Profiling Multinational Companies And Features Of Labour Relations

Published Date: 02 Nov 2017

The country of origin of a Multinational Company has huge impact on the way the labour force will be managed in its foreign subsidiary. The MNC’s parent country establishes the contextual form of the majority HRM policies used in its foreign subsidiaries. The significant growth of the number of MNCs’ subsidiaries in the Republic of Moldova has great importance for National economy, because they attract huge inflows of FDI in the country. Influence of FDI on our economy is twofold. On the one side, it helps to complement national financial resources for implementing the program of macroeconomic stabilization, but on the other side foreign capital plays a fundamental role in the restructuring and modernization of the national economy.

Table 3.1

Representative officeThe Scheme of Moldavian Companies with foreign capital operating in Moldova

Affiliate branch

Foreign Legal entity

(parent company)

(Pa

Limited Liability Company

Separate legal entity

Joint stock company

A Representative office represents and protects interests of a foreign company at the territory of Moldova..

An Affiliated branch is concerned with performing a part or all functions implemented by the parent company, as well as commercial functions that as usually are performed by Representative offices. Affiliate branch carries full responsibility over obtained results, having all rights to perform business activity in the Moldavian area.

Comparing Representative and Affiliate branches, there shall be underlined that last one has full right to carry commercial operations and run production activity in the region, what is deprived for Representative branch.

A Separate legal entity with foreign capital is founded and developed by foreign investors coming to Moldova, it is a commercial organization regulated by Moldavian legislation, that is at the same time applicable to the local Moldavian companies.

The Chamber of Commerce and Industry of the Republic of Moldova is concerned with authorization of opening representative branches and subsidiaries of foreign companies at the territory of the Republic of Moldova.

A Limited Liability company is opened by one or more persons, it will be registered and authorized to perform its activity only when it total employee number will not overcome 50 persons .

A Joint Stock company is a legal entity, which issues shares in order to raise the capital. Like in a limited liability company, the number of participants in a close joint-stock company must not exceed 50 persons.

Companies with foreign capital are larger than the local ones and promote a more active investment policy in comparison to companies with domestic capital. Large scale production, better economic performances and bigger access to external financial sources has made possible for companies with foreign capital to register essentially bigger inflows of tangible and intangible assets during last years. At the same time, the fact was demonstrated, with some exceptions, that companies oriented to the satisfaction of the internal demand promote a more active investment policy compared with the ones oriented mainly to exports.

Speaking about the impact of Multinational corporations on the economic development of the Republic of Moldova, it is important to mention the fact that large companies prefer to influence its national economy mainly by the establishment of joint ventures here. Affiliated and assimilated companies are presented in Moldova more rarely than firms with foreign capital.

According to the National Bank of Moldova, Romania, Italy and France are the major investors in banks’ social capital while other sectors (industry, manufacturing, retail, telephone) are dominated by capital coming from the Russian Federation Netherlands and the USA.

According to statistics, in Moldova are registered 812 subsidiaries of Russian Federation companies with capital invested in amount of 944.4 million lei. Among the largest subsidiaries of Russian companies registered in Republic of Moldova are Lukoil and Topaz. Russians also have placed huge capital in a number of Moldavian wineries.

From the Prut River, the largest investors in Moldova are Romanian Rompetrol, Petrom Romstal and Metro Cash & Carry, with the level of capital invested equal to 378.3 million lei.

The largest French-owned enterprises operating in our country are Mobiasbanca, Lafarge and the mobile phone company Orange. The total number of subsidiaries of French companies presented in Moldova is 192, with an invested capital of 125.5 million lei.

The presence of Germans in Moldova is observed by existence of 381 subsidiaries of big German enterprises, and the level of capital invested is over half a billion lei. Germany is on the sixth place after the number of foreign enterprises presented in our country. Among the biggest German companies operating in Moldova are TirexPetrol oil company, Dräxlmaier Automotive Group, manufacturer of auto electrical systems for renowned car brands BMW and Mercedes, Benz and Knauf - manufacturer of construction materials.

The Netherlands is also one of the largest foreign investors in our economy with the share over 18%. In Moldova are registered about 60 Moldovan-Dutch companies, where the largest is Dutch Easeur Holding BV. Netherlands detains the biggest number of shares of international free port Giurgiulesti, more than 80%.

Major Foreign Investments flowing to Moldova are concentrated in BCR bank,  "Shan Lian International Group" Company commercial center Megapolis Mall, Danube Logistics SRL, Metro Moldova, Mobiasbanca Groupe Societe Generale, Draexlmaier Automotive, Moldcell, Red Union FENOSA, Knauf-gips, Orange, Lafarge Cement (Moldova) SA, ProCredit Group, Raiffeisen Leasing SRL, Sudzucker Moldova S.A, Lear Corporation SRL, Lukoil and Western NIS Enterprise group.

The major reason of transnational companies’ existence in the Republic of Moldova is that they concentrate on using labor force at a low level, at the same time preserving the difference between people, leading to bipolarization of the society in the country.

Table 3.2

Sorting Moldavian companies with Foreign Capital

Nr.

Country

Nr. of enterprises

%

Capital invested(mln. lei)

1

Romania

1285

15

425,7

2

  Italy

936

11

214,8

3

  Turkey

932

11

221,1

4

  Russia

826

10

944,5

5

  Ukraine

702

8

173,8

6

  Germany

384

4

547,8

7

  U.S.

