the Caribbean) face peculiar challenges, which are by and large different from those
experienced by their colleagues elsewhere. For example, high inflation would usually
affect staff purchasing power and hence the need to continuously adjust salaries. Unreli-
able supply of electricity would usually cause frustrations not only in production but
also in ability to communicate or live in a comfortable home. Widespread poverty in the
community may lead to local staff spending a substantial part of their salaries and bene-
fits on supporting those in the neighbourhood and relatives thus reducing their con-
sumption basket. This may trigger undesirable consequences including theft, corruption,
and engagement in moonlighting activities at the expense of the organisation. There are
a myriad of cause and effect relationships between low level of economic development,
effectiveness in human resource functions and performance of MNCs.
Human capital
The quality of primary education, vocational training, university education, and profes-
sional training varies across countries. It is not possible for a poor country to afford the
luxury of quality education of an international standing for a sizeable proportion of the
workforce, let alone basic literacy. Difficulties in recruiting local staff with sufficient
competence in communication, numerical, and computer skills are some of the manifes-
tations of low quality of education in poor countries. There are also cases where poor
countries have excelled in some disciplines attracting recruitment from world class
MNCs. India is a case in point where it has some of the most renowned specialists in
medicine and computer science. Even where the country has strong human capital, lan-
guage barriers have a strong correlation with employees’ ability to display his/her levels
of competence. Differences in the quality and number of qualified local staff have un-
necessarily led to the employment of expensive expatriates, which also complicates
other human resource functions.
Culture
Beach & McKenna (2002) describe culture as constituting values, attitudes, beliefs, as-
sumptions, action, and procedures that people adopt in their life. Cultural orientation is a
result of historical development of society within a certain environment. Employees are
drawn from different cultural environments and therefore see the world in different
ways. Religion and social structures are major influences on cultural diversity across the
globe. Table 11.1 displays the main tenets of national culture.
Table 11.1 The nature of diversity in national culture
Communication Beliefs Social
Language Religious The power of kinship
Dialects Taboos Nationalism
Media Rituals Social classes
HolidaysBeliefs, communication and social structures are key areas that make up culture and
distinguish one society from another, as do employees’ attitudes and values from one
country to another. These major building blocks of national culture are well developed
by various researchers worldwide. The most outstanding work is that of Hofstede