An MNE is a system interacting internally in an organisational network among different business units i.e. headquarters and national subsidiaries though it is also concerned with the external factors influencing a MNEs success such as host governments, customers, suppliers and competitors. Managing foreign units effectively challenges MNEs, as Ghoshal and Bartlett 1990 have stated (Dowling et. al, 1999, p. 50).
With the aim of successfully overcoming these challenges a company faces when operating in foreign territories i.e. Asia, it should bear in mind the following issues: What must a multinational organisation consider to gain a competitive edge in the Asian region? What habits need to be reviewed and which ones should be developed or adapted? In general, Internationalisation is an imperative topic; in particular people management is a fundamental matter. Therefore, this essay will focus on some of the essential issues that a HR director of a Western MNE needs to understand before expanding into a foreign environment such as Asia.
Firstly different cultural characteristics are analysed; which is the most evident among this subject matter. Secondly the paper will draw comparisons of certain Asian work practices to Western firm strategies. Thirdly an investigation of employment legislation as an important role in the HRM arena is evaluated. This is followed by a succinct exploitation of Asian industrial relations system by which a comparison to Western patterns is established. Finally Training and Development importance in relation to key factors of success in an MNE expanding into the Asian marketplace will be discussed. A conclusion will summarize the most significant matters an HR director will need to consider before expanding into the Asian market.
A succinct definition of culture is G.H. Hofstede's (1991): "The collective programming of the mind which distinguishes the members of one human group from another." (Olie,