4)globalisation and workforce diversity hrm implications for multinational corporations in singapore

7/29/2019 4)Globalisation and Workforce Diversity HRM Implications for Multinational Corporations in Singapore

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Abstract

Globalisation and Workforce Diversity:

HRM Implications for MultinationalCorporations in Singapore

Dr William KW ChoyNanyang Technological University

1

This paper presents findings based on a study involving local and foreign

medium- to large-sized multinational corporations (MNCs) in Singapore. Thefindings highlight the connection between the stages of organisational de-

velopment, headquarters-subsidiary orientation, and increasing workforce

diversity in MNCs, as the Asia-Pacific Economic Cooperation (APEC) econo-

mies develop the regional human capacity as part of an economic and social

imperative in response to globalisation. This paper introduces a new concep-

tual frameworkconstruct domain of diversityto identify the nature of the

labour market, and discusses the need for firms to align company policies,

strategies, and organisational structures with the dynamic business environ-

ment. A significant implication is the impact on strategic international human

resources management for MNCs in the Asia Pacific region.

As multinational corporations (MNCs) operate across transnational bor-

ders, business managers have acknowledged that the increasing globalisation of

the world economy has allowed MNCs greater access to wider consumer mar-

kets and distribution networks, as well as coordinate production and business

transactions within economic clusters or networks involving cross border internal

and external relationships (Dunning, 1981). MNCs are in a better position to

capitalise on other new specialised resources such as capital, technological

competences, information and tacit knowledge, and production capabilities re-quired to enhance future product and services development (Hennart, 1982, 1991;

Chandler, 1986; Cantwell, 1991; Bartlett and Ghoshal, 2000; Hill, 2003). Fur-

thermore, Hamel and Prahalad (1985) have noted that these global businesses

are not just vying for dominance in world sales volume or market share, but also

for greater capital flow to support new product innovations, investment in core

technologies, and world-wide distribution channel. In due course, these factors

The author wishes to acknowledge the important insights and contributions of Associate Professor PremRamburuth, University of New South Wales, Australia.


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SINGAPORE MANAGEMENT REVIEW, VOLUME 29 NO 22

have transformed MNCs into multi-unit, multifunctional institutions, which allow

them greater managerial coordination, while intensifying global competition be-

tween rival corporations. Such structural changes would suggest there is greater

complexity in the international business environment. Not surprisingly, MNCs are

facing increasing managerial challenges associated with developing and imple-

menting business strategies, in order to compete in the across the global economy.

This paper presents findings based on a study involving local and foreign

medium to large-sized multinational corporations (MNCs) in Singapore. The find-

ings highlight the connection between the stages of organisational development,

headquarters-subsidiary orientation, and increasing workforce diversity in MNCs.

The following section discusses the political, economic and social imperatives in

the Asia-Pacific region as regional political and business leaders emphasise on

strengthening institutional capacities to develop and implement effective strategies

and practices that will provide a foundation for human resources development in

response to globalisation (Asia-Pacific Economic Cooperation, 1999, 2000a/b,

2001a/b). Subsequently, this will bring about significant organisational changes in

firm structures. This study examines the impact of globalisation in Singapore as a

result of such regional developments. The justification for the study in Singapore

stems from the fact that it is strategically positioned in this particular region, whereby

the nations leadership have placed much emphasis on strengthening institutional

capacities to develop and implement effective national policies and strategies that

will provide a foundation for continuous economic growth in the 21st century.

Political, Economic, and Social Developments inAsia Pacific and Southeast Asian Regions

Over the past decade, the Asia-Pacific Economic Cooperation (APEC) has

become the primary vehicle in the Asia-Pacific region in promoting open trade

and economic cooperation. In fact, the region is considered one of the most

dynamic and fastest growing economic sectors in the world, incorporating 42 per

cent of world trade (APEC, 2000a). The continuous growth in this region isattributed to the size of potential domestic markets, high standard of living and

consumer purchasing power, the availability of natural resources, increasing re-

gional trade relations, the existence of adequate infrastructure, and the quality of

the workforce. Global and regional macroeconomic conditions have prompted

the member economies to continue to reform and restructure so as to sustain

growth. Such economic and political commitments have boosted the confidence

for better prospects and economic outlook for the APEC region. Consequently,

the rapid growth of the regional economies has made the region attractive to

foreign investors, with promising economic and financial gains (UNCTC, 1992;


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3GLOBALISATION AND WORKFORCE DIVERSITY

Li, 1994; APEC, 2000a/b).

