Proctor & Gamble

Introduction

In today's global business environment, managing diversity in human resources has become a very important and crucial issue. Human resources management has a lot to deal with managing workers/employees from different countries and nationalities. Managing multinational human resources becomes an issue not only in the multinational corporations, having their offices or plants in different countries, but also in the domestic companies, with domestic workforce becoming more and more diverse each day. Creating an HR that has the ability to recruit and select the right people and the ability to effectively socialize and train employees will allow multinational companies to excel in all business aspects.

In this paper we have chosen to explore Procter and Gamble (P&G), a multinational corporation which has lead the way in creating one of the best human resource management systems to date. By using P&G, we are seeking to provide an example of how current multinational companies make decisions to manage their human resources (HR) activities, in search of effective management of their HR costs and in search of professional HR management.

First, the concept of multinational HR management will be outlined, followed by the discussion of the P&G case.

Human Resource Management Concept

Human resource management (HRM) encompasses the activities of acquiring, maintaining, and developing the organization's employees (human resources). "The traditional view of these activities focuses on planning for staffing needs, recruiting and selecting of employees, orienting and training staff, appraising their performance, providing compensations and benefits, and making their career movement and development." HRM involves two aspects: the activities of the human resources department and the day-to-day duties of every manager, in the process of direct or indirect communications with employees. A company's strategy must view people not as expenses but as assets that maximize the company's value, and consequently the HRM officers are responsible to support and implement the strategy.

While the HR department does a lot of work in terms of planning actions and strategy, such as hiring and firing employees, developing training programs and such, managers often are the ones who eventually work with the selected people; employ certain new practices or newly developed methods in evaluating employees. Certainly it depends on the organization of the company and sometimes, as well, on the corporate culture of the company, how much responsibility the HR department bears and what its workload is, and how much HR management activities are imposed on the individual manager versus his subordinates. As it will be outlined in the following discussion of P&G, outsourcing might be one of the options available to tackle the complex issue of managing HR in the global village. Some of the tasks still fall on the shoulders of middle managers.

According to the Hitt, Black and Porter in the Management , in order to manage HR effectively, managers must: know how to select and recruit the right people; be able to effectively socialize and train people; know how to effectively evaluate the performance of subordinates; determine the reward system that would motivate highest performance possible; be able to determine what training might be useful or necessary for further development of employees.

As businesses continually expand in the global market and with the Internet as a way to recruit skilled workers, the diversity of workers within a company can be viewed as a strength or weakness of a multinational company. Managing multinational HR involves additional dimension of the necessary awareness of differences in national backgrounds, differences of cultural features of employees in the countries, where plants or offices are located (for MNC). Thus, in addition to basic HR activities and approaches, it is of the most importance to understand the cultural implications of different nationalities, when managing multinational HR.

The following discussion on P&G is one of the examples how managing HR in different countries might be accomplished.

P&G: Successful Management Planning & Implementation

One of the many secrets of P&G's phenomenal success over the last century is the successful planning and implementation of those plans. Without proper planning, a company is just like a ship without a captain - aimless. One of the key tools of successful planning for a company like P&G, which truly is multinational, is diversity. Since the company's core competency is in the diverse products that it produces and markets all around the world, it is of utmost importance that management takes into account the diversity at the work place and in the corresponding community to effectively manage operations. This is exactly what P&G has done in the past and is continuing to do. At P&G, diversity is seen with a positive attitude and is highly desirable in the workforce, as is evident from the exhibit 1. A multinational company will not be multinational, if its workforce is not diverse enough to reflect the rich mix of various cultures, it operates in. Diversity is so important for successful planning that without which, P&G cannot gain the competitive advantage that it enjoys right now. For example, if P&G plans to expand its operations in a specific country, it needs the local talent and expertise to do so effectively and efficiently. For this, P&G encourages diversity in t workplace and believes in giving equal access to all, so that employees develop a high esteem, which in turn would increase their productivity. One of the company's main area of focus is on diversity and not surprisingly, has been voted among "the best places to work" for many years.

As a multinational company that operates in 80 countries, P&G takes work ethic as a main consideration in its HRM strategy formulation and implementation in order to successfully compete in the global business environment. Work ethic is much more subjective than social infrastructure. It can be defined as "a cultural norm that advocates being personally accountable and responsible for the work that one does and is based on a belief that work has intrinsic value" . For example, P&G would choose Belgium over other European countries as its base not only because of its geographical location but also the quality of workforce with high educational level to be successful in Belgian or European operation. From a financial standpoint, to maximize profit, P&G can reduce cost of housing and employing