International Human Resrouce Management
Chapter 9: IHRM in the host-country context
Standardization and localization of HRM practices * Controlling cross-border operations of an MNE centres around what processes, routines, procedures and practices can be and should be transferred abroad. In the process of transferring systems and know-how the role of people is critical. * The aim of global standardization of HRM practices is to reach consistency, transparency and an alignment of geographically fragmented workforce around common principles and objectives * The aim of realizing local responsiveness is to respect local cultural values, traditions, legislation or other constraints such as government policy. Though attempting to implement methods and techniques that have worked in one country may be inappropriate for another. * The challenge of multinationals is to create a system that operates effectively in multiple countries by exploiting local differences and interdependencies and at the same time sustaining global consistency.
Factors driving standardization * Strategic issues – multinational firms operate in the context of worldwide conditions, including the external contexts of industry, nation, region, and inter-organisational networks and alliances. These factors not only impact on IHRM strategy and practice but also on MNE goals. * The organisational context – includes various organisational structures such as export and sales subsidiary to more complex varieties such as the matrix and heterarchy and their impact on HRM. Also the consideration of organisational culture. * Firm size – the impact of a firm’s size in relation to the important differences between HRM in SMEs and MNEs. Closely linked to the firm size is the degree of international experience.
Factors driving localization * The cultural environment – appropriate HRM practices can help support the cohesion between different units of the MNE. If HRM practices do not match local norms and values, they must be
Standardization and localization of HRM practices * Controlling cross-border operations of an MNE centres around what processes, routines, procedures and practices can be and should be transferred abroad. In the process of transferring systems and know-how the role of people is critical. * The aim of global standardization of HRM practices is to reach consistency, transparency and an alignment of geographically fragmented workforce around common principles and objectives * The aim of realizing local responsiveness is to respect local cultural values, traditions, legislation or other constraints such as government policy. Though attempting to implement methods and techniques that have worked in one country may be inappropriate for another. * The challenge of multinationals is to create a system that operates effectively in multiple countries by exploiting local differences and interdependencies and at the same time sustaining global consistency.
Factors driving standardization * Strategic issues – multinational firms operate in the context of worldwide conditions, including the external contexts of industry, nation, region, and inter-organisational networks and alliances. These factors not only impact on IHRM strategy and practice but also on MNE goals. * The organisational context – includes various organisational structures such as export and sales subsidiary to more complex varieties such as the matrix and heterarchy and their impact on HRM. Also the consideration of organisational culture. * Firm size – the impact of a firm’s size in relation to the important differences between HRM in SMEs and MNEs. Closely linked to the firm size is the degree of international experience.
Factors driving localization * The cultural environment – appropriate HRM practices can help support the cohesion between different units of the MNE. If HRM practices do not match local norms and values, they must be