APEC leaders have realised that while the global economy has created un-

precedented opportunities, it also presented many new challenges to the govern-

ment institutions and business communities. In the advent of globalisation, the

leaders are convinced that the paradigm shifts towards global political, economic,

and social integration have significant implications to the developing member

economies (APEC, 2001b). During the APEC Economic Leaders Declaration

(APEC, 2000b), they have considered the challenges of the new millennium and

have reaffirmed the APEC vision of a community of open and economic interde-

pendency as the means to strengthen the members abilities to grow together in

the global market and deliver prosperity to their economies. The APEC leaders

are bound by a sense of mutual understanding regarding the challenges in each of

the member economies and have reiterated their determination to optimise the

benefits of globalisation through positive contribution in various cooperation

programmes (APEC, 2001b). One significant agenda and commitment is the re-

newed emphasis for human capacity building in the region.

Labour Market and Human ResourcesDevelopment in APEC

The APEC leaders have acknowledged that human resources development

is central to the economic development in Asia Pacific, especially in the advance-

ment of society and the sharing of prosperity with the people in the context of

globalisation (APEC, 2001a). The strong emphasis of human capacity building is

in recognition that the peoples of the region are APECs most valuable assets. As

a matter of fact, the leaders continue to believe that economic cooperation must

be a process which is open and transparent, so as to foster an environment that

assures the people will have greater access to employment opportunities (APEC,

2000b; 2001a). They have acknowledged that effective labour and employment

policies can enhance a skilled and adaptable labour force, and improve trade and

investment activities which will eventually benefit the workforce (APEC, 1999).Thus, the APEC leaders have agreed that human capacity building programmes

should continue to be placed high in the APEC agenda. In this regard, they have

encouraged their respective government institutions and business communities to

prepare human capacity building strategies that would define the objectives, pri-

orities, and principles for APEC (APEC, 2000a).

Some recommendations for policy reviews for the purpose of building a

strong foundation for human resources development, include 1) Increasing ac-

cess to quality education, relevant market-driven skills training, retraining and

lifelong learning; promoting efficient and equitable labour markets through poli-


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cies and services that facilitate peoples transition into jobs, effective and inclusive

labour market policies, employment-oriented social safety nets, mutual recogni-

tion of professional skills across the region; 2) Maximising the labour force po-

tential by tapping under-utilised pools of workers such as people with disabilities,

women, youth, older workers, under-employed workers, and indigenous people;

3) Increasing collaboration and information exchange with and among other re-

gional and international organisations and through enhanced cooperation among

government, business, labour, and civil society; 4) Building capacity to manage

the transformation and innovation of workplaces and organisational practices;

and 5) Addressing the needs of informal sector workers and facilitating their par-

ticipation in the mainstream economy (APEC, 1999; 2001a).

Regional Developments Affecting SingaporeConsequently, such agenda actions proposed by the leaders of APEC would

have significant implications for business development for countries in the South-

east Asian region. There have been several trends in the Association of Southeast

Asian Nations, ASEAN, member countries, which have significantly influenced

the growth of the region. Many of the factors contributing to the continued deve-

lopments include high quality human capital, extensive infrastructure improve-

ment, rising industrial and technological sophistication, increasing numbers of

state-owned enterprises, greater national commitment towards establishing a freetrade region, in and outflow of direct foreign investment, pragmatic business-

oriented government, rising private consumption, greater public and private in-

vestment, higher saving rates, increased economic organisational and deregula-

tion (Tan and Wee, 1995; Hew, 2005). Such dynamic development in this region

has brought about greater competition and closer interdependence among the

ASEAN countries. Gradually, Southeast Asia would emerge as an independent

contributor of growth in the global economy, as the region extends its economic

competition to other regions such as China, Japan, Europe and United States

(Tan and Wee, 1995; Turcq, 1995; Hew, 2005).It is not surprising that Singapore has benefited much from the above deve-

lopments, as it is strongly committed to maintaining business competitiveness in

the regions of Asia Pacific and Southeast Asia. For example, since the launch of

the Association of Southeast Asian Nations Free Trade Association (AFTA)

(ASEAN Secretariat, 2006), there has been closer intra-regional cooperation

among member countries, resulting in a regionalisation towards the growth tri-

angle of Singapore, Malaysia and Indonesia growth (Lasserre and Schutte, 1995;

