How Important Is Effective Management of the Culturally Diverse Social Capital in a Multinational Company

Introduction

It is very important to have an effective management of social capital in MNC's for achieving strategic objectives. It is important that HRM hires and retains the best talent that is out there and to provide employees with (Mead, R. & Andrews, T., 2009, pp.324) evaluations, incentives, policies and procedures.

In the international field, HRM is an necessity for a company to be successful in the global marketplace. (Taylor, S., 2007, pp. 336) In order for a company to implement IHRM system creating social capital is a must. Having the experience of people in an international company not only creates diversity but it allows for individuals to share and create knowledge in order for a company to be competitive within the international market.

Social capital

(Taylor, S., 2007, pp.338-339) There are three types of social capital that can be effective in the success of MNC's. They are Structural, Relational and Cognitive.

Structural- ( Taylor, S., 2007, pp. 338) Deals with the an individual's network base and where he/she can gather information to help with certain projects or ideas. It also depends on how the relationship is between the individuals. We have all used this type of social networking before. When I worked for Enterprise Rent A Car, I made connections with individuals at the auction houses that my dealers bought from. They would send me a list of cars that some of my dealers bought at the auction and what they were looking for if the auction house didn't have them. Not only did that give me a idea of what I could sell my dealers but I knew if I had the types of cars they were looking at I could easily sell over 100,000 dollars worth of cars a day.

Relational- (Taylor, S., 2007, pp. 338) Similar to Structural social capital, just the difference is how personal the relationship between individuals based on their history. The same example from above would still apply to this one. When I was a Remarketer, I was constantly meeting with people from auction houses and dealerships. There were some relationships that became more than business and developed into friendships. Not only did that make the dealer or individual from the auction house trust me, they would tell me inside information on what is selling and what is not. I also developed relationships with other remarketers within our company to see what was selling out in the West and East coast. I know on one occasion, my team worked out a deal with our people out in Arizona to take our 2WD trucks because in the Midwest there is only need for 4WD. We ended up taking their 4WD trucks and sold each of them within a week.

Cognitive- (Taylor, S., 2007, pp. 339) Refers to the share goals and visions of individuals within a company. How things are done and what the norms are within the company. I know our goal within Enterprise was to sell as many cars as we could each day. Our goals were all the same, each person had to sell up to 10 cars a day. Me and my team would sit down each morning and would discuss where we were going for