Globalization continues to define and change the modern world in many ways (Tjosvold and Leung, 2003). Today the world is experiencing profound changes brought about by globalization in many ways that constitute human life. Many countries around the world today cooperate in many aspects of financial, social, political, and cultural. In other words, there is a lot of interdependence among different nations. Nevertheless, one aspect that has emerged from global forcers is the growing internationalization of companies. Internationalization is the reason for the many multinational corporations (MNCs) around the world (Noorderhaven and Harzing, 2003).
Numerous challenges face MNCs located in different parts of the world. Such challenges may include issues of culture to management, regulation, and growth (Shieh and Wang, 2009). The response to each of these challenges has reflected the capacity and capability of each MNC and on how the external environment has been modified. Nevertheless, one of the paramount issues that today MNCs face has to do with power and politics and this can be associated to the process and need to manage diverse workforce that differs in many aspects (Drory and Vigoda-Gadot, 2010). Experience and the interplay of power and politics in the larger MNC are contributed by many factors that largely involve and characterize the workforce in the organization. Therefore, it can be postulated that power and politics in MNCs are ever-present, and in one way or the other, they influence the design, formulation, and implementation of human resource policy (Schermerhorn 2011). However, the extent and nature of this depends largely on the kind and type of relationships that exist within the MNC firms.
MacDonald’s Corporation has over time evolved into the largest world company specialized as the largest chain of hamburger fast food restaurants (MacDonald’s Corporation, N.d). At the same time, the company serves about 60 million customers daily across the world in about 119 countries. MacDonald’s Corporation operate in different countries based on what it terms as ‘regionalized version’ whereby, each subsidiary in the specific country specializes in regional and local menu (MacDonald’s Corporation n.d). As one of the biggest company’s in the world today, MacDonald’s manages large workforce drawn from across cultures, religion, gender, and ethnic groups. In fact, the company prides its achievement and success largely from having diverse workforce that has brought in diverse experience, expertise, skills, and knowledge (MacDonald’s Corporation n.d). Human resource management therefore is likely to be challenging in such a huge organization given the diversity and subsequent different subsidiaries, success in such an environment requires an act of balancing, remaining flexible, and appropriately approaching power and politics issues in the most effective and productive way.
Power and Politics at MacDonald’s
As a senior human resource manager at MacDonald Corporations, my roles and responsibilities include managing a diverse workforce that has different cultural background. Moreover, key responsibilities constitute developing appropriate human resource policies that address the needs of the workforce while at same time fulfill the goals and objectives of the company. On overall, this challenging opportunity requires enhanced skills, knowledge, and exposure without forgetting the need effective balancing.
Recently, as senior human resource manager for MacDonald was presented with opportunity to attend a symposium forum and the main aim of the symposium was to present and educate those in attendance the role of power and politics in managing people. The discussion was enriching in that key aspects of power and politics were highlighted and discussed with much practical examples on how these two powerful aspects affect modern human resource management practices. I was much interested to learn and acquire key important aspects concerning power and politics approach in managing the people especially with regard to MNCs scenarios. It is understood that, the interplay of power and politics in MNCs situation differs to some extent as compared to country organizations that have no international presence. Therefore, after the presentation and much of discussions, I was particularly interested and enthusiastic to gain knowledge with regard how power and politics approach to managing the people may influence or impact MacDonald’s Corporation’s employment policy. Therefore, what follows is discussion with regard to power and politics approach of managing people in MNCs context or perspective.
Politics in an organization is inevitable although many managers may not acknowledge it. Organizations are created to pursue ends and since they incorporate different stakeholders in their attempt at achieve these ends, the stakeholders come with different interests. At one point, there is likely to be collision and clash of stakeholders’ interests, which in turn are likely to set the motion for emergence of politics and power behavior (Drory and Vigoda-Gadot, 2010). The aim of politics and power in an organization can be seen to rest on the need by different stakeholders to control and direct decision-making process in the organization. As politics in the organization become evident and visible, stakeholders are likely to use both approved and disapproved strategies to control decision-making process (Ferris, Rosen and Barnum, 1995). Power and politics of an organization differs from the mainstream politics that depict politicians and parties. However, making comparison of the two types of power and politics, one is able to identify similarity especially with regard to goals. Power and politics is aimed at having control and having your way accepted by majority (Ferris, Rosen and Barnum, 1995). Given that an organization is an entity, power and politics are likely to dominate as everyone (stakeholders) strives to exert influence that has to be recognized and if possible embraced.