379

4

586,3

8

  Cyprus

274

3

818,6

9

  israel

253

3

39,8

10

  Great Britain

212

2

454,9

11

  France

192

2

125,5

12

  Bulgaria

163

2

44,4

13

  Syria

160

2

4,7

Other

1976

23

3854

Total

 8674

 100

 8456

Source: State Chamber of Registration http://www.cis.gov.md

Romania, Turkey, Italy, Russian Federation and Ukraine are the top countries with the greatest influence on local market, these states control companies with the capital over billions euro from the areas of energy, banking, insurance, retail and industry.

Table 3.3

Sorting the companies with foreign capital operating in Moldova, according to their investments in social capital

Nr.

country

nr. of enterprises

capital invested(mln. lei)

%

1

Netherlands

145

1960,0

23

2

  Russia

826

944,5

11

3

  Cyprus

274

818,6

10

4

  U.S.

379

586,3

7

5

  Germany

384

547,8

6

6

  Great Britain

212

454,9

5

7

  Romania

1285

425,7

5

8

  Spain

62

315,9

4

9

  British Virgin Islands

69

224,3

3

10

  Turkey

932

221,1

3

11

  Italy

936

214,8

3

12

  Poland

66

192,3

2

13

  Ukraine

702

173,8

2

Other

2402

1376

16

Total

8674

8456

100

Source: State Chamber of Registration http://www.cis.gov.md

Investopedia defines social capital as the connections between individuals and entities that can be economically valuable, as well as social networks that include people who trust and assist each other. These relationships between individuals and firms lead to a state in which each will think of the other when something needs to be done, and it is a valuable mechanism of country’s economic growth.

Trade Unions in the Republic of Moldova undertake viable measures in order to balance the situation especially in the direction of insuring labor security in the transnational enterprises, which activates on the territory of Republic of Moldova. At actual stage, in these conditions, a pressing problem which faces the Unions from Republic of Moldova is insuring security at the working place, insuring of an wage which could cover the minimum existence level and the diminishing of the unemployment ratio.

Today at Moldavian market activates big number of joint venture companies established by world leading transnational corporations.

The most influential multinational companies operating in Moldova and which have significant influence on development of Moldavian National economy are [4.16, The American Chamber of Commerce in Moldova (AmCham Moldova)]:

Abbott- international diversified company that works in the field of Public Health with head office in Chicago, USA;

Coca-Cola Bottlers Chisinau operating in 28 countries with a total population of more than 550 million;

SUDZUCKER International S.A - Moldo-German joint-stock company;

AVIS rent a car (Moldova) with head office in Baltimor, USA;

Bayer HealthCare Pharmaceuticals with head office in Leverkusen, Germany operating in the fields of Animal Health, Pharmaceuticals, Consumer Care and Medical Care;

BDR Associates Communication Group (Moldova) that is leading public relations and strategic communication agency with head office in Romania;

ICS Bemol Retail SRL that is wholly owned subsidiary of the Dutch Company EASEUR Holding BV;

British American Tobacco in Moldova that is owned subsidiary of UK and USA Imperial Tobacco Company;

Carlsberg brewery group Moldova with headquarters in Copenhagen, Denmark;

Chemonics International is an international development consulting firm that designs and implements projects in private sector development, democracy and governance, financial services, health, environmental management, conflict and disaster management, and agriculture with head office in USA;

Deloitte that fastest-growing professional services organisation, Moldavian subsidiary is under responsibility of Romanian Office and the headquarters are in New York, USA.

EFES VITANTA MOLDOVA Brewery is an affiliate branc of EFES BEVERAGE GROUP and is the biggest brewery in the country, with brewing traditions since 1873 and with headquarter in Istanbul, Turkey;

Ernst & Young (EY) Moldova is one of the largest professional service firms in the world with headquarters in London, United Kingdom, that opened an office in Chisinau in 2001;

First Audit International is a joint Moldo-English audit firm founded in 1996 with headquarters in London, Great Britain;

GlaxoSmithKline MD that has a mission to improve the quality of human life by enabling people to do more, feel better and live longer. Headquarter in the UK and with operations based in the US.

From other MNC’s branches operating in Moldova can be mentioned: Hammer, Herbalife, Hewlett-Packard, Hideco, Indra Sisteme, Japan Tobacco International Luxembourg, Representative Office in the Republic of Moldova, KPMG Moldova, Lafarge Ciment (Moldova), McDonalds Restaurants, Moldcell- a part of international Swedish – Finnish group TeliaSonera, NCH Advisors INC Representative Office in the Republic of Moldova with headquartered in New York, United States of America, NovartisPharma; Orange Moldova that is a subsidiary of France Telecom Group; Pedersen & Partners; Philip Morris Management Services B.V. Representative Office in the Republic of Moldova opened in Chisinau in 1996; PricewaterhouseCoopers that has entered the Moldovan market in 1996; Red Union Fenosa; Rilvan Moving and Relocations Group; Rompetrol Moldova; Sanofi Zentiva Moldova; Trans Oil Group of Companies; Vernon David with an eight year presentation in the region; Xerox that provides network management, consulting, design, and integration services for medium and large companies and others.

Labour relations in Moldova are regulated by the Labour Code (effective as of 1 October 2003), Collective Labour Conventions (at national, territorial, branch and company level) and other special laws (e.g. Law on wages).

The Labour legislation provides employees with minimum guarantees which cannot be worsened or limited by any employment contract. Certain aspects of employer - employee relations are governed by internal regulations adopted at the company level by the employer (e.g. staff handbook).