Tan and Wee, 1995; Turcq, 1995; Menon, 1996; Rao, 1996; Tongzon, 1998;

Hew, 2005). Such strategic coalition has led to changes in human resources de-


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velopment strategies, in terms of the re-evaluation of the nature of jobs, skill

requirements, prospective labour demands and division of labour, and new forms

of employment. This has resulted in the enhancement of the quality of the labour

force, the increase in the utilisation of the skills and expertise of the scarce human

resources and a greater mobility of skilled professionals and semi-skilled work-

ers in the regional labour market (Lasserre and Schutte, 1995; Tongzon, 1998;

APEC, 2001a/b). In fact, the Singapore government has affirmed its support for

proactive and comprehensive labour market policies in response to the changing

demographic structures, developments in the nature of jobs, and complex work-

places in the country. And, the government has capitalised on its country-specific

capabilities and its strategic position by attracting the best and highly innovative

individuals, both locally and internationally, to work in the country. Moreover,

Singapores key economic focus on knowledge-intensity industries suggests there

would be greater job opportunities and attractiveness for professionals with the

relevant skills and knowledge of science and technology (Ministry of Trade

and Industry of Singapore, 2006; Singapore Economic Development Board,

2006).

Research in SingaporeGiven the political, economic, and social changes that have taken place in

the Asia Pacific and Southeast Asian regions, this has provided much opportunityfor in-depth study of the impact of globalisation on the organisational develop-

ment of firms, HQ-subsidiary orientation, and increasing workforce diversity in

MNCs in Singapore. Secondary data of a number of local and foreign medium-

to large-sized MNCs were reviewed between 20002002. The MNCs were in

the manufacturing services sector of Singapore. Drawing upon the information

gathered, general insights into the structural changes and HR strategies within the

MNCs could be deduced, which is consistent with previous studies of the transi-

tional developments of firms as they expand their business operations globally.

The next section describes the different stages of the firms general progress.

Evolutionary Changes inMultinational Corporation Structures

Bartlett and Ghoshal (1988, 1989, 2000) concluded that the extent of glo-

bal business competition has led many firms to experience mounting pressures to

restructure their organisations and systems as they strategically position them-

selves to capitalise on potential competitiveness within their specific industries,

both within their home countries and the foreign countries they are operating in.

Drawing from the underlying principles regarding MNCs motivation to expand


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operations internationally, Vernon (1966), Perlmutter (1969), and Adler and

Ghadar (1990a/b) have observed that corporations may transit four stages of

organisational development or evolution, namely the 1) Domestic stage;

2) Multidomestic stage; 3) Multinational stage; and 4) Global or transnational

stage.

In the initial phase, firms may operate within a domestic, ethnocentric pers-

pective. The marginal importance of international competition and the uniqueness

of product and services for an exclusive domestic market means that firms are

operating within a business scope where there is limited regard for national cul-

tural differences or sensitivity (Adler and Ghadar, 1990a/b). Ethnocentric

attitudes may prevail in which the firms business operations are towards a home-

country orientation (Perlmutter, 1969). Managerial processes are expressed in

the national identities of the firms by associating the companies with the specific

nationalities of the headquarters. The extent of authority and control is managed

at the headquarters-level. Furthermore, executives from the home nationality are

recruited and developed for key appointments in the foreign subsidiaries across

the world.

The next stage of development is the multi-domestic phase. In this stage,

firms acknowledge that cultural sensitivity is critical to implementing effective busi-

ness strategy (Adler and Ghadar, 1990a/b). As operations are shifting towards

an international market orientation, there is greater need to emphasise on the

different foreign domestic market separately, from a polycentric (Perlmutter, 1969)

or regiocentric perspective (Moran, Harris and Stripp, 1993). Unlike the previ-

ous initial stage where the firms may hold an ethnocentric one-best approach to

managing international business, the multi-domestic stage emphasises there are

other alternative approaches to manage the operations, depending on the respec-

tive host countries. Corporate management recognises that culturally appropriate

policies have to be designed to manage staff of the different foreign subsidiaries.

Local or host-country orientation may be higher in which the firms assume the

local nationals always know what is best for the business. Hence more localnationals may be assigned to key position within the subsidiaries.

