1 Why is it important for multinational firms to understand

1.) Why is it important for multinational firms to understand the compensation and benefits practices of other countries?

2.) Describe key differences between an individualist and a collectivist culture, and describe some ways in which compensation approaches might be affected by these differences.

3.)Describe some of the factors that should be considered when balancing the need for global uniformity against the need to accommodate local differences, with respect to compensation and benefits issues.

Solution

1) Multi national companies may be operated in more countries having single parent company, More countries means company have to face different type of people and culture and community, all diversity, but the company have to make unity. So company have priority to understand the compensation and benefits practices of other countries. MNC have to pay operating countries compensation only, they could n\'t pay parent company compensation.

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2) Tax deduction: Individualist country means tax deduction will be same :

for collectivist culture it could be varied from country to country

Normal pay : individualist means they could be pay according to their parent company rates, if the inflation rises, company should hike the pay until it is normal

a collectivist culture : MNC should give additional income for low paying countries such as bonus, incentives to motivate the workers by financial support.

They have to maintenance all countries workers as one country workers.

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3) Trade union may play huge role for compensation and benefits in the regards of global uniformity.   Currency Value of other country is also main factor.

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