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Human Resource Management in Multinational Companies: Cultural and Institutional Factors Restrict the Implementation of Policies and Practices Across the Companys Subsidiaries - Essay Example

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The researcher of this essay will make an earnest attempt to investigate the extent to which Human Resource Managers in Multinational companies are restricted by cultural and institutional factors in implementing policies and practices across their subsidiaries…
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Human Resource Management in Multinational Companies: Cultural and Institutional Factors Restrict the Implementation of Policies and Practices Across the Companys Subsidiaries
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"Human Resource Management in Multinational Companies: Cultural and Institutional Factors Restrict the Implementation of Policies and Practices Across the Companys Subsidiaries"

Download file to see previous pages This research will begin with the statement that in the contemporary global market, multinational companies (MNCs) are expanding from their home countries to establish subsidiaries at planned locations around the world. Strategic human resource management (HRM) practices are decisions and actions related to the management of employees at all levels in the business, to help the organization achieve sustained competitive advantage The human resource managers in multinational companies have to plan and implement consistent and aligned tactical practices, programmes and policies to achieve the organization’s intended objectives across all of the company’s subsidiaries. The implementation of these policies and practices is required to be within the parameters of the organization’s and its subsidiaries’ cultural and institutional factors. The organizational culture is the set of shared values, collective beliefs, and customary ways of thinking and doing things, which guide work practices of the employees and functioning and the organization. Besides organizational culture, the multinational company’s national culture of both home country and subsidiaries are taken into account, for improving organizational outcomes. National culture constitutes “values, beliefs, and assumptions learned in early childhood that distinguishes people in one society from those in another”. They are categorized in seven dimensions including “innovation, stability, respect for people, outcome orientation, detail orientation, team orientation, and aggressiveness”. While some companies have extremely strong cultures which are uncompromisingly fixed, and the subsidiaries have to make changes to adjust to the cultural elements of the main organization, the organizational cultures in other companies may be weak. Significantly, the transfer of practices is impacted by the compatibility of the organizational cultures of the two organizations involved in the alliance, as a part of the multinational company and its subsidiaries, or those firms undertaking a merger or acquisition. For example, research evidence indicates that “successful Japanese MNCs often choose to set up their subsidiaries in American rural areas” or areas which are less known. Besides seeking out less expensive areas, another reason for the choice of rural area is the conceptualization that the values of rural Americans and those of the Japanese would be more alike in terms of team orientation, outcome orientation, work values, and other important assessments. Consequently, this would make it easier for Japanese companies to transfer their home country human resource management practices to overseas subsidiaries, state Beechler and Yang. The similarity of two organizational cultures can influence the transfer of human resource management practices. All human resource management practices are based on some deep value assumptions. Compatibility between values inherent in certain human resource management practices, and the values underlying the culture of an organization, enables the subsidiary ...Download file to see next pagesRead More
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