Cultural Implications of Transfer of Hr Practices in Mncs

Topics: Human resource management, Management, Multinational corporation Pages: 15 (5384 words) Published: February 4, 2013
Transfer of Human Resource Management Practices in Multinational Corporations: A Perspective

Dr. Daleep Parimoo
Associate Professor,
School of Business Studies
Sharda University, Greater Noida, U.P

Ms. Fehmina Khalique
Research Scholar at Sharda University and
Visiting Faculty
At Global Institute of Information Technology
Greater Noida, U.P

Abstract: With the advent of globalization and liberalization, the emerging economies like China and India have grown manifolds. The mushrooming of MNCs is taking place at a very fast pace. The role of HRM in these companies has shifted from being a mere administrative to strategic one. The companies have realized that HR policies form the framework for culture in the business management and human assets are an emerging source of competitive advantage for them. Therefore National culture plays an important role in absorbing the HR practices from the MNC headquarters to Host country subsidiary. This paper examines the various HR practices which can be transferred, whether the subsidiaries follow the HQ practices or adopt the local ones. This area of research has been left unexplored by the researchers and therefore an attempt has been made to identify the reasons of transfer and what practices are transferred as well as the impact of transfer on organisational culture. In the end the result of transfer will be discussed as to how these HR practices shape the subsidiary company.

Key words: International HRM, subsidiary, MNC, HRM practices, culture.

Transfer of Human Resource Management Practices in Multinational Corporations: A perspective

1. Introduction
According to Randhawa (2007) Human Resource management (HRM) refers to the policies and practices involving in carrying out the people or human resource aspects of a management position, including recruitment, screening, training, rewarding and appraising. Whereas, international HRM can be defined as set of activities aimed managing organizational human resources at international level to achieve organizational objectives and achieve competitive advantage over competitors at national and international level. Globalization is the buzzword today, and with the world shrinking it is very important to keep a track of activities of those employed in organisation in order to meet the competition. A multi-national corporation (MNC) has been defined as one which has its producing and trading activities in a number of countries, and which has a central organization regulating the activities of its units, across national frontiers, with specific global objectives. A host country is an independent nation state where an MNC has established its business operations through either subsidiaries or branches and affiliates. Indeed, HRM is evolving from being a mere support function to one of strategic importance. Several authors note that HRM policies and practices are becoming crucial because they can act as mechanisms for coordination and control of international operations. Furthermore, managing HR in an international context is more complex than in a domestic setup because of several pronounced differences between headquarters and the subsidiaries. In the light of globalization, it has been acknowledged that HRM constitutes a major constraint when MNCs attempt to implement global strategies, mainly because of the different cultural and institutional framework of each country in which a given MNC operates. Henceforth, these MNCs have to adjust their HR policies and practices according to the host environment. These MNCs either adapt to change according to the local HR practices and policies or try to implement their own. In order to survive the competition, HR practices are moulded according to the need. Culture is defined as the informal values, norms, and beliefs that control how individuals and groups in an organization interact with each...
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