Discuss about the Procurement of Labour By International Companies.
The report takes an in-depth look into the working of Construction companies working abroad. At this moment different aspect of recruitment from various nations is looked into whereby the legal, social, economic factors too would get an insight. The ways to manage the cultural and social issues to maintain a working relationship between the workforces is discussed. Further, the effects that may put a barrier would be critically analyzed with preventive measures that may be followed in such case. Various industrial examples from Construction Company sourcing manpower from other nations would be highlighted discussed and seen to find pros and cons of sourcing from different cultures and social background. The benefits as well and the difficulties are being studied here for the overview of the manpower sourcing from abroad (El-Higzi, 2002).
The international business of construction has seen a boom post reforms in the World Trade Organization with Its General Agreement on Tariffs and Trade (GATT) treaty. Several other continental treaties have then taken place. However, not all construction companies wish to venture abroad as it includes a great amount of risk. Not understanding the Political, social, economic, cultural aspects may make the business show its failure in the Domestic market as well. Nevertheless, great deals of nations have come to the free trade agreements and have engaged in trans-border construction business along with other businesses. The communication and transport business technology and business developments have made it more probable to happen. Hence, transnational investments in infrastructure are very much in the broad picture (Gunhan and Arditi, 2005).
The globalization has brought in the needed competition in the business where the consumers have the power of bargaining. Thus the services and innovations in this field are happening fast. Risk diversification may bring in risk in other forms like manpower problems which are not unusual in the industry. The people in search of work are venturing into foreign markets to fulfill the needed manpower gaps (Shen et al., 2001). For example, the Saudi Arabia or UAE in the Middle Eastern nations, have people coming from various nations to work on the projects taken up by various European and US based construction companies. The International projects for the business of US or Europe become tough due to the complex situation of manpower coming in. The state may have its policy while the company its own. There the differences are usually settled at the basic stages. The South East Asian nations which have an inferior economy are the largest source of labor in the industry in this region. The worth of this market is USD 3 trillion while the developing nation's market share is USD 750 Billion. This segment is the largest regarding active international players (McCaffree, 2008).
The business success is dependent on how the business manages this complex network of Client, people in the business along with profitability from the projects. The basic motive of construction business like any other is profits, market diversification ensuring domestic market fluctuations being well handled and keep up the margins for the shareholders during the time of stress. The diversification comes at a risk where the network of manpower resources, the major tangible resource comes in (Yates, 1994). The development of a global strategy based on few basic nations, understanding and performing well their guarantees the confidence to diversify. The knowledge gained in the process of foreign ventures helps to sustain and drive the global business development ideas forward. The construction markets are largely based out of the developing nations in Asia, Africa, and Latin America and those in Central and Eastern Europe. Hence, the businesses which have developed their competence in the local market in a specific field look for the entry in the other market with the previous credentials (Hancock et al., 1996). However, there are strategies that which gives the business a guideline is as follows:
- Market selection with characteristic, component and strategic advantage study,
- Managing the Marketing Mix where product pricing and policy mix is well suited for the business,
- The knowledge of international transactions and billing process and guarantee market studies,
- Organizational Structure that suits the particular market and choice of management strategies that needs to be adopted,
- Policies of participation like agreements and such deal documentations (Kaming et al., 1998).
These give the business the go-ahead for the venturing in the foreign markets. Managing the staff therein for immigrated or local staffs is the question this strategic for the business deploys. The studies show that the best of Global infrastructure consultants comes from America, Japan and European firms. Hence, the strategies they adopt are acquisition of the local counterparts, joint venture with a local construction company and of course Global revenue from various sources to go global (Yates, 1995). The exporting of the construction is the way to go global needs a proper understanding of the market and its culture therein for a foreign investor. Thus the domestic market risks are reduced with foreign ventures. The level of demands, trade regulations, political climate and manpower skills available to have the job done are few aspects these companies looks into. Thus it helps the firm to determine the standardized or adaptive code of business market they are in. The marketing strategies and expenditure or returns from those projects, form a huge role in making the investment decisions for an infrastructure company (Sayem, 2012).
