The paper “ Function and Major Human Resource Implications of International Mergers” is a persuasive example of an essay on human resources. In cross border mergers, companies from different countries merge to form a new corporate entity. Cross border mergers entail greater complexity, in comparison to domestic mergers. Some of the reasons for this are the foreign language and culture involved in cross border mergers, which result in communication problems and cultural differences. This constitutes a cultural conflict, which could be due to national and cultural differences. (Piekkari, Vaara, Tienari, & Sdntti 2005: 332).
It is natural for people to feel apprehensive when required to interact with and adopt some other culture. The acquiring company, in general, implements a different management strategy in the newly formed entity. Moreover, it is common practice for newly formed corporations to adopt rationalization programs, such as abolishing duplicate operations and enhancing expectations from employees, to improve productivity. However, cross border mergers have to deal with previous employment practices (Edwards, Coller, Ortiz, Rees, & Wortmann 2006: 70). The effect of national limitations is generally perceived to be at their greatest level, during and after the process of cross border mergers and acquisitions.
This is due to the fact that the guidelines pertaining to mergers and acquisitions increase the influence of industrial relations institutions; which in turn, reduces the freedom available to the management (Edwards, Coller, Ortiz, Rees, & Wortmann 2006: 72). Language is an essential component of the employee-employer relationship. Consequently, if a foreign language is employed in employee communication, then substantial insecurity and suspicion are generated, in respect of mergers. In the initial stages, the corporate language selected during the merger process will serve to convey the situation regarding the eh division of power between the parties to the merger (Piekkari, Vaara, Tienari, & Sdntti 2005: 331). Moreover, during the implementation stage, the language chosen could exacerbate the difficulties associated with transition and integration.
Furthermore, the language chosen could also introduce human resource management challenges (Piekkari, Vaara, Tienari, & Sdntti 2005: 331). Multinational Companies are uniquely situated, with regard to cross border activities; and they generate different options, in respect of functioning in the international arena. Selecting an appropriate internationalization strategy constitutes the first strategic decision.
There are different strategies; and under the ethnocentric global strategy, control is centralized and the subsidiary companies resemble the parent company (Farndale & Paauwe 2007: 356). Moreover, in the polycentric or multi-domestic strategy, control is distributed and the subsidiaries follow their local practices. On the other hand, the geocentric strategy or transnational strategy requires the subsidiaries and the headquarters to adhere to the same standards. These standards can be either that of a particular region or global(Farndale & Paauwe 2007: 356). Thus, corporate strategies vary, in accordance with the extent to which a corporation is compelled or desires to change its procedures to suit local conditions. In addition, MNCs have the choice to adopt strategies that assure them higher returns and productivity, irrespective of the location of their subsidiaries.
Thus, the Human Resource practices of a company, have universal application at the global level, and this facilitates cross – border equity and comparability. Such universality brings about the global configuration of systems, so as to assist an internal labor market (Farndale & Paauwe 2007: 356).