The third stage of the development is the multinational phase. The firms

maintain a global price-sensitive and cost-sensitive perspective, in which the main

focus of business operations is on complete standardisation of product and ser-

vices, and not the creation of culture awareness of the different foreign market

segmentation. As such, the intense price competition has significantly reduced the

impact of cultural differences and negated the importance of cultural sensitivity as

firms seek out the one least-cost way to manage the international business in-

stead (Adler and Ghadar, 1990a/b).


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The final stage is the global or transnational phase. This stage entails a geo-

centric perspective in business operation in which firms are engaging in an in-

creasingly complex and interdependent operation across the border (Perlmutter,

1969). The extent of the firms competitive strategies is to capture significant

market share by emphasising on product and service customisation, efficient pro-

duction capabilities, extensive research and development, and strategic global

alliances with other local or foreign firms (Adler and Ghadar, 1990a/b). As firms

compete globally where there is greater transnational interaction between the

organisations, the key factor in organisational success involves greater collabora-

tions between the headquarters and subsidiaries to establish universal standards

while identifying with possible local variations or national interests (Perlmutter,

1969). With this regard, there is recognition that a more effective managerial

practice is to develop the best staff in the firms to participate in strategic opera-

tions across the world. As such, there is greater need for management to realign

current organisational development towards a more culturally responsive orienta-

tion to enhance effective international human resource management as more staff

from different nationalities and cultures is engaged to meet local and worldwide

organisational objectives.

Evidently, as MNCs strategically adopt a more transnational perspective,

senior management has recognised that the traditional strategic mindset that fo-

cused solely on domestic levels of business operations without considerations for

global consequences would not produce sustainable competitive advantages for

the corporations. The transition from the multinational to the global or transnational

corporation marks yet another fundamental development in organisational pers-

pective. Corporations may no longer be multi-domestic in nature, but global in

their structures, strategies, markets and resource bases (Adler, Doktor and

Redding, 1986). Table 1 presents an overview of the HQ orientation toward

subsidiaries in an international enterprise according to the stages of organisational

development.

Workforce Diversity in Singaporean-based MNCsApparently, the abovementioned structural transitions would have serious

implications for MNCs based in Singapore. With the expanding complexity of the

organisational design, there would be an emergence of workforce diversity in the

workplace, which would bring about changes in the administration of strategic

human resource management (Tung, 1984; Adler and Ghadar, 1990b; Milliman,

von Glinow and Nathan, 1991; Kobrin, 1994; Schuler, Dowling and De Cieri,

1994; Taylor, Beechler and Napier, 1996). The significance of multiculturalism

and diversity in the workplace is evident in the recruitment of local and foreignstaff as part of organisational initiatives, when MNCs organise their strategic


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Table 1: HQ Orientation toward Subsidiaries in an International Enterprise

Organisation Design Ethnocentric Polycentric Geocentric

Complexity of Complex in home Varied & Increasingly

organisation country, simple in independent complex &

subsidiaries interdependent

Authority; decision-making High in headquarters Relatively low Aim for a colla-

in headquarters boratively ap-

proach between

headquarters andsubsidiaries

Evaluation & control Home standard Determined Find standards

applied for persons locally which are uni-

& performance versal & local

Rewards & punishments; High in headquarters, Wide variation; International &

incentives low in subsidiaries can be high or local executives

low rewards for rewarded for

subsidiary per- reaching local

formance worldwide objec-tives

Communication; High volume to Little to and from Both ways &

information flow subsidiaries (orders, headquarters; between subsi-

commands, advice) diaries part of

Little between management

subsidiaries team

Identification Nationality of owner Nationality of host Truly international

country company but

identifying with

national interests

Perpetuation Recruit & develop Develop people Develop best

(recruitment, staffing, people of home of local nationality people everywhere

development) country for key for key positions in the world for key

positions everywhere in their own positions every-

in the world country where in the world

Source: Adapted from Chandler, Alfred D Jr (1986). Evolution of modern global competition. In ME Porter (ed)

(1986). Global industries. Boston, Mass: Harvard Business School Press, pp 405449


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global operations at both the headquarters and foreign subsidiaries (Chandler,

1986; Adler and Ghadar, 1990a/b; Kobrin, 1994). The demographic profile of

the workforce in the organisations would no longer be characterised by homoge-

neity or mono-culturalism. It is evolving into a composite of multifarious people

from different socio-cultural backgrounds, in which workforce diversity could

mean the representation of people from different group affiliations within

organisations (Cox, 1991, 1993; Cox and Blake, 1991; Jackson and Alvarez,

1992; Jackson and Ruderman, 1995). Figure 1 illustrates the increasing workforce

diversity as corporations experience evolutionary developments in their business

operations.

