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... the Irish economy. One may look at this number from an executive MNC perspective and say that there is not a very large pool of perspective employee candidates for an emerging MNC. A statistic that combats this concern is that 47 % of the population in Ireland is between the ages of 15 and 44. An overlapping figure, also, is that Ireland has the youngest population in Europe, with over 40 % under the age of 25 years. There should not be much of a big worry as far as the future exchange rate of the Irish Punt.
In general it should stay relatively stable with some slight everyday volatility overall. One thing someone may be cautious of is in the near future with regards to the exchange rate. The economic boom is huge in Ireland and with inflation rising, there is a probable chance of nominal rate rising, and consequently, a short-term depreciation of the Irish Punt. Currently, the Irish government offers concessions to multinational companies who expand operations into Ireland. This has led to expansion within the country and contributed to the impressive economic performance of Ireland. The most effective means of attracting international expansion has been the tax advantages offered to multinationals.
Depending on how it is categorized, multinationals are exempt from filing income taxes for the first three to five years of operations. Considering the average marginal tax bracket of large firms is upwards of 40 % in the U. S. and nearly 55 % in Ireland, a company stands to benefit financially from operations in Ireland. Considering international expansion into Ireland requires the allocation of resources and capital while providing many benefits to the local economy, certain concessions must be required on behalf of the Irish government. It would be requested that the profits derived from international operations be exchanged at a previously established rate.
It would be arranged that such a rate would be the spot rate at the time of conversion less a discount. This floating rate will protect the firm if rates either rise or fall while not locking in a rate that could become unfavorable if rates drop substantially in the future. It would further be required that the upper management and other key personnel be imported from abroad to provide consistent managerial techniques within the companys corporate structure. However, entry and low level employees may be hired from the surrounding communities.
This will serve the interests of both the company as well as the local community and economy. Despite the favorable political and economical factors in Ireland, certain aspects of the Irish culture must be considered when managing the workforce. Certain attitudes and cultural differences exist that may render the traditional American management style relatively ineffective. Irelands beliefs and values that Americans would consider old-fashioned. Until recently Ireland has had a history of economic and political despair.
As the effect of properly functioning capitalism has not been fully experienced, Irish citizens regard as priorities: religion, family and humor, rather than the American ideals of prosperity, success and the notion of more. However, they are not a people adverse to hard work. Rather, the Irish demand a certain level of recreation particularly that found in the local pubs. In other words, managers can expect Irish employees to work diligently and effectively during the required times of operations. However, managers should realize that Irish workers generally will not work late hours striving for success, but instead will utilize this time spending it with family or socializing in the pubs. Considering this, management must understand the work ethic of the traditional Irish workforce, and integrate this factor into their managing techniques in order to more effectively utilize their employees.
In terms of religion, the Irish culture is quite homogenous. Over 90 percent of the population is Roman Catholic. As a result, the Vatican has particularly strong level of influence within Ireland. Managers will find it difficult to deal with employees if they are expected to participate in genetic research, developing biotechnology, or anything pertaining to abortion.
As the Irish tend to be stubborn, managerial tactics may prove to be ineffective when managing under these types of conditions. Considering this, companies that participate in any ethically or morally questionable operations specifically those opposed by the Vatican and the Pope, should be carefully considered and not haphazardly ventured into. In order to produce a more cohesive workforce, mangers must understand the philosophy of pub-life in Ireland, which is inherent to the culture. In America, people frequent bars with the intent to drink alcohol. Pubs in Ireland, however, are the focal point for social interaction. It is not uncommon for priests, nuns, grandparents and families with young children to be found at a pub in Ireland.
By understanding its function, managers can improve the group-dynamic by promoting social interaction and thus improving a workforces effectiveness through the philosophy of synergy. The success of the company pivots on the performance of the management selected to undertake the venture. Considering a managers performance is directly correlated with his or her enthusiasm and eagerness towards the endeavor at hand, it is important to select appropriate individuals that will exert these characteristics in a foreign country. Normally, the selection process is an evaluation of the individuals abilities to perform in a business setting. In this case, it must be determined if the individual can, not only survive, but also thrive in the foreign culture. Therefore, a certain level of convincing must be done to persuade the candidate to move to a foreign country.
