many cultures where social capital is critical to success. The human resources department should be able to understand when crafting job descriptions where social capital is most valuable, and ensure that adequate social capital is part of the hiring process. This could help the organization choose between the talented individual with no social capital, and someone with great connections. The human resources department should strive to include social capital as a skill or asset in a candidate if it wants to improve the overall social capital of the organization.

It is also worth taking into consideration the role that HRM plays in fostering the growth of social capital within the organization. In a multinational organization, there are many channels by which communication flows. Within those channels, if there is an emphasis on the development of social capital, the organization can foster increased social capital simply by making connections within the organization. Given the importance of social capital in a wide range of cultures, especially those with high power distance and collectivist mindsets, the company should prioritize the development of social capital in HRM in order to equip itself with the tools needed to succeed in a wide range of markets.

Conclusion

It is expected that, given the importance of emerging markets where social capital is critical, the globalized business culture is going to have more emphasis on social capital than might be present in today's Western markets. The result is that HRM departments in all MNCs will need to have a better understanding of the value of social capital and the role that it plays in the development of opportunities for the organization. Doubtless the company is going to want to find ways to foster greater social capital, both through its recruitment and retention programs, but also through the way that the organization is designed, in such a way that the social capital is improved within the organization by natural process and communications flows.

Works Cited:

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

Merz, M., He, Y. & Alden, D. (2008). A categorization approach to analyzing the global consumer culture debate. International Marketing Review. Vol. 25 (2) 166-182.