Manpower of the Industry
The construction industry is a very manpower oriented industry which needs such manpower and outsources it from the lesser economies so that the most profitable ventures can be accommodated. The lesser economies provides the venture with needed source of manpower who wish to raise their standard of living by working in these upmarket economy projects that earns well for the brand and thus people working therein (Thomas, 2002). However, each business has its own kind of need like foreign market regulations to get the manpower needed for such projects. The business has to be clear about the laws of the land and strategise its manpower needs likewise. These tributes to nationality requirements, facilitation of entry and stay till the services are done, accelerating the licensing of foreign professional for best of outputs, an outlet in the nation of business that may conduct the processes and possibility of considering the qualifications acquired by the foreign professionals (Jaselskis and Talukhaba, 1998).
However, the developed and developing nations have their own nature of development programs. Hence, planning, resource allocation, cost efficiency, supervision are few aspects those becomes primary in a foreign construction project. The government regulations are very fragmented in across these industries depending on the land and place the project is happening. The wages forms a major part where the education and manpower skills make the barrier to introduce local faces in the workforce. Further, to become a global economy the professional and infrastructural needs may not be present where the firm may fall into a space where the trading space, technology available, skills availability, physical equipment and finance may cause problems. The developing economies often shows a lack of investment and infrastructure development capability to its developed counterparts as the resource like finance and budgets often gets a change with change in political or social changes in the nation (Jindas Gade, 2016).
Productivity of a personnel is dependent upon the technology and instruments used for the projects makes the Source of labour, Skill levels and proportion of labour as well as mechanization makes a lot of difference in the productive outputs of a certain economy. The extent of mechanization would lead to labour choice and skill needed for the sector. In developing economies a larger plant with skilled labour is more effective than smaller plant with more labour intensive production. Further, the skill of the labour gang too determines the kind of supervision needed to maintain such a gang of labours. Nevertheless, the cultural and political implication of labour resources being brought into a nation may also affect the choice of labour. Again, local political ethnic representation in the work or labour supply is another issue which needs to be dealt with and acted as per the situation. Nevertheless, on the job training is at times taken up by the host government to supply quality labour to attract multinational companies to work in those economies (Kapila and Hendrickson, 2001).
Safety and Security at the Job
The issues of social and economic development play an important role in the host nation where the construction company is supposed to work. The role of the legislations to protect people from lack of statutory regulations, labour intensity and inadequate infrastructure are few among many which also determine the role of labour in the nation. The construction accidents are common and the source of de-motivation among the labour force. Hence the way the safety and security of the job is dealt with is important for the company to continue working on a site and thus keep expanding as per their objectives. The workers in some case do not want improvements in site safety and security of life as they find it natural in the business to see tragedy of such nature. Working standards and statutory regulations along with their implementation are very much a deed of the day as they are habituated to apathy of the construction companies at home (Vu and Carmichael, 2009).
Nevertheless, the construction companies are seeing improvements in the shared responsibility of developed and developing nations in this sector. The use of safety gears and proper standard safety education are coming in fast to fill the space which was vacant for some time (Zhi, 1995). However, the people associated with the business have to be competent in the cause where they wish to see the change and find security of job after pointing out the gaps in safety measures. The studies have shows that the sector of construction has people who get motivation from the scale of pay, good relationship with the employer and workmates and a good overtime payments for the extra hours put in. Such aspects are the issues which at times are missed in developing economies due to pressure of employment in developing economies. The job is more important than the safety and security issues which vary from one culture to another depending upon where the construction is ongoing (Loosemore and Muslmani, 1999).
Technology of plants and equipment vary in many different economies due to difference in the Research and development initiatives in those nations. This creates the difference in the technical outcome of the process if they are not addressed with much deeper thoughts and actions. The climatic extremes, innovations, inappropriate material of work, skill of the people working, geo-ethnical problems and inadequate maintenance or inadequate design for such conditions makes the most of the problems related to job safety and security of the people involved (Mohamed, 2004).
National and Cultural Differences in Manpower sourcing
The understanding of cross-cultural differences is important for the industry which the globalization has brought in. Most of the Latin American Jobs are designed by the Canadian and US infrastructure enterprises and executed by German or English Companies with materials coming from China and Australia. One aspect of design and its significance in geopolitical scene is the design of roofs and basement strengths of the buildings. The difference is valuable for both the designers and end users as each part of the globe has its own geological aspect that would make the engineering practices and approaches different in various terms (Williams and Lilley, 1993). Further the parties involved in international business are dependent on the parties those affects the working of the firm outside its territory in terms of those stakeholders organizational cultures and practices. The culture here is significantly divided into national and organizational culture for this sector. The national culture signifies the shared values and typifies the society which lies beneath it. The dressing styles, food habits, mannerism, code of conduct are few to mane in the case of cultural differences. Thus one has to know what they may expect when travelling from one economy to other (Greer and Ford, 2009).