Role of Trade Unions in Moldova. Trade unions are very tough strong in negotiations on labour relations. They are currently effective in obtaining minimum wage legislation, as well as other basic rights for employees. They also conclude annual collective labour agreements at different branch and company levels. Union membership for employees is not compulsory, but still has a high-level of influence in large and state-owned enterprises. In small private companies they tend to be less active. Employers are obligated to ensure the necessary conditions for the activity of unions. Unions have no right to participate in the management of a company and its commercial activity. Nevertheless, sometimes the employer should take the opinion of the trade union into account when adopting internal regulations (i.e. internal policies) or dismissing trade union members.

The system of salaries and wages in Moldova. An employer may not negotiate and establish a basic salary lower than the national minimum gross salary. This is currently MDL 1300 (about EUR 85) per month for privately-owned companies. The average monthly salary amounts to MDL 3,550 (about EUR 230) for year 2012, having increased by 7.5% from the previous year. Currency regulations demand that salary payments be made in local currency (MDL), including those to foreign staff.

Working Hours in Moldova. The standard working week stated in the Labour Code is 40 hours, over five or six working days a week, but generally from Monday to Friday. The law defines limits and rates for overtime, holiday / weekend and night work. Working hours on weekends or holidays can be either compensated with free time or paid. Overtime is generally paid as 150% of the hourly rate for up to a specified number of hours and 200% beyond that.

Paid Holidays in Moldova. Annual paid vacations are established at a minimum of 28 calendar days a year. Additional paid leave can be given to employees for special occasions such as a marriage, birth of a child, death of relatives, study, etc. Sick and maternity leaves are paid from the Social Insurance Budget.

Termination of Employment in Moldova. An individual employment contract may be terminated at the initiative of the employers on the specific grounds stipulated by the Labour Code (e.g. failure of trial period, staff redundancy, systematic non-compliance with regulations / requirements or absence of the employee from the working place, theft, etc). The Labour Code gives additional protection to specific categories of employees, including minors, female employees, employees with children, union members and various other categories. There are specific situations in which employment cannot be terminated by the employer (e.g. during sick leave or maternity leave). Severance payments may appear in specific situation such as termination of the contract due to liquidation of the employer, staff redundancy or in the situation then the employee does not correspond to with the held position due to its heath situation.

Peculiarities of employment contracts in Moldova. The conclusion of written individual employment contracts with all employees is compulsory. The contract should contain provisions concerning the employee position, salary level, working conditions and other mandatory issues. As a general rule, employment contracts are concluded for an indefinite period. Fixed-term employment contracts may be concluded only in specific situations provided for by the Labour Code. Employment contracts may provide for a trial period of employment up to six months.

Foreign workers in Moldova. Foreign citizens who work in Moldova based on a local labour contract or those seconded to Moldova have to obtain a work permit. Specific incentives in obtaining the work permits are provided for the management of large companies with foreign investments.

Employee gross income includes:

basic pay,

overtime pay,

supplementary pay,

awards and bonuses,

compensation from unused holiday or vacation time, as well as

benefits in kind (e.g. housing allowances, compensation for school fees, food and personal travel expenses).

Moldovan tax law provides for special rules (i.e. tax exemption) regarding the income obtained by members of diplomatic missions, and other missions accredited as such, and their personnel. The annual personal allowance provided for Moldovan residents is of MDL 8,640 (approximately EUR 560). Individuals can also benefit from a spouse’s exemption of the same amount, provided the spouse does not use it in the year concerned.

In addition, an individual benefits from an annual allowance of MDL 1,920 (approximately EUR 125) for every dependent (except for those disabled since childhood that are entitled to the MDL 8,640 (approximately EUR 560 exemption per year). If a dependent have several supporters, exemptions for dependents will be given to every supporter.

Contributions to the Social Fund are mandatory for Moldovan citizens, but unlike taxes they have an exact destination and are available for refund to the taxpayer in the form of pensions, allowances, etc.

Health insurance contributions in Moldova. The mandatory health insurance contribution, computed as a percentage of wages and other forms of payment and remuneration.

Temporary work incapacity related costs. The payment of the allowance for temporary work incapacity due to common illnesses or accidents unrelated to work for the second calendar day are to be paid as follows:

• the first calendar day – paid by the insured person / employee

• the second, third, and fourth calendar day – paid by the employer

• starting with the fifth calendar day – paid by the social security state budget.

3.2 Approach to people management within Moldavian subsidiary of a Multinational Company. Case Study.

"Abbott Products" company:

Address: 40 Lazo Street, 7th floor, office 7

City: Chisinau, MD-2004

Tel: +373 22 228 410

Email: [email protected]

Webpage: www.abbott.com

Type: Pharmaceuticals/Cosmetics

Analyzing the major trends in Human Resources Management used within Moldavian subsidiary of a multinational Abbott company with head office in Chicago, USA I have put the major attention on such questions as:

the HR manger’s function within the subsidiary;

pay and performance management;

employee representation and consultation;

employee involvement and communication;

training, development and organisational learning;

system of benefits and opportunities.

