Cross-cultural Enterprise Management Personnel Compensation Management - For Example, In The Multinational Corporations

The internationalization of business and employment is reaching dramatic proportions as we enter the 21st century. And an ever-increasing wave of international mergers, acquisitions, and cross-national strategic alliances is creating a world of "stateless corporations" staffed by a cadre of managers, professional and workers of very diverse culture backgrounds. A crucial question that arises an a result of this global trend is the degree to which reward systems must be customized to cope with diverse culture contingencies, or the extent to which the effectiveness of particular compensation strategies varies from one country to another. The emerging challenge from a compensation perspective for multinational corporations (MNCs) is not to take advantage of low-wage opportunities, but to design compensation strategies that are most appropriate for specific cultural conditions. The central thesis of this paper is that MNCs that are able to use national culture to their advantages when designing compensation strategies will achieve greater success in managing diverse work forces around the world.In the article, we illustrate how the cultural dimensions developed by Hofstede (power distance, individualism, uncertainty avoidance, and masculinity/femininity) can play a role in developing pay systems and discuss those compensation strategies that should be most prorate given a nation's standing on each cultural dimension. And Japan and the U.S. and China will be discussed in some detail to illustrate the effect of cultural elements on compensation strategies.As everyone known, development of a comprehensive global compensation system for parent country nationals (PCNs), home country nationals (HCNs) and third country nationals (TCNs) is one of the most important issues facing international human resource management. The author thought compensation decisions concerning direct wages, benefits and financial incentives are different among PCNs, HCNs and TCNs, and the article examines the necessary components of compensation and problems that recur.Otherwise we particularly discussed how MNCs in the China pay for nationals in the end of the article, and suggest that MNCs should take Chinese culture into account when designing compensation system.After analysis, this paper suggests that an international corporation must consider which social norms are being emphasized when devising its compensation philosophy. And because of its social as well as economic significance, compensation also exemplifies and reinforces social norms. We should make good use of this relation in order to reduce the efficiency loss.