University of PhoenixsIntroductionRiordan Manufacturing is a Fortune 1000 company with projected yearly earnings of $46 million. Headquartered in San Jose, the company produces custom plastic parts in Pontiac, plastic beverage containers in Albany, and plastic fan parts in its plants located in Hang Zhou China, Georgia, and Michigan. With revenues in excess of $1 billion, and 550 employees, Riordan is an industry leader in using polymer materials to provide the best possible solutions to its customers (Riordan Manufacturing, 2009).
With a possible expansion into Japan on the horizon, there are numerous legal and regulatory requirements that must be taken into consideration, as well as differences in culture amongst employees, unions and customers alike. Some of the questions that must be asked include: What role does the social contract play on compensation systems in Japan? Would the compensation of an expatriate be equitable to that of a National within the same country? What effect will trade unions and employee involvement in compensation have on a cross border organization? In order to be successful in cross-border operations companies must have a thorough understanding of employment and taxation laws, customs, the environment and employment practices of the country in which they are conducting business.
Human Resource professionals must be ready to act immediately to avoid potential problems and provide cost-effective advice that will help guide their organizations through the many challenges of managing employees dispersed throughout the world.
Role of the Social Contract on Compensation Systems InternationallyAccording to Milkovich and Newman, the social contract goes beyond the employee-employer interchange. It includes the state, all the owners of the other companies, and all the employees. Companies can act as individuals or through business associates, and employees can act either as individuals or through union representatives (Gomez-Mejia & Werner, 2008, pg. 5). "The Japanese social...