Role of Cultural Factors in Shaping Human Resource Management

6912 WordsJul 1, 201328 Pages
Role of Cultural Factors in Shaping Human Resource Management Practices in the Multinational Corporations (MNCs) Operating in the Emerging Markets of South Asia ABM Abdullah*, Stephen Boyle** and Carmen Joham*** A number of studies have been conducted for addressing the issues related to cultural diversity of employees working for Multinational Corporations (MNCs) operating in South Asian countries. However, only a few of the studies have looked into the issues related to how culture plays a role in shaping key Human Resource(HR) practices such as: compensation policy, job security, training and development, selection and recruitment, decentralization and teamwork, and information…show more content…
It has been already been accepted both in domestic and international markets that employees can be an important source of competitive advantage for corporations (Peteraf, 1993). Therefore, it is critical that corporations adopt Human Resources Management (HRM) policies and practices that utilize the particular employees‟ potential to the fullest (Boxall & Purcell, 2000; Grant, 1996). Thorough recruitment and selection processes, effective compensation systems, extensive training and development activities, adequate job satisfaction and employment security all impact positively on the overall business and performance of a corporation. It has also been found that if HRM is linked to the overall business of a company, it may further enhance the performance of the company (Pfeffer, 1998). Moreover, due to the complexity of managing people from different socio-economic and cultural background, it is argued that the way global employees are managed will also have a significant impact on a firm‟s economic outcome (Bjorkman & Xiucheng, 2002). However, it has been noted that few organizations know how to manage HR effectively in a dynamic international environment because best practices in one context do not always translate to other contexts with differing socio-economic conditions and cultures (Chilton, 1993). Why Bangladesh and its Importance Most of the South Asian
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