Question

INTERNATIONAL Human Resource Management:

List and explain five categories of external risk assessment which need to be addressed by a multinational enterprise?

Answer 1

There are several external risks that needs to be assessed by a multinational enterprise. They are as follows:

1)MNCs operating in different countries need to assess the law and order situation and advise or provide support to their expatriates or third countries employees.

MNCs has to operate under the jurisdictions of the country and also focus on developing long term relationship with its third country employees so that productivity can be improved.

2)HR department may also need to have emergency evacuation program for their employees working in highly risk areas

for example: when an aid worker is working in country such as Syria, any threat to the aid worker can take a political angle and thus can unprecedented consequences.

3)Poor selection decision may result into huge loss as in case of expatriate may not perform well and recalled

An organisation oozes out a lot of resources in terms of money and time in training and employee if the employee fails to perform then it can cause devastating losses to the organisation itself. The organisation will have to hire another employee, train him, will have to shed various resources to become resourceful and vital for the organisation

4)If MNC’s policies and practices are hostile to unions, political party or in violation of host country regulations, company can be asked to win up operations or government may seize physical and financial assets

5)MNCs operating in host country face more external influence as opposed to local companyFederal and local government, political figures, political and social groups exert great pressure on foreign company

6)Subsidiary manager need to know local way of doing business, dealing with different ministries, political parties, and labour unions

organisation must also focus on understanding the sentiments and cultural differences persistent in the host country to optimize the performance of the organisation.