Abbott Products, company background. Abbott is a well-known international Multinational Company that is concerned with supplying Public Health Services. It operates in the field of developing new pharmaceutical drugs, medical treatments and technologies. Company’s mission is to promote Healthy Lifestyle around the world. Keeping this core objective in mind Abbott Products provides significant investments in protection healthy way of life, applying in practice all recent achievements and innovations obtained in the field of healthcare. Company’s head office is in Chicago, USA. The company’s products are diversified in more than 130 countries around the world. Abbotts has approximately 83,000 employees in all corners of the Globe, including in Moldova. In 2010, Abbotts has products merged with Solvay Pharmaceuticals that has resulted in a number of successful performances for both of them. This mergence provided development and research in new, previously not discovered fields of medicine and has resulted in improving conditions and level of healthcare around the world. Core Abbott’s goals are care, attention, respect and help to those who are dependent on this sustenance. For continuous improvement world health care system Abbotts Products make huge investments in scientific research and development in the field of medicine and in, of course, modernization of technologies used.

Abbott Products corporate values. Abbott Products has four core corporate values that are worldwide: innovation, achievements, care and constancy.

Innovation- is oriented toward satisfaction customers’ needs and expectations through production of new, modernized and more efficient medical equipment and by developing new ways and methods in health care. For Abbott Company, development and introduction in common use of modernized technologies- is a right way toward innovation.

Achievement- Abbott is a very self-rigorous company as to itself so to others who are working with Abbot, because company’s work has an effect on the lives of other people. For achievement best results in what it is doing, company focuses on shared, cooperative work and mutual trust based on implementation of all its promises.

Care-Abbott is continuously improving itself for making other people life better. Care is a core element in the company’s policy that aims directing people toward healthy way of life.

Constancy- means both the respect for company’s history and the fulfillment of its obligations in the future. Company fulfills promises acting in accordance with all its values.

In 2010, Abbott took the first place in the top list of the world’s most respected companies in the pharmaceutical industry according to FORTUNE magazine and the 80th place in the top list of FORTUNE 500 [4.17, Abbott Products].

Company supplies products that can satisfy and improve peoples’ health care requirements, from nutritional care and means of laboratory diagnostics to medical devices and medicinal drugs for different age categories [4.17, Abbott Products]. For production and diversification of original pharmaceuticals Abbott has become world known leader. The fact, that medicinal drugs produced by Abbott Products Company are efficient, secure and reliable has been proven by experts in health care and medicine around the world. Abbott’s modern factories built on the basis of European Union and USA standards are using cutting-edge technologies, that is why Abbott is included by the Science magazine's 2012 in the top 20 employers according to Top Employers survey. On the basis of 23 characteristics Abbott Products has been named the best employer in 2012 via annual employees surveys made inside innovation-based companies around the world.

Employees are given the tools to succeed, lead and grow, with challenging opportunities and work that makes a difference. Through company’s diverse healthcare businesses, company connects people and potential in ways that no other company can. Abbott has created all necessary conditions to keep people energized, committed and enthusiastic for improvement human healthcare and way of life around the world. Abbott’s "Promise for Life" embodies this commitment. Abbott’s employees are ready to meet change and challenges head-on, knowing that speed is vital to the fulfillment of Abbott Promise. Company takes pride in its 125-year history. Abbott understands importance of employee’s diversity, providing special attention to those who shows exceptional performance and ubiquitously trying to achieve trust of those whom company serves.

Abbott Recruitment process. Abbott recruitment process is based on 3 major steps as: application process, interview and after interview process.

Application- when a person applies for a specific job, he/she you receives a confirmation acknowledging about receipt of application. Company’s recruiters will review and identify those individuals possessing the background and education that most closely matches the requirements of the position. Selected candidate will be contacted by the recruiter to discuss the next steps in the process. If a person is not selected to advance selection process for the specific job opportunity in which he/she expressed interest, he/she may still be contacted about other opportunities. Person’s personal profile will remain on record and can be updated at any time.

Interview- selected as a candidate person will be asked to interview with a team that will typically include the hiring manager, members of the work team, and other Abbott professionals as needed. These interviews typically are conducted in one day and are usually in person, although a phone interview may be used in some situations.

After the interview process- the recruiter will communicate when applicant can expect a response after interview. The interview teams thoroughly review all information for the final hiring decision. Applicant, who receives an offer of employment, will be given details on the compensation package, Abbott benefits and additional pertinent information to help him/her make a well informed decision. If there are questions on the offer, each applicant is encouraged to contact the recruiter. If person is not selected for a position, company recommends that applicant to continue to search the careers site at Abbott, as new positions are frequently posted, while always updating personal profile as company’s recruiters continue to review the database.

Abbotts Company Diversity and Inclusions.

Abbott has a passion for diversity – in its people, technologies applied, products developed, services provided and markets covered. The fundamental of Abbott’s business strategy is protection and keeping in line with this workplace diversity because Abbott employees provide company with a range of perspectives and insights that help them better understand and connect with company’s customers. Effective maintaining of workplace diversity helps in development innovations inside the company that is a right way toward elimination arising issues in health care. Company’s highest levels support such. Abbott ensure employees’ commitments and engagement through involvement in management and development their talents and skills. It helps business a lot. For employees success and prosperity as at work place, so during their personal life, Abbotts Company is always supporting employees with a variety of tools. Such tools are- mentoring programs that have formal character and are broad-based, employee inclusion networks, a comprehensive menu of work-life offerings and global culture surveys [ 4.18, Abbott diversity & inclusion]. Variety of honors and rewards has been granted to Abbott’s company because of it diversity and work-life incentives. They include being named to Diversity Inc magazine's "50 Best Companies for Diversity," Hispanic Business magazine's "Top Companies for Diversity Practices," and Working Mother magazine's "100 Best Companies for Working Mothers" [ 4.18, Abbott diversity & inclusion].