Snapshot of Workplace DiversityTable 2 presents a representation of the diverse workforce in the MNCs,

characterised by their national-ethnic backgrounds. The Singaporean employeesconstituted the largest labour group (n= 314), in which they made up 63.3 per

cent of the sample population. Within the Singaporean group, there were 270

Singaporean-Chinese, 18 Singaporean-Malay, 18 Singaporean-Indian and eight

Singaporean-Eurasian. The second largest group was the Malaysians (n= 68), in

which there were 60 Malaysian-Chinese, four Malaysian-Indian, and a similar

number of Malaysian-Singhalese and Eurasian (n= 2). The ethnic Indians from

India (n= 46) was the next largest group, followed by the Chinese from China (n

= 30) and Indonesia-Chinese (n= 22). Last, there were 16 Filipino employees

amongst the sample population.

Extent of

diversity

in the

workplace

Increasin

gdiversit

yinthew

orkplace

Domestic

firm

Multi-domestic

firm

Multinational

firm

Global or

transnational

firm

Figure 1: Evolutionary Developments of Firms and Increasing Workforce Diversity

Nature of the firms


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Though the study has highlighted some features of the sample workforce,

one must acknowledge that diversity is not only limited to identifying employee

differences based on nationality and ethnicity. We need to consider other aspects

of diversity as well, so as to understand and appreciate the complexity of the

human capital composition. With the distinctive changes in the human resource

factor in MNCs, this would lead to the following questions: How is diversity

defined? What implications do diversity have for organisations? In order to ad-dress these questions, an understanding of the concept of diversity is essential.

Table 2: Nationality and Ethnicity of Sample Labour Force in the Singapore-based MNC

Ethnicity

Nationality Chinese Malay Indian Eurasian Singhalese Filipino Total

Singaporean 270 18 18 8 314

(54.4%) (3.6%) (3.6%) (1.6%) (63.3%)

Malaysian 60 4 2 2 68

(12.1%) (0.8%) (0.4%) (0.4%) (13.7%)

Indian 46 46

(9.3%) (9.3%)

Chinese 30 30

(6.0%) (6.0%)

Indonesian 22 22

(4.4%) (4.4%)

Filipino 4 10 2 16

(0.8%) (2.0%) (0.4%) (3.2%)

Total 386 28 68 10 2 2 496

(77.8%) (5.6%) (13.7%) (2.0%) (0.4%) (0.4%) (100%)


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Construct Domain of DiversityGenerally, diversity may be defined as the presence of differences among

members of a social group or unit (Jackson, May and Whitney, 1995). In another

perspective, Cox (1993) defines diversity as . . . the representation, in one social

system, of people with distinctly different group affiliations of cultural significance

Deresky (1994) highlighted that the differences between the group members may

be illustrated in terms of the dimensions such as national origin, language, religious

belief, culture, age, physical ability, socio-economic status, marital status, sexual

orientation, race, family situation, and gender. Ferdman (1995) emphasised the

fact that membership in social groups distinguish one person from another not

only in name but also in their viewpoints of the world, in their construction of

meanings, and in their behavioural and attitudinal preferences, and other patterns

of values, beliefs, norms. Harris and Moran (1999) further expounded on the

dimensions of diversity and included other characteristics not identified by Deresky

(1994). The factors include physical appearance, cultural heritage, personal back-

ground, functional experience, mental and physical challenges, family responsi-

bilities, military experience, educational background, style preferences, thinking

patterns, political backgrounds, city, state or region of residence, IQ level, smok-

ing preference, weight, height, non-traditional jobs, and white and blue collar.

