Examine Why Multinational Corporations Seek to Transfer Their Home-Country Human Resource Management Policies to Their Overseas Subsidiaries. Use Examples to Explain the Difficulties That Firms Might Encounter in the Transfer Process.

1247 WordsMay 1, 20135 Pages
The HRM policy of a firm is looked as a most important strength which needs to be taken care of all the time to have a competitive advantage within the industry they operating in. Multinational corporations (MNCs) seek to transfer their home-country human resource management (HRM) practices to their overseas subsidiary as to them it is just another approach towards globalisation. It can be an element of success for MNCs if they manage to transfer these HRM practices across their subsidiaries in an effective manner. An effective transition of these policies depends on the organisational, cultural, social and relational factors (Bartlett & Ghoshal 1998; Evans, Pucik & Barsoux 2002; Poedenphant 2002). The transition of these policies…show more content…
The whole procedure of international strategy is from adopting the policies implemented from the parent company to the enhancement of the competencies developed at the subsidiary, which will complement the organization on the whole. International experience is also one of the factors that push a MNC to implement the home-country HRM policies across their subsidiaries. It depends on how long a MNC has been active in their international operations that impact the nature of their decision while implementing HR policies across their subsidiaries. Having a lack of international experience, a MNC will make their subsidiaries adopt their home-country policies (The effect of corporate-level organisational factors on the transfer of human resource management practices: European and US MNCs and their Greek subsidiaries, Barbara Myloni,July 2006). A MNC with more international experience is less likely to adapt their home-country policies as the more a firm gains international experience, the less dominant their home-country HR policies become. Looking from the dependency theory’s point of view, the need for control also pushes a MNC to implement their home-based policies. The stronger the need is, the more the necessity of integrating these policies will grow, and hence there is a probability that the HR practice will resemble the home-country practices. The more dependent a subsidiary is to their parent, the more the firm will try

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