Abbott uses a strategy for facilitation the life and supporting peoples with disabilities that are currently working for the company. Abbott Company is one of the members who has founded an organization known as Kanchi network, that is concerned with changing human’s way of thinking about disable persons and especially their role in business environment.

Links between Abbotts employees around the world helps in development of inclusive culture and business networks. All expenses for creation of such networks are carried by corporate officers. Networks help significantly in merging company’s strategy with company’s goals. Abbott HRM polices are focused on career development, deeper involvement in community, mentoring, informal networking and development leadership skills, those creating opportunities for employees. Nearly 8,000 employees worldwide participate in company’s six networks [4.19, A Diverse, Inclusive Workplace]:

Asian Leadership and Cultural Network (ALCN);

Black Business Network;

La Voice Network (Hispanic/Latino);

Flex Network (part-time and flexible schedules);

PRIDE (gay/lesbian/bisexual/transgender);

Women Leaders in Action (WLA).

These company’s networks helps employees in mutual sharing of their knowledge, providing some coaching possibilities and helping them to use their uniqueness in performing different business operations. For example, ALCN provides translation services to high-level delegations of government officials and key opinion leaders visiting company’s headquarters. Similarly, the La Voice Network, representing Hispanic and Latino employees, provides translation support when needed for Spanish-speaking customers calling company’s telephone hotlines [4.19, A Diverse, Inclusive Workplace]. Those Abbott’s networks help company to create trust in its employees, to promote and manage workplace diversity, to stimulate personal growth and professional development of employees. Each employee can participate in those Networks equally, independent of their nationality, sexual orientattion, age, gender and ethnicity.

Abbott’s HRM policies set minimum requirements in the following areas:

Health and Safety Policy and Program

Strategic Planning

Self-Assessment/Risk Assessment

Business Integration

Training and Awareness

Communication and Information

Performance Measures

Assurance Reviews

Health and Safety Global Standards

Mentoring programs in Abbott. Mentoring programs can be as formal so informal and are very important in managing and improving employees’ skills inside the company. Abbott's formal mentoring program offers employees opportunities to work in properly organized long-year partnerships with old professionals who worked for the company for a long period of time. Protégés and mentors are selected by employees from online program, describing each professional according to his/her qualities, qualification, skills and experience in various fields. Those mentoring programs help to improve and develop skills, to share accumulated knowledge, to learn more deeply about organizational structure, to create informal personal and influential business networks. At the same time each Abbott employee can nominate themselves as mentors or protégés. Mentoring programs are always available online so that employees can register and start mentoring at any time.

Recruiting Conferences organized in Abbott. Being nominated as one of the best world employers Abbott improves and creates such working environment that motivates and helps employee to become more successful and to achieve career growth. Abbott has links with Academic organizations for hiring the best ones that will contribute significantly for the company.

Career Opportunities with the Abbott. Company offers numerous career paths that help employees to succeed in various companies’ fields as research, marketing sales, finance, administration and more.

Growth Planning and Performance Excellence. Each Abbott employee yearly participate in Growth Planning and Performance Excellence plan where he/she is flexible and open to discuss with managers and executives issues that bother this employee as well as possibilities for his/her future growth. Growth Planning and Performance Excellence process has three steps:

establishing expectations – establishing strong goals that correspond to company’s business strategy;

assessment/feedback - receiving continuous feedback on employee’s performance from his/her executives and managers.

growth and development plan- reviewing, declaration and working upon a plan that helps employee’s to achieve growth needs.

Training and Networking in Abbott. Company provides courses with professionals as well as online courses that help employees to develop new skills and career. Employee Networks stimulate and motivate them to be deeper involved in mentoring and career networking, providing them possibility to receive important experience and to develop leadership skills.

Reward and Recognition in Abbott. System of benefits and opportunities. These who contribute significantly to the company’s success and show high levels of job performance are always excellent rewarded by the company. Employees who make contributions in science participate in Volwiler Society Award. Top sales people participate in the Abbott All-Star Award. All employees can participate the President’s and Chairman’s awards according to the level of their job performance. Abbott provides employees and their families with competitive benefit offerings and innovative solutions to help them pursue their passion for life – at work and at home. Company offers benefits that include employee and retiree medical coverage, health and wellness programs, commuter benefits, childcare solutions, an innovative phased retirement program and many others.

Health and Fitness benefits in Abbot. Being a health care company Abbott is always trying to stimulate it employees to lead healthy way of life, motivating them to be healthy as mentally so physically. At the official Abbott website for all employees is available four-week fitness program. Company rewards these employees who participate in fitness programs and follow healthy way of life. Abbott offers its employees medical, vision and dental health care services and they has the right to select the one that is the most appropriate and needed for them. Additionally company offers tickets to fitness centers and health clubs as well as discounts to sport and gym clubs.

Medical care services for Abbott employees. Abbott protects its employees and members of their families from possible medical care expenses offering them additional medical care payments. Medical coverage can be used from the first day of employment.

Dental care services for Abbott employees. Dental care payments are oriented for coverage all expenses assumed by Abbott’s employees and members of their family for dental care services. Dental coverage can be used from the first day of employment. Employees take advantage from reduced cost of visiting dentists in other areas and countries covered by Abbotts m Network.