The organizational culture symbolize the single specific trait of a culture where the code of business is directed for all irrespective of culture or geopolitical location to give a unity of behaviour at work. This indicates the organizational value chain and infrastructure with management control over people in the organization. The ethnic culture may make one think or behave in manner which may not befit the culture of others thus the organizational culture gives the direction needed to build the controls clear and have fairness in its dealings. The cultural dimensions which give the people of a culture aspects which may be absent in others (Thieblot, 2002)
- Uncertainty avoidance: Some cultures do not want to take risk in terms of uncertainty and some are willing to take more risk.
- Individualism vs. Collectivism: Individualism is linked with one-upmanship whereas collectivism is where all takes a collected decision and work towards it. The western cultures which gives more stress on individual success and leadership while the Eastern cultures like Japan and Korean depend on collective work where individual interest is not as much as the group decision is concerned (Raftery et al., 1998).
- Power Distance: In some culture the boss and subordinate relationship sees a huge gap as the eastern civilizations shows here the boss directs and the workers follows it with utmost obedience. The west however gives the chance to shorten the gap between the people and the boss. Here all have a say and have opinion which are taken into consideration. Thus, the power gap suggests the opinion of the people and their importance in decision making.
- Masculinity vs. Femininity: The masculinity suggests the ambition and male power dominance in the culture while feminism is associated with humanitarian values and personal relationships, sympathy and interdependence (Ofori, 2003).
These are few aspects that cross-cultural communication present a challenge for the people in an organization which has a diversified group of people in the folds of the workmen.
The Pros and Cons of International Labour procurement
The people when procured for the construction jobs from various cultures make the stage complex which has both its positives and negatives. The positives are that the gang of people for the construction job of the needed nature of skills and technology knowledge available with them. The one with little or no cross-cultural competence makes the business operations complex for the people working on a project for the management to control or get the best out of them. Further, the dispute between people of various cultures makes the working situations complex in a culture gap where miscommunication is the main trait of such gap. The miscommunication along with social and ethnic discrimination is an issue that one may feel in a different nation (Pheng and Leong, 2000).
The pros are like that the construction company in a region may get the needed labor force from a different economy with the needed skills at various levels where the economic difference between two nations makes it an attractive prospect. The cross-cultural issues may arise at various levels of the business which needs an instant solution to keep the operations running without any loss of precious time. Gestures, words, and behavior may be the cause of grievance for one set of people due to the ethnic ways of various cultures. These are the cons which may be settled with interactive sessions and a well documented and applied an organizational policy which makes the work regulated and gets a free flow (Dillon et al., 2013).
The managers have to be well aware of the people they are working with and the kind of supervision that would suit the job the best along with team formation with best of skills for a particular job. Cross-cultural issues at an organizational level are best settled with the directive of policies and well adherence to it in times of crisis. The economic benefits for the company into construction in a different land are the beneficiary in case of transcultural migration for jobs in search of a better life back home. However, the level of satisfaction in a job makes it important for the construction company to carry on with their agenda (Ramcharran, 1998).
The Ways to Avoid Cultural Pitfalls
The cross-cultural pitfalls are well attended with best of cross-cultural issue understanding and actions to revisit them on time. The clarity of the ideas associated with the job has to be clear to all and to get more understanding of the people's knowledge of what is being propagated can be measured with a small question answer session. The people have to be made free in such a condition where they may ask questions for more clarity and get the answer. The details of the stages of construction and each of the people associated and their involvement makes a huge difference. A summary of the decisions made has to be communicated to all, and their suggestions and questions need to be answered to get the needed and intended clarity in the job role. This simplifies the man to man communication and makes the people understand what is expected out of them along with their rights and responsibilities (Volpp, 2011).
The different cultural aspect of the economies is discussed along with the web of the operational network that the construction business has generated post-globalization. The pros and cons of having an immigrating labor force in the construction business are common due to skill gaps or necessary manpower required to do business in a certain state. The management approach, as well as policy framing and making it known to all, is a way to solve the problem. The ways to avoid the cultural pitfalls in manpower procurement in the construction business at different levels and the ways to address the grievances remains the cornerstone of such policy.
