International HRM Strategies and Policies in MNCs

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10th Jun 2020 Business Assignment Reference this

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Demonstrate an awareness of the processes involved in constructing international HRM strategies and policies in MNCs

Globalization and financial free market economy are continually opening up fresh market possibilities and multinational corporations are continually expanding companies around the globe. Because markets have already saturated in most of the developed countries, MNCs now seek developing and emerging economies. Triple dissertation reiterated the market possibilities in developing nations further. With the development of MNCs in every corner of the globe, far from home nations, the connection between subsidiary-headquarters (HQ) studies is also gaining significance and momentum. The majority of scientists used four streams or perspectives, i.e. strategy-structure, headquarters-subsidiary relationship, subsidiary roles and subsidiary growth, to define HQ influences on subsidiary leadership. In line with past research, the current research attempted to concentrate only on three primary variables of influence that could have a important effect on HRM practices in the subsidiaries. Previous study also disclosed the impact of these dimensions on the practice of HRM subsidiaries. However, our research focuses more on altering the situation of subsidiaries and their connection to changes in HRM procedures. Furthermore, although MNCs focus on developing and emerging economies, study on these nations still appears to be very limited.

Internationally coordinated manufacturing systems promote the dissemination of inter-subsidiary technologies by defining and encouraging “best practices” in one portion of the company in other areas of the globe. A study of 150 Mexican affiliates of the U.S. multinational showed a positive correlation between parent company influences and subsidiary resource interdependencies for specific HR decisions, in particular recruitment and selection of higher-level managers. The interviews stated that the higher the dependency, the higher the influence exerted by the parent business and the higher its participation in human resource choices, in particular choices on the choice, compensation and advantages of important affiliate managers. Sometimes an inverse connection may exist when the parent business relies on the subsidiary to provide the required funds. Such vertically integrated production systems give headquarters the opportunity to follow common job organization and job procedures processes in distinct plants to implement standardized HRM procedures across subsidiaries.

‘HRM as practiced within one country’s geographic limits. It focuses on managing people in the context of a single country’.

Increased autonomy of polycentric orientation from HQs and subsidiaries is likely to be adapters of HR practices in the host country. Geocentric corporations are taking a more complex approach even though they remain fundamentally ethnocentric-innovative. They attempt to define worldwide best practices irrespective of nationality or nation of activities. Corporate HRM policy guidelines therefore have a direct influence on the subsidiaries behaviour. Although the HRM policy orientation headquarters provided useful guidelines for evaluating the transfer vs. adaptation process in the subsidiaries, it is hardly possible to find any multinationals that fit these guidelines in the subsidies perfectly.

The study goal of investigating the impact of corporate strategy, structure and HQ policy orientation on subsidiaries on HRM practices and their gradual modifications over time has driven us towards a qualitative approach of studies. Researchers asserted that while a quantitative research may define the incidence of distinct HRM practices on the subsidiaries real-time data, it would be less helpful to comprehend and clarify the process of growth and the evolving nature of HRM practices with historical and longitudinal retrospective data. This could be due to restricted capacity to explore the context as a whole by quantitative methods. In IB, where various actors and various environmental impacts are engaged, qualitative methods are appropriate. Considered quantitative research methods to be relatively weaker in providing rich and valid descriptions of HRM development processes and advocated in-depth qualitative case studies to flesh out the insights of MNCs HRM development processes. The case study method helps to understand decision-makers behaviour and to unravel historical processes involves a more complicated process where the entire process cannot be provided or explained by stand-alone opinion or simple information.

Standardization efforts vary between different categories of employees and depend on the nature and level of employment. The HR Director stated that technical jobs between subsidiaries are more homogeneous and that in the definition of job descriptions and job specification for these jobs, it is easier to follow the HQ requirements. HQ can more readily standardize technical employment and regulate hiring and choice procedures directly. However, subsidiaries may change some sensory employment on the local market, for example in marketing department staff, but they need to provide the company headquarters with an overview of those modifications. Specialized subsidiaries in distinct nations are now becoming a power centre for specific products and are trying to impact hiring and choice procedures by offering comprehensive work descriptions for distinct classifications of staff and by offering numerous sample of equipment in specific test materials for managers. The HR Director has denied any influence of the HQ on the design or determination of job descriptions and job specifications.

For a long time, subsidiaries have followed standardized HRM practices; recent changes to the corporate structure have increased parenting influence in the recruitment and selection of all subsidiaries. In creating work descriptions and requirements to the managing staff, the subsidiary uses the standardized method. The HQ and specialized subsidiary in Australia make direct contacts with the subsidiaries to monitor their recruitment and selection practices and request that the subsidiary submit a staff inventory of managers covering various qualifications and competences. In order to recruit the desired management staff, the presence of foreign experts has required the subsidizing company to respect standardized work descriptions and employment descriptions. The pressures to standardize the work descriptions, work descriptions, and other hiring and choice operations are related to the multinational headquarters ‘ monitoring and monitoring system. The HQ had little scope to influence the activities of the subsidiaries when the subsidiaries were managed with a multi-domestic orientation.

However, the establishment of a multi-domestic system was linked with the host-and home country’s institutional structure, and shifts in globalization and other internal variables led the parent business to modify its previous monitoring and monitoring processes as well as to move towards closer relations with the subsidiaries. A long assessment of the subsidiaries organizational orientations shows their altered effects in hiring and choice procedures, and promotes this reasoning in understanding the organizational HRM methods in the evolving global financial framework with internal variables.

The enhanced inclusion of the manufacturing of multinational subsidiaries has altered their position in the global manufacturing network and reduced the influence of the parent business on the distinct dimensions of hiring and choice operations. Increased the significance of subsidiaries in parent businesses and parent businesses are more worried about the HRM practice of subsidiaries with the degree of 10 multinationals i.e. the magnitude of their sales to overseas countries. Integration into the global manufacturing network improved the attention of the parent company with regard to HRM procedures of the subsidiary to guarantee the smooth flow of quality Bangladesh products. In latest years, the parent firm has also improved its influence on hiring and choice operations. The subsidiary is now receiving more attention than its Indian and Pakistani subsidiaries counterpart. Executives show that the company’s latest development has gained increased attention from the HQ and are now being subject to stricter checks on HRM problems by the parent firm.

It appears that the evolving function has served as a turning stage in affecting the recruitment of specific communities of staff, i.e. staff directly involved in the manufacturing and quality control process. The HR Director discusses the increasing significance of the method of quality control and the need for particular technical knowledge among manufacturing staff to guarantee the quality of the item for foreign markets. The isolated production process and the subsidiary’s exclusive local market orientation seem to discourage the parent from influencing the HRM practices of the subsidiary. Instead of researching fresh economies in overseas nations, the company was told to focus on the local industry and compete with national organizations. The parent business appears to be indifferent to the performance of the goods in Bangladesh and has no stake in securing any standardization of the abilities or abilities of employees.

The influence of the parent business and the standardization of the separate hiring and choice operations relied on the approach of the head office towards subsidiary HRM procedures as well as on the range of staff mobility between distinct subsidiaries. From the very start, headquarters pursued geocentric HRM strategies around the globe and attempted to standardize most HRM procedures in Bangladesh. The latest good implementation of electrode manufacturing as well as exports to overseas nations has further boosted the trust of the parent business and now lists the subsidiary as a resource for the recruitment of management staff for the entire group. No distinctive HRM model can be found, social institutions can still play some role in the recruitment and selection process in multinational subsidiaries.

  • G. Hofstede, Cultures & organizations: Software of the mind: Intercultural cooperation and its importance for survival, New York: McGraw-Hill, pp. 4, 1991

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