Managing people especially in an MNC it is possible that power and politics are likely to be present due to; the diverse workforce present, different orientation in management styles and existence of diverse goals is likely to act as the source for power and political contests (Erasmus, Swanepoel, Wyk, and Schenk, 2003; Guidroz, Kotrba, & Denilson, 2009). MNCs function based on contribution and input of multiple stakeholders such as; employees, shareholders and interested parties (Erasmus, Swanepoel, Wyk, and Schenk, 2003). Moreover, MNCs cannot perceived to be monolithic organizations like other found in the country, since MNCs are geographical, socially, culturally and institutionally diverse unit and these aspects become the major sources of power and politics. Characteristically, politics and power are natural aspects of MNC decision-making process, whereby they indirectly bring power and politics into the picture in a very limited but sound way.
Power and politics manifestation in an MNC like MacDonald’s is likely to occur at different levels of the organization (Fairholm, 2009). For instance, power and politics is likely to take place at; intra-personal level, inter-personal level, intra-group level, intra-organizational level, and inter-organizational level (Dorrenbacher and Geppert, 2011). At the intra-personal level, politics and power is likely to emanate from emerging conflict that may be inevitable as a result of intra-role conflict, adjusting to changes in various roles, and so on (Dorrenbacher and Geppert 2011). On the other hand, inter-personal conflict may be the source of power and politics especially with regard to relationships among different multicultural groups or teams. Intra-organization as source of power and politics may largely be informed by the relationship between the parent company and the subsidiary (Dorrenbacher and Geppert, 2011).
Performing my roles as senior human resource manager at MacDonald’s and after participating in the discussion that was highlighted earlier, I am convinced that source of politics and power in the organization is likely to occur from having diverse workforce and the subsequent application of management styles that may not resonate well with all stakeholders. For instance, it is evident that in presence of multicultural workforce, there are likely to be diverse goals hence different workforce strategies are likely to be preferred by the diverse workforce (Ferris, Rosen and Barnum, 1995). At MacDonald’s Corporations, multiple goals exist among diverse workers hence the inevitability of emergence of divergent preferences, interests and beliefs cannot be avoided. The approaches extended in dealing these issues is likely to be the catalyst for emergence of power and politics activities in the organization as every stakeholder strive to exert influence and control over the decision-making process. In most cases, resolutions to these multiple and divergent perspectives, beliefs, and interests depend on how power and politics are facilitated through the organization among the different stakeholders.
Just like in the case of other MNCs, at MacDonald’s Corporation, different stakeholders are likely to pursue their interests based on different aspects and motivation and in the end; power struggle and political organization are likely to heighten with each other trying to control the decision-making process of the activities. Moreover, the problem is likely to be complex if a particular management style was to be adopted and implemented in the organization. For example, MacDonald’s Corporation being an MNC will want to pursue goals and objectives that meet needs of its multiple stakeholders while at same time enabling the organization to remain sustainable and achieve continuity. Therefore, management style at the company is likely to adopt one, two, or even hybrid system of the MNCs management styles like: multi-domestic strategy; International strategy, global strategy; or even transnational strategy (Tempel, 2001). Adopting any of these management styles requires adequate understanding of the organization plans and objectives as well as the requirements and demands of external environment. Implementing one method is likely to results into conflict at MacDonald’s specifically due to diverse workforce that exhibit great differences in terms culture, education, experience, skills, and job orientation. Moreover, ignoring the conflict or dissatisfaction is likely to heighten stakeholders’ activities of politics with regard to influence decision as to how the workforce and entire organization should be managed.