Dillon, H., Adair, L., Wang, Z. and Johnson, Z. (2013). Slow and steady wins the race: Life history, mate value, and mate settling. Personality and Individual Differences, 55(5), pp.612-618.
El-Higzi, F. A. (2002) ‘Examining international trade flow for Australian construction companies’, International Journal of Social Economics, 29(6), 491-507.
Greer, B. and Ford, M. (2009). MANAGING CHANGE IN SUPPLY CHAINS: A PROCESS COMPARISON. Journal of Business Logistics, 30(2), pp.47-63.
Gunhan, S. and Arditi, D., (2005) Factors affecting international construction. Journal of Construction Engineering and Management-ASCE, Vol. 131, 273-282.
Hancock M., Ghai V. and Root, D. (1996)."Selection and Training of Expatriate Managers in Multi-National Construction Firms", Internal unpublished paper, University of Bath, UK.
Jaselskis, E. and Talukhaba, A. (1998) ‘Bidding considerations in developing countries’. Journal of Construction Engineering and Management, ASCE, 124(3), 185-192.
Jindas Gade, R. (2016). A Proposed Solution to the Problem of Construction Industry Overruns: Lean Construction Techniques and Linear Programming. Indian Journal of Science and Technology, 9(25).
Kaming, P.F., Holt, G.D., Kometa, S.T. and Olomolaiye, P.O. (1998). ‘Severity diagnosis of productivity problems – a reliability analysis’. International Journal of Project Management, 16(2), 107-113.
Kapila, P. and Hendrickson, C. (2001) ‘Exchange rate risk management in international construction ventures’, Journal of Management in Engineering, ASCE, 17(4), 186-191.
Loosemore, M. and Muslmani, H.S. (1999) ‘Construction project management in the Persian Gulf: inter-cultural communication’, International Journal of Project Management, 17(2), 95-100.
McCaffree, K. (2008). Regional Labor Agreements in the Construction Industry. Industrial and Labor Relations Review, 9(4), p.595.
Mohamed, S. (2004) “Performance in international construction joint ventures: modelling perspective.” J. Construction Engineering and Management, ASCE, 129(6), 619-626.
Ofori, G. (2003) “Preparing Singapore’s construction industry for the knowledge-based economy: practices, procedures and performance.” Construction Management and Economics, 21(2), 113-125.
Pheng, L.S. and Leong, C.H.Y. (2000) ‘Cross-cultural project management for international construction in China’, International Journal of Project Management, 18(5), 307-316.
Raftery, J., Pasadilla, B., Chiang, Y.H., Hui, E.C. and Tang, B.S. (1998). ‘Globalization and construction industry development: Implications of recent developments in the construction sector in Asia’, Construction Management and Economics, 16(6), 729-737.
Ramcharran, H. (1998), “Obstacles and opportunities in international engineering services”, Journal of Management in Engineering, ASCE, 14(5), 38-46.
Sayem, M. (2012). Values Orientation in Business Through Service Innovation: A Conceptual Framework. International Journal of Managing Value and Supply Chains, 3(4), pp.1-12.
Shen, L. Y., Wu, G. W. C. and Ng, C .S. K. (2001) “Risk assessment for construction joint ventures in China.” J. Construction Engineering and Management, ASCE, 127(1), 76-81.
Thieblot, A. (2002). Technology and labor relations in the construction industry. Journal of Labor Research, 23(4), pp.559-573.
Thomas, H.R. (2002) Construction practices in developing countries’ Journal of Construction Engineering and Management, ASCE, 128(1), 1-7.
Volpp, L. (2011). Framing Cultural Difference: Immigrant Women and Discourses of Tradition.differences, 22(1), pp.90-110.
Vu, A. and Carmichael, D. (2009). Cultural Difference and Conflict Management - A Vietnamese-Australian and Construction Industry Case Study. International Journal of Construction Management, 9(2), pp.1-19.
Williams, R. G. and Lilley, M. M. (1993) “Partner selection for joint venture agreement.” International Journal of Project Management, 11(4), 223-237.
Yates, J.K. (1994). ‘Forces driving competition in the E&C Industry in the 1980s and competitive transitions in the 1990s.’ Engineering Management Journal, 6(4), 13-16.
Yates, J.K. (1995) ‘Competition beyond the Year 2000 in the E&C Industry,’ Engineering Management Journal, 7(1), 33-37.
Zhi, H. (1995) “Risk management for overseas construction projects.” International Journal of Project Management, 13(4), 231-237.