Role of Culture in Shaping HRM Practices of MNCs - Dissertation Example

Besides, the social and political changes also influence the cultural norms in a country, which in turn impacts the labour market and policies. China has been the focus of expansion for many MNCs because of its vast geographical area and because of cheap labour. Japan has been operating in China since the mid-1990s but has not been able to transfer its HRM policies to China. With the motivation to evaluate the degree to which Japanese MNCs had to adapt the HR practices in local cultural environments in Chinese subsidiaries, this study was undertaken.

Three objectives were set in Chapter, and based on a qualitative study, the objectives have been achieved. The study finds that factors that impact HR practices across cultures depend upon the push factors (from the home country) and the pull factors (of the host country). An MNC may attempt to control its subsidiaries and impose its own corporate culture, work values and HRM policies, but the host country business environment may not be conducive to accepting it. MNCs tend to demonstrate the COO effect when they desire to transfer their HRM practices overseas, but they are not always successful.

The Japanese MNCs are known to exercise control and coordination mechanisms through the use of expatriates in all its subsidiaries, but despite this, they have been compelled to conform to local norms. The employment and training patterns in Japan too have not been emulated in China. The Japanese still believe in lifetime employment, but the Chinese employment patterns have changed. The subsidiaries go by merit and do not give credence to the employment tenure or seniority. Another area where Japan has not been able to transfer its HRM policy is in the field of training, where organizational behaviour and work values are given importance, contrary to the situation prevalent in China.

The Japanese MNCs have had to mostly accept the local norms and work values of the Chinese business environment. They have had to conform to local isomorphism. They have not succeeded in the transfer of HRM practices through mission charters or through management education. They have been relying on the ex-pat managers for control and coordination, but they have not been able to impose their home country HRM policies on their subsidiaries in China. The study highlights the limitations, and based on the limitations, areas for further research have been recommended. Internationalization and globalization have urged companies to seek opportunities across national borders. Globalization has broadened the mindsets of executives as they seek to extend the geographical reach of their firms.  However, one of the greatest challenges in international management is the application of theories and models developed in one part of the world and its application in another part of the world.