Although researchers and institutions in the fields of international business,

applied sociology, and anthropology have investigated the subject of diversityand have proposed some common denotations of diversity, they have not organised

the identifiable characteristics or variables of diversity into a systematic, universal

structure, which can be used for empirical analysis and contextual comparisons

across and within societies. In other words, cataloguing the details of diversity is

not enough, since each complex society is more than just consisting of presum-

ably unrelated societal features. This paper introduces a construct domain of

diversity, which classifies employee differences in terms of three distinctive cat-

egories. The categories include demographic diversity, organisational diversity,

and socio-cognitive diversity.The first category is demographic diversity such as age, gender, ethnicity,

and nationality (Cox, 1991; Cox and Blake, 1991; Jackson and Ruderman, 1995)

whereby Jackson et al (1995) have commented that these are considered readily

detectable attributes that can be easily characterised in particular individuals. The

second category is organisational diversity. It is important to note that workforce

diversity is not limited to the physical or social attributes of the organisational

members. It also involves the organisational context that adds to the diverse pers-

pective of the group dynamism. Organisational diversity may include the

1) occupation, functional or job portfolios of the employees such as marketing,


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finance, accountancy, manufacturing, production, etc; 2) staff job tenure or se-

niority in the firm; 3) hierarchical ranking within the organisation (for example,

senior management, middle management, and lower management); and 4) work

or professional experience (Jackson and Ruderman, 1995). The last category is

socio-cognitive diversity, which includes cultural and religious values, beliefs,

knowledge level, and personality characteristics (Jackson and Ruderman, 1995).

It constitutes the underlying attributes of personal characteristics that are not so

easily identifiable (Jackson et al, 1995).

By establishing and organising the staff according to their unique attributes, it

will enable business managers to have a more objective understanding and ap-

preciation of their diverse staffs behaviours, attitudes and values, given the impli-

cations for interpersonal and organisational processes and outcomes when staff

members work together. Essentially, as peoples values and beliefs vary distinc-

tively as a consequence of their different socio-cultural predispositions, this will

affect organisational processes and configurations, for example, supervisor-sub-

ordinate relationships, leadership and decision-making styles, cross-cultural com-

munication, international team management, staff motivation, staff recruitment,

selection and development, staff expatriation and repatriation, and other manage-

rial functions. Figure 2 presents an illustration of the construct domain of diversity.

Workforce Diversity and Strategic International HumanResource Management

Undoubtedly, MNCs would benefit from the wealth of available business

knowledge, differing experiences, and global perspectives that staff from diverse

backgrounds can contribute. Porter (1990) contended that differences in charac-

ter and culture may prove to be integral to global success, as diversity is consid-

ered important towards enhancing innovation and competition in an environment

of multiculturalism in organisations. Thus, this signals a need for greater cultural

sensitivity and empathetic orientations in the workplace, whereby there ought to

be an emphasis on cultural acceptance rather than cultural tolerance. Policies andpractices in diversity management should ensure that there is continuous learning

and adaptation in organisations. As such, strategic international human resource

management (SIHRM) and the related issues in workforce diversity in MNCs

would become challenging areas of research and managerial practices for aca-

demics, management consultants and business managers, respectively. The ability

to effectively manage diverse workforces in organisations is crucial in the wake of

the increasing proliferation of transnational strategic alliances, international joint

ventures and HQ-subsidiaries establishments.

Given that SIHRM knowledge and competencies are essential to maximising


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Figure 2: Construct Domain of Diversity

Organisational diversity

Constructdomain of

diversity

Socio

-cog

nitiv

edive

rsity

Demographicdiversity

Religious beliefs

Tradition

Sexual orientation

Intelligence level; mental

challenges

Language Beliefs

Thinking patterns

Knowledge level;

education

Personality characteristics

Political beliefs

Age

Gender

City/state/region of residence

Ethnicity

Nationality

Marital status; family responsibilities

Cultural heritage

Socio-economic status

Physical appearance

Physical ability

Occupation, functional or

job portfolios

Job status (blue or white

collar)

Job tenure or seniority

Hierarchical ranking

Work experience

Functional experience


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and capitalising on the synergistic capabilities of diverse workforce activities (Cox,

1991, 1993; Cox and Blake, 1991; Cox, Lobel and McLeod, 1991; Jackson

and Alvarez, 1992; Jackson and Ruderman, 1995; Adler, 2002), both the re-

gional political and business leaders have placed considerable emphasis on

strengthening institutional capacities to develop and implement effective strategies

and practices that will provide the necessary foundation for human resources

development required to address the challenges of the dynamic labour market in

this era of globalisation (APEC, 1999, 2000b, 2001a).

From an economic regional viewpoint, APEC officials have acknowledged

that human capacity building should be given high priority on the APEC agenda.