Vision care services for Abbott employees.. Vision care payments are oriented for coverage all expenses assumed by Abbott’s employees and members of their family for controlling and maintaining their eyes healthy. Vision coverage can be used from the first day of employment.

Managing Work and Family. Abbott prefers to offer it employees flexibility in work place including flexible work weeks, part-time work and sharing the job. It motivates them to make their best at work and at the same time to perform and manage personal responsibilities in their families.

Flexible spending accounts in Abbott. Flexible spending accounts in Abbott are created for saving money on unexpected health care expenses and expenses for maintaining family-dependents. Coverage can be used from the first day of employment.

Wellness programs in Abbott. For promotion employees’ well-being and healthy life company has developed its personal Wellness program that includes [4.24, OFFERINGS. Work-Life Programs]:

seminars and online resources on health-related topics, including stress management, nutrition, safety and balancing work and family needs;

health promotion programs on topics such as diabetes, cancer and weight management;

on-site screenings and immunizations at some locations to promote disease awareness and early detection;

on-site fitness and rehabilitation centers at some locations that offer professionally supervised programs, including aerobics classes, fitness assessments and rehabilitation services;

health fairs and fitness events.

Incentive Programs for the best employees. Employees from all levels, who make significant contributions in Abbott’s financial growth and development, are highly rewarded by the company.

Insurance of Abbott’s employees. Abbott’s employees receive life, travel and long-term care insurance benefits.

Life insurance - company makes compulsory life and accidental insurance for it employees as well as gives them the right to receive additional insurance for their dependents.

Travel accident insurance- for business trips around the world Abbott Company pays entire cost of employee’s traveling insurance.

Long-term care insurance- in case of illness or possible disabilities of Abbott’s employees and members of their families in the long run, especially in the periods when they haven’t possibility to take care about themselves, company provides them with access and tuition for health care services. It is applicable also for retired employees.

Retirement Benefits in Abbott. Company helps its employees to save money for their future. With this purpose Abbott has developed annuity retirement plan and stock retirement plan.

Stock retirement program - means that employees invest some of their money in different companies and projects with various levels of risk. Employees can register in such program immediately after being hired at work and will be fully vested after two years of work.

Annuity retirement program- wholly paid and supported by the company. Employees can register in such program immediately after being hired at work or implementing 21 year and will be fully vested after five years of work.

Paternity leave benefits in Abbott. Abbott highly appreciates fathers’ desire to participate and take care for their newborn babies. Company pays Paternity leave for males employees on the births of their biological child, offering them two weeks of paid leave within 15 weeks after birth of their biological kid.

Extended disability plan in Abbott. Those employees who can’t work because of their illness, as well as those who has more than 32 working hours per week, but can’t go to work because of their qualifying disability during last six month are legal to receive wage-based disability benefit for every moth of their illness.

Vacation and Holidays in Abbott. Company offers its employees magnificent holidays time, that include 11 paid holidays yearly plus for new employees three weeks vocation per year.

Abbott Child care solutions. Abbott makes huge investments in helping their employees in child care services.

Programs for Abbott’s Mothers at work. This program was created for supporting and helping females, who have suckling, to get easier in their everyday work environment. It provides compensations for these females on purchasing breast pumps, maternity consultations, consultations on lactation issues and many other benefits.

Work-life services in Abbott Company. For any issues that bother Abbott’s employees (including retired ones (from 65 years) as well as their family members and dependents company offers for them free of charge consultation. It can be consultation in the field of financial challenges, disability services, child and elder care problems, social problems and many others. For this purpose company also created Web-page where are available free CDs, educational literature and guidebooks on work-life challenges.

Pay for Performance. Company uses strategy of rewarding and paying their employees according to the level of their performances. Abbott is competing for it employees with other worldwide known companies from the field of health care on the basis of rewarding system and systems of benefits and compensation.

Executive Compensation program in Abbott Company. Executive compensation program is concerned with merging company’s values, managerial system and business polices with it shareholders. This Executive compensation program has the next standards [4.23, Compensation and Benefits]:

Base salaries are competitive in the markets in which company compete for employees.

Incentive plans are designed to balance short- and long-term financial and strategic objectives that build shareholder value and reward overall company and individual performance.

Total compensation for Abbott executives compares well to that of companies performing at levels equivalent to Abbott.

Incentive compensation (both annual and long-term) is a key component of Abbott’s pay-for-performance philosophy. Company’s structure ties individual awards to both business and individual results, to motivate our employees to achieve superior performance.

Cross-Cultural Training. As Abbott is an international company, it employees are always working and travelling outside. During business trips each employee has free access to Cultural Navigator™ that contains information on more than 100 countries, including everything about countries’ management style, business strategy, cultural values, customs and ethical standards. This Cultural Navigator helps employees to analyze potential cross-cultural misunderstandings during their business trips as well as to be prepared for any arising issues in their foreign business activity. About 2,000 Abbott’s employees worldwide has used this tool in 2012.

Abbott highly respects rights and individuality of its employees. Company develops its policies and strategy keeping in mind standards established in Universal Declaration of Human Rights. Company’s core values and mission are created on the basis of those standards. Abbott complies with national and international laws and requirements protecting human rights of everyone who is working on the company, and takes these laws into consideration developing various human resources programs.

