International Human Resource
For the last few decades, business institutions have been faced with competition from other companies. Susaeta and Pin (2008) attribute this to a number of factors which have led to globalization. These factors include global integration, thorough research and marketing that have been done by the multinational companies (MNCs), and the liberalization of the global market (Susaeta & Pin, 2008). Other factors include the establishment of regional unions. An example of such a union is the European Union. As emphasized in Institutional and Cultural Influences on International Human Resource Management (n.d.) article, the MNCs have therefore used Human Resource Management (HRM) as a competitive advantage tool (International and Comparative Human Resource Management, p. 29). The role of HRM is now changing from that of support to a strategic tool. The department is now playing an important role in formulating policies that help to coordinate all the subsidiaries of the MNCs across the world. Its mandate is to streamline and influence the diverse culture by transmitting its practices across all the subsidiaries. However, many researchers have argued that HRM is facing constraints when they are trying to implement their policies across their subsidiaries (Tempel & Walgenbach, 2012). This is attributed to the complexities that result from managing individuals and companies in diverse cultural and national backgrounds (Harzing, 2010). The paper discusses the impact of cultural and institutional factors of the countries hosting subsidiaries on the implementation of HRM policies. The case studies that have been carried out in China and Greece form the basis of the discussion. As per the Union of International Associations (2005) book, a number of studies that have been carried out show that companies that are located in different countries normally have different HRM policies (p. 12). Moreover, the same studies have shown that transfering Human Resource policies to subsidiaries are difficult. These major restrictions have been linked to the institutional and cultural environment of each country (Susaeta & Pin, 2008). As opposed to the American Management Theory that calls for universal managing to be applied anywhere in the world, research has proved this wrong. This is because the behavior, management, and values differ in all national cultures (Linders, et al., 2004, p. 2). When formulating HRM policies, cultural beliefs of the societies or countries where the organizations are based should be considered to determine the society culture values (Tabellini, 2007, p. 6). This leads to restrictions when transferring certain HRM practices to the subsidiaries in the foreign countries. If the assumptions of the culture of the host societies are poorly made, then this will lead to serious repercussions that will ultimately adversely affect the performance of the subsidiaries (Harzing & Pinnington, 2010). From research, MNCs should adapt to the cultures of the societies that host their subsidiaries. The same research has revealed that those organizations that are managed with the expectations of the national cultures perform better than those subsidiaries that are not managed according to the expectations of the societies that host the subsidiaries (Harzing & Pinnington, 2010). In addition to the cultural values, the behavior of the people with positions and roles within an organization can present a constraint to the functions of the HRM and the operations of the organization as a whole (Harzing & Pinnington, 2010). Studies have been carried out to determine the impact the social forces have on the behavior and the structure of organizations. The researchers have argued that social institutions affect the practices of the companies, resulting into structures of the organizations that show the national patterns (Harzing & Pinnington, 2010). The research has shown that the institutional systems affect the...
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