They recognised the opportunities for result-oriented tripartite partnership among

government, business, and education and training institutions, and have emphasised

greater cooperative actions so as to give greater impetus to the human capacity

building programs within APEC. For example, by increasing collaboration and

information exchange with and among other regional and international organisations,

the leaders hope to further develop the quality of the labour market; enhance

general skills training appropriate to the needs of the regional market, with spe-

cific attention to the needs of SMEs; expand executive, professional and techni-

cal personnel development; engage all stakeholders to implement programmes to

address the needs of vulnerable populations, in particular, women, youth, migrant

workers, older workers, disabled and indigenous populations (APEC, 1999,2000b, 2001a).

From the perspectives of the business organisations, Adler (1980) strongly

emphasised the fact that cultural synergy, as an approach in managing workplace

diversity, involves a process where managers establish organisational policies,

strategies, structures and practices according to the unique characteristics of staff

members and clients. This approach recognises the similarities and differences

among the staff, and seeks to capitalise on diversity as a resource in designing and

developing effective organisational systems and learning. To ensure organisational

staff are able to cope effectively, at the macro-level of the organisational system,management need to develop organisational policies and formal education

programmes that: 1) create awareness and increase social consciousness; 2)

emphasise the importance of organisational culture, management responsibility

and accountability, and program content in diversity education in the workplace;

3) reduce the sense of alienation experienced by minority group employees within

the company; 4) actively ensure the incorporation of diversity management as an

integral part of overall organisational development and change process; 5) em-

power of management and employees so that they are more involved in the pro-

cess of institutionalising diversity in the workplace; 6) create stronger vision and


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commitment amongst management and staff; 7) review corporate infrastructure,

systems and policies that promote diversity; and 8) create internal support sys-

tems that encourage diversity of thought and actions of staff from different socio-

cultural backgrounds.

At the micro-level of the organisation, management need to integrate and

build upon the values and beliefs of the various members of the work team, and

develop group strategies that produce better results and solutions, which are more

innovative than the single contributions of individual member (Adler, 1980;

Maznevski, 1994, 1995). In other words, diversity would lead to synergistic

performance when team members are able to understand and appreciate each

other, and capitalise on one anothers experiences, knowledge and perspectives.

Through effective communication, members would be able to evaluate problems

and situations from various viewpoints, determine underlying cultural assumptions

and create a common social reality, ascertain and explain culturally synergistic

alternative solutions appropriately, and establish agreed-upon norms for interac-

tion (Adler, 1980; Maznevski, 1995).

Conclusion

As the world economy becomes progressively more global in nature, busi-

ness corporations are engaging in increasingly complex and interdependent op-

erations across national borders. A key factor in organisational success involvescloser collaboration between the headquarters and subsidiaries to establish uni-

versal standards, while maintaining business operations that identify with possible

local interests. In this regard, there is greater need for management to align

organisational development with a more culturally responsive orientation, to en-

hance effective international human resource management. This is essential as

more staff from different nationalities is engaged to meet organisational objec-

tives. The increasing interaction of staff from diverse sociocultural backgrounds in

organisations has serious implications for management in terms of international

human resource development. Academics, researchers, business leaders andmanagers have stressed the fact that there are dynamic changes in the composi-

tion of employees in organisations, from a traditionally homogenous nature to a

more heterogeneous characteristic. Business managers and leaders must fully

understand and appreciate the extent of the complexities that workforce diversity

would create for their organisations, as more MNCs become increasingly multi-

national and multicultural in nature.

Erez and Early (1993), Early and Singh (1995), and Early and Mosakowski

(2000) have stressed that diversity could bring potential organisational benefits,

such as greater creativity and innovation in human resource management and


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development. A major consideration for managers is the wide scope of behaviours,

attitudes, and values of the diverse staff across socio-cultural and national bound-

aries, which are bound to affect organisational processes. Thus, it is crucial for

managers to distinguish how staff of different socio-cultural backgrounds could

be interacting within the organisation, and identify how perceptual effects may be

manifested in the multinational-multicultural group relationships (Cox, 1991, 1993;

Cox and Blake, 1991; Cox et al, 1991; Adler, 2002). Consequently, the extent

of diversity in the workplaces also has serious implications for the regional labour

market in the Asia Pacific. APEC member countries, including Singapore, have

recognised the opportunities for human capacity building in the region. Not sur-

prisingly, the APEC members have endorsed the Human Capacity Building Initia-

tive, aimed at developing concrete, responsive and well-prioritised strategies in

promoting collaboration, including the sharing of experiences and best practices

in human resources development and labour-management policy formulation.

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