The simplest and most obvious solution would be to offer additional compensation such as a substantial salary increase or a relocation bonus. However, this is merely a temporary solution for a permanent situation. Other factors should be evaluated and considered before offering an individual the position. Several traits and competencies should be considered when selecting expatriate managers for international assignments. In a recent study of expatriate managers, the most successful individuals had similar personality structures. These included people skills, adaptability and flexibility, tolerance, emotional maturity, self-confidence and industry experience. (Shay, 33) Human resources should search for individuals who fulfill this profile.
Further considerations should include an individual with little or no domestic attachments. A manager would be more likely to relocate if s / he has to sacrifice less in order to do so. Younger people tend to it this description as well as being more open to new experiences and possessing the ability to learn quickly. Recently, the performance of female expatriate managers has received a growing level of attention. Apparently, they are able to do their jobs well and able to perform in the most difficult situations. Numerous studies indicate that women would make excellent expatriates and their openness, strength in relationships, and flexibility could be decided advantages on an international assignment. (Dollins, 1) Some individuals are apprehensive towards the idea of working for prolonged periods of time overseas because they feel as if they will become trapped and be denied the opportunity to return home because they were one of the few to accept the position.
In response, the idea must be reinforced that this is not a permanent transition. By creating an accelerated promotion program, the idea that international assignments are only temporary, can be fostered. Through this tangible program, the individual will come to understand that the position is a necessary stepping stone for future advancement. It is a means, not an end, and therefore not a final destination. Hopefully, this will encourage managers to become involved in overseas ventures as well as gaining experience in a different aspect of the companys operations. After the manger is selected, proper cross-culture training is necessary.
Focused efforts must be made to develop a program that prepares expatriate managers and their families for the challenges they and their families will face abroad. Obvious topics should include currency, government system, architecture, language, etc. It should emphasize the objective aspects of culture help managers understand what to expect in their daily routine and the social dynamics they will encounter. It is not enough, however, for expatriates to learn about the objective characteristics that distinguish the host culture from that of their home country. They must also understand the more subjective characteristics, such as customs, values, beliefs and norms. Cross-cultural training programs that incorporate subjective cultural characteristics help develop a better understanding of the values and beliefs that influence behavior in the foreign country.
Respondents to a survey reported that such training can improve job satisfaction and performance and provides a competitive advantage over other global players. Thus training has the potential of making a significant impact on international ventures. (Shay, 35) With a previous understanding of the country and the culture, the expatriate manager will feel more comfortable in the new environment and, therefore, improve their performance. The expansion of our IT operations into Ireland will prove to be beneficial for the company as well as to its shareholders. In addition to the increased revenues, this project offers the advantages of diversification.
Ireland will provide the company with an existing technically literate population, which requires minimal training. Little resources are needed to be imported into the island country for the purposes of software manufacturing. In terms of exporting, the software can be delivered over the Internet thus reducing transportation costs. While foreign expansion is cost intensive and requires additional coordination and management, the current tax laws of Ireland temporarily suspends income tax obligations of multinational companies for a minimum of the first 3 years of operations. Overall, the benefits of expanding into this market offset the potential risks of the expansion. Bibliography: Works Cited Dollins, Ilene. 1998 Global Relocation Survey.
Employment Relations. Winter 1999: 25 i 4 p 1. Jordan, Joe. Selecting Expatriate Managers: Key Traits and Competencies. Leadership Organization Development Journal, March-April 1998 v 19 n 2 - 3 p 89. Shay, Jeffrey.
Expatriate Managers. Cornell Hotel & Restaurant Administration Quarterly. Feb 1997, v 38 n 1, p 30. Irish Unions Warn Govt Wage Pact Threatened By Inflation Dow Jones Newswires April 26, 2000.
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Research essay sample on Multinational Companies Social Interaction
