Training and Development (T&D) in Multinational Enterprises (MNEs)

 


Introduction

Multinational Enterprise (MNE) can be defined as an enterprise that has facilities and assets in at least one country other than its home/parent county. MNE has a global presence and generally has offices or factories in different countries and a centralized head office which helps to coordinate global management (Chen, 2022).

According to Indeed (2021), there are four major types of MNEs.

  • Decentralized corporation – Do not have centralized headquarters and each country operate according to its own management structure.
  •  Global centralized corporation – have a head office in the home country and the same management team handles domestic and global operations.
  •   International division – Operations may be segregated into domestic and international operations and an international division is responsible for overseeing the foreign operation.
  •  Transnational enterprise – Parent and subsidiary relationships exist among the parent and other countries

There are more than 80,000 companies that handle this century’s economy in a global context (The Borgen Project, 2020). Some MNEs’ annual budgets exceed the Gross Domestic Production (GDP) of small developing countries like Sri Lanka.

Importance of Training and Development in MNEs

The global environment is becoming more complex and in continuous change, for this reason, it requires flexibility. Because of that, organizations, especially MNEs have to develop strategic responses with the help of suitably trained and internationally oriented employees. Many MNEs are transferring their employees and sending them overseas assignments which are often more complex than local assignments because they are going to another country and working in a different culture. This is where training and development are helping to guarantee the success of such assignments.

Training develops expatriates’ learning orientation and helps them to understand the culture of overseas countries. At present, a successful expatriate or international manager has to have a set of specific skills with regard to their assignment such as managing responsibility, adapting to the culture, improve subordinates’ skills. These skills can be considered preliminary international skills or abilities which can be generated and improved through effective international training and development programs.

International Training and Development Programs

There are three broad types of international training in MNEs (Shen, 2005)

  •        Pre-departure training – once the person has been selected for an international assignment, pre-departure training is normally provided for ensuring that the candidate can work efficiently in the new job and check whether the person’s knowledge and skills are sufficient or not in advance.
  •        Post arrival training – After the expatriate has gone to assignment, on-the-job training will be provided to give a better understanding of the process and procedures of the local working environment.
  •        Training for Host country National (HCN) and Third Country National (TCN) – Training will be provided to HCN and TCN to understand the corporate strategies, culture, and other important aspects of the corporate.

Challenges and emerging trends

Key challenges faced when introducing international training can be discussed as follows;

  •        Understanding cultural differences
  •        Keeping some sort of consistency within the cultural barriers
  •        Managing different time zones
  •        Language barriers 
  •     Emerging trends of expatriate training and development are mentioned below;
  •       Over-Reliance on Pre-departure Training
  •       Tailored Expatriate Training
  •        Use of Short-Term Overseas Assignments
  •        Real-time Training
  •        Assessment and Development Centres
  •        Self-training using Electronic Media
  •        International job rotation

 Conclusion

The most important resource in Multinational Enterprises is also their human capital. Because of the rapid change in the business environment, high competition, language barriers, and cultural differences, international training and development play a significant role to match their employees with the required knowledge and skills. Finally, it will help to MNEs to full fill their ultimate objectives of high profitability and market growth.

References

Chen, J. (2022) Multinational Corporation (MNC). Available at: https://www.investopedia.com/terms/m/multinationalcorporation.asp (accessed: 02 May 2022)

Indeed, (2021) What Is a Multinational Corporation? (Definition and Types). Available at: https://www.indeed.com/career-advice/career-development/what-is-multinational-corporation (accessed: 02 May 2022)

Shen, J. (2005) International training and management development: theory and reality. Journal of Management Development. Available at: https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.476.3631&rep=rep1&type=pdf (accessed: 03 May 2022)

The Borgen Project (2020). Available at: https://borgenproject.org/multinational-corporations-in-developing-countries/#:~:text=Multinational%20corporations%20(MNCs)%20have%20a,over%20900%20bottling%20facilities%20worldwide (accessed: 02 May 2022)

Comments

  1. maduwanthisilva.blogspot.com4 May 2022 at 10:19

    As you clearly described training programmes for MNCs are essential. Investing in n development of the employees means investing in organisational own growth and success. With the rapid growth in global markets, talented employees become crucial resource because employee's skills, knowledge and experiences are invaluable. These human resources should have updated competencies. Training can brush up their values. specially when going for a foreign assignments in MNCs, if they want to be success in a foreign country training is a compulsory component through out the process.

    ReplyDelete
  2. P.Janaka Chaminda Perera4 May 2022 at 11:11

    As expounded by (McDonnell, 2010) even today, MNEs have played a crucial role in Ireland's recent economic prosperity. The global financial crisis has severely reduced the country's economic vitality. Level Ireland exists as a foreign direct investment (FDI) relative to the size of the economy the highest in the world

    Reference
    McDonnell, A., Lamare, R., Gunnigle, P. and Lavelle, J., 2010. Developing tomorrow's leaders—Evidence of global talent management in multinational enterprises. Journal of world business, 45(2), pp.150-160.

    ReplyDelete
  3. Ayesha Udani Sudusinghe6 May 2022 at 23:30

    Costenaro et.al, 2019 in their research for "International human resource management for expatriation in early and late mover multinationals" concludes that there are no repatriation programs focused on career development, and specific process to assess the expatriates' performance in both early and late mover multinationals. This implies that training and development has been least prioritized by the companies.

    ReplyDelete
  4. sampathJ7 May 2022 at 04:24

    Nowadays Multinational corporations are more and more widespread, but a problem that they still don’t have accomplished is how to have successful employees, and most importantly how to train their employees in order to make them a useful and successful resources of their enterprises. The increase of multinational corporations has led to employees sent in a foreign country to undertake international assignment more than ever before, with estimation that the use of expatriate will continue to increase in the future. One of the most significant topic of International Human Resource Management (IHRM) is International training and development and its benefits are well recognized in the literature. Training has the scope to enhance work behavior and skills, and development has the scope to gain better abilities for future work. Nowadays, a successful international manager has to detain a set of specific abilities in regards to the context he or she is going to undertake the assignment, such as managing responsibility skills, cultural adaptability, generate subordinates skills , ability to explain and exhibit. These skills are regarded as fundamental international ability and characteristics which can be generated with an effective international training and development program.

    ReplyDelete

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