Impact of power and politics on MNC human resource policy
Power and politics can be regarded to be intrinsic aspect to policy development and policy change, performance appraisal, conflict and grievance resolution, and intra-organizational coordination (Porter, Angle, and Allen, 2003). At MacDonald’s Corporations, human resource policy constitute an aspect where power and politics can be played and evidenced in large measure. This is so given that, the MNC has a diverse workforce and sometimes management styles at Headquarter and subsidiary level may not be compatible. The influence of political and power forces at MNC company can be fitted in the wider perspective of politics developed by Ferris and Judge in 1991 (Schuler and Jackson, 2007). According to the authors, the principle goal of any MNC revolves around adopting strategies that aim at maximizing both individual and organizational outcomes across boarders through the concept of ‘organizational fit’. Moreover, the authors express that, the political influence of MNC organization is always viewed as a value-neutral, specific form of influence that is achieved by the use of symbolic means (Schuler and Jackson 2007). Development of human resource policy at MacDonald’s can be perceived to invite political influence in the sense that, the organization operates as a co-ordinated global network. This situation is likely to results into rivalry especially among influential stakeholders at the headquarters and subsidiary, who bore competing interests.
Therefore, employment or to large extent human resource policy at MacDonald’s Corporation is likely to be developed within the influential forces of politics and power at the company. Key areas that are likely to invite political competition in the organization as far as human resource policy is involved include strategic management staffing, managerial career mobility and managerial compensation (Schuler and Jackson, 2007). Strategic management staffing at MacDonald Company is required if the company has to achieve its objectives. But it must be remembered that, at the headquarter different stakeholders are largely differentiated on the basis of functions, nationality and demographic, which constitute key aspects that are likely to compete especially with regard to rules and decision criteria used for global management staffing (Schuler and Jackson, 2007). When stakeholders at headquarter have reached agreement on how the process should be conducted, the next level of political influence is likely to come from subsidiary groups which need to be incorporated in designing effective HR management staffing system.
Another way politics is likely to influence human resource policy include the process of initiating performance evaluation systems especially in the subsidiary groups. Here, there are likely to be two groups of stakeholders, one based at headquarter while another at the subsidiary. The essence of political influence is largely with regard to this policy, is largely to direct and control how integration of headquarters needs and subsidiary needs and capabilities can be achieved. The power and politics manifested largely revolves around controlling the outcome, which in essence is to have performance evaluation systems that address the needs of headquarter, and does not discriminate against the subsidiary. Moreover, meaning attached to performance appraisal system constitutes the main issue why the power and politics are played since each stakeholder will want to influence the process.
Lastly, human policy development for MacDonald’s is likely to be influenced by politics and power games with regard to compensation systems, where the headquarter and subsidiary units may each strive to exert influence on how the schemer should be designed and implemented. In most cases, compensation systems are created within guidelines of limited budgets and scarce resources and given that two kinds of stakeholders are involved at headquarter and subsidiary, there is likelihood of competing interests being evident especially with regard to allocation decision criteria.
Dealing with these scenarios may be complex and challenging task especially given the fact that diverse workforce exist for the company. Therefore, as a human resource manager, it is critical to embrace broad-spectral consultation and involvement of key stakeholders in the process. The stakeholders should be given the chance to outline their position or view, and then from wide array of suggestions, the human resource manager can draw a clear plan on how to initiate and progress with the process of developing human resource policy. When the entire process commence, it is paramount that the human resource manager should establish and facilitate effective lines and channels of communication and feedback structures that will ensure the entire process is successful.
Power and politics in MNCs firms is inevitable, and this is an aspect that should not be ignored or underestimated. Source and subsequent avenue for organizational politics with regard to MNCs has to do with diverse workforce and management styles in diverse environments. More important, power and politics arise from the interplay and relationship between headquarter and subsidiary groups as different stakeholders of the company pursue different interests and goals. Moreover, in some cases, organizational politics can transform into organizational conflict thereby becoming the platform for expression and interplay of power and politics in the organization. Nevertheless, the way politics and power is played and progressed in the organization determines how change is able to take place in the organization, successful or unsuccessful. In summary, it must be understood that power and politics constitute key aspects that influence and impact MNCs, and it is from this particular aspect that human resource managers in MNC should understand and conceptualize the two aspects adequately.
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