Company’s guidelines include [4.22, Human Rights in Abbott]:

encouraging open communication between management and employees;

complying with child labor laws and laws prohibiting any form of forced, bonded or indentured labor or involuntary prison labor;

providing compensation and benefits that are competitive and comply with applicable laws for minimum wages, overtime hours and mandated benefits;

providing a healthy and safe working environment;

promoting workforce diversity and not discriminating against any employee for reasons such as race, religion, color, age, gender, ethnicity, disability, religion, marital status, sexual orientation or any other status protected by law;

not tolerating harassment or harsh or inhumane treatment in the workplace;

protecting individual privacy.

Business Ethics and Values at Abbott Products Company. Company respects fusion of cultural values and develops high ethical standards that are convenient for managing employees at all levels from local to national and international. Company’s ethical standards and commitments are embodied in Abbott Promise for Life, a statement that describes – for customers, communities, shareholders and all other stakeholders – what company believes, what it values, and what it strives to deliver in its working environment and cooperation with its business partners. This Promise for Life encourages company for actions and implementation of its decisions and promises, ensuring that company lives up to the highest expectations it set for themselves and for better serving its stakeholders. It challenges company to continually improve and inspires to always aim higher.

3.3 Challenges and emerging trends in International Human Resources Management

The rapidly changing business environment currently results in existence of variety of HRM challenges that for sure will continue to hit it over the years. As the business world changes, so changes and the role of HR professionals. Successful and effective human resources manager can understand company’s strategic areas and directions, and as a result can influence on company’s core key policies and company's decisions. In addition, for being successful and competitive on the modern international market, MNCs must exactly identify major HRM challenges and develop the best solutions for their elimination.

International human resource management involves a number of issues that are not present when the activities of the firm or organization are organized in one country.

The issues in global HRM include:

the variety of international organizational models that exist;

the extent to which HRM policy and practice should vary in different countries. (This is also known as the issue of Convergence and Divergence);

the problem of managing people in different cultures and environments;

the approaches used to select, deploy, develop and reward expatriates who could be nationals of the parent company or ‘third-country nationals’ (TCNs) – nationals of countries other than the parent company who work abroad in subsidiaries of that organization.

Today's Top 10 Human Resource Management Challenges faced by the subsidiaries of MNCs worldwide (Survey has been made by Global HR Challenges: Yesterday, Today and Tomorrow, on behalf of the World Federation of Personnel Management Associations (WFPMA) and conducted by Pricewaterhouse Coopers) are [4.20, Villanova University. Human Resource Management Challenges]:

1. Change management- 48% of companies

2. Leadership development- 35% of companies

3. HR effectiveness measurement- 27% of companies

4. Organizational effectiveness- 25% of companies

5. Compensation-24% of companies

6. Staffing: Recruitment and availability of skilled local labor- 24% of companies

7. Succession planning- 20% of companies

8. Learning and development - 19% of companies

9. Staffing: Retention- 16% of companies

10. Benefits costs: Health and welfare- 13% of companies

With the processes of globalization and increase in competition in order to survive companies must become more adaptable, stable, flexible, and customer-oriented to succeed. That is why HR managers primarily must become for the company it strategic partners, employee supporters and coaches. Companies’ success today depends on the understanding and keeping in mind that HR management is business driven function that can influence company’s key decisions and policies. Development of new talents and retention of employees are major functions that each HR manager should be focused on. HR professionals must be coaches, counselors, mentors, and succession planners helping company to encourage employee’s loyalty, promote and fight for values, ethics, beliefs, and spirituality within their organizations, especially in the management of workplace diversity [3.5, 87 p.].

Issues in Managing Multicultural workforce diversity. The fusion of company’s workforce diversity include differences in employees gender, age, nationality, ancestry, physical abilities/qualities, race, sexual orientation, educational background, geographic location, income, marital status, military experience, religious beliefs, and work experience [3.5, 87 p.]. Managing this diversity companies can improve employees’ performances through development and orientation them toward bringing their own ingenious ideas and innovative ways of implementing their work. Cultural diversity in the workplace can easily become company’s strategic organizational asset, but only when company can find advantages from the fusion of these cultures. Finding proper way of managing this diversity in workplace companies can become more competitive reacting more rapidly and creatively on various opportunities in business. When the organizational environment does not manage diversity broadly there are risks that company’s employees will prefer to work in competitor’s company. It is significantly important for MNCs that hire people from different corners of the world with different cultural, ethical and national backgrounds. It means that each HR manager, operating in the International area must ‘Think Global but Act Local’. If company can manage effectively this cultural diversity it will achieve success in diversification its business opportunities and will increase customers’ loyalty. For effective managing workplace diversity, HR Manager needs to change from an ethnocentric view (our way is the best way) to a culturally relative perspective (let's take the best of a variety of ways) [3.5, 87 p.]. The idea of taking the best of a variety of ways must be integrated in HR manager’s functions as planning, leading, organizing and controlling.

HR Manager should use such practices that will ensure the most efficient management of workplace diversity in order to achieve company’s goals:

Development of Mentoring Programs- is an effective way for managing cultural diversity in the workplace through coaching and providing feedback from managers to company’s employees. At the same time for efficient and productive functioning of these programs managers should receive continuous consultation and advises from other specialist in the field of HR management. These programs will encourage employees to express their opinions on various issues as well as will help managers quicker identify the ways of resolution conflicts in the field of cultural fusion. The major objective of such Diversity Mentoring Program is to stimulate company’s members to overcome their cultural frames and barriers in order to take the full advantage from their cultural diversity and directing it toward improving productivity and performances.

Strategic organization of talents- today the majority of companies understand how cultural diversity can stimulate and increase company’s performances. Hiring employees with different cultural backgrounds helps companies to succeed in research of new covered markets especially in modern globalizing world. HR manager must be able to identify the best ways for organizing and management of this diversity that is important in achievement and improvement company’s goals as well as diversifying company’s area of functioning through covering new markets. All issues concerned with workplace diversity will be easier faced by the company when it will treat this cultural difference as an asset instead of liability.

Leading the Talk –each HR Manager shall express interest of all employees from all organizational levels, showing respect to everyone independently from their cultural background. Managers must have enough skills for resolving company’s workforce diversity issues in a proper, respectful and highly ethical way.

Evaluation and Control of Results - a HR Manager is responsible to perform evaluation of company’s results in the field of salary levels, changes in the work environment, increase or diminution of benefits, improvement of management and promotional policies and practices in the long run. Development of appropriate system for control and evaluation of workforce diversity will not allow company to failure.

Techniques of Workforce Motivation – good motivation techniques can motivate employees to show higher levels of work performances and to be more efficient in the workplace while doing things for achievement company’s goals. Each employee has different needs that less or more motivate him/her that is why it is very important for HR managers to know and operate with different motivation tools and techniques for keeping staff always motivated. Core factors for motivating employees in the workplace are company’s reward system, job description, work environment and system of benefits. The most influential motivation factor in the majority of modern companies is powerful and well-functioning reward system, because it helps employees to feel more comfortable and happy, keeping them always satisfied.

Managing Change: Managing change brought and implemented in organization is one of the difficult challenges that international HR managers can face. Because of process of Globalization, business environment is rapidly changing and is always evolving. Continuous improvement employees’ skills through trainings and consultations, keeping them in a line with cutting-edge technologies are the biggest issues for HR departments today.

Retaining the Talents- because of process of Globalization, each employee, especially these who are very skilled in what they are doing, are free to work in different corners of the world. That is why with the purpose of motivation and retention of employees HR managers must create for them better or even excellent work environment, keep with them positive relations based on mutual trust and understanding, offer more benefits and higher rewards comparing to company’s primary competitors.

Conflict Management- HR managers should be rational and specially trained in the field of handling conflicts that can arise between employee-employer or employee-employee. It is very difficult, even impossible to avoid any kind of conflicts in the workplace, but HR managers should be enough skillful to resolve them peacefully, listening interests of each conflicting party, deciding and communicating in a persuasive way for avoiding such situations in the future.

Emerging Trends in Managing Human Resources. Today the best employee can be described as one who is creative, shrewd in business, quickly educable and positive member in company’s network, he must be enthusiastic and ready to experiments, as well as always scanning new opportunities for raising his level of performances in the company. Such employees will prefer to work in a company that has high respect and is honest with it employees, that has flexible working environment and strong values, that is always improving and developing under influence of globalization processes.

That’s why today approximately all organizations are taking measures in three directions [4.21, Emerging Trends in Managing Human Resources]:

First, companies create an organizational ambience where talent can bloom.

Second, they put in place systems that help unleash their potential.

Third, they build a reward and recognition mechanism that provides value for people.

Today companies has significantly changed it structure. With structural changes, has been changed and HRM policies and practices inside, established new priorities and ways of managing. Organizational structure based on rigid hierarchy has gone to the past, while now the majority of competitive companies have moved to open and flexible work environment, informality in communication channels with more rights and authorizations for employees.

Modern work is based on projects that require team working and cooperation between employees. That is why many companies today develop such reward systems that will compensate team performances as an additional bonus to individual employee’s fixed salary.

In the same time today many companies practice working from home and reporting on achieved results via video-conferences. For keeping such employees in a line with emerging business trends companies try to provide intellectual stimulation to employees in the form of continuous online trainings and consultation for improvement their skills and qualification, in-house libraries, sharing of talents and knowledge, helping the best employees to pursue additional degrees in academy for their career growth within one company.

Today companies, trying to be more employee-centered, are highly involved in improvement employees’ quality of work environment as well as their personal life and this is extended to employee’s family as well. Such company’s care is realized through allowing employee together with his/her family to visit free of charge health care centers, gyms and yoga centers for relaxing and diminishing stress. For being employee-centered MNCs are using recent international HRM standards as ISO 9001 and ISO 9004 focused on trainings, commitment and thrust.

As companies increase in their size they prefer to follow down up and cross level communication within the company with employees’ flexibility to express their opinions and thoughts on various issues, instead of previously used top down model.

In order to be more competitive in the international area, in conditions of globalization and uncertainty, MNC introduced Six-Sigma practices in their HRM policies. Six-Sigma practice is concerned with creation the best methods for feasible company’s growth and improvement of its management system using strict and accurate analytical tools involving employees from the top level of an organization.

And the most recent trend in HRM today is introduction of Human resource Outsourcing meaning that companies become less dependent from HR departments, because they use outside business relationship to perform different HR functions.

As I can summarize everything mentioned above, human resources strategy for the companies operating in Moldova should be directed toward:

continuous raising the quality of labor resources;

ensuring efficient high economic activity personnel;

optimization of organizational structure;

ensuring staff awareness in their relevance and importance for the company in achieving its human resources strategy.

In conclusion necessary to say that what is working today will not always work tomorrow, because world is changing every moment. Human resources policies should be always improved and developed on the basis of changeable market conditions and client’s expectations.