impact of transfer of hrm practices from one country setting to other

8/9/2019 Impact of transfer of HRM practices from one country setting to other

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Impact of transfer of HRM practices from one country setting to other

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Khadija Abbas 11-114

Fakhar 11-118Humaira Basheer 11-120Sabir Ali 11-121M.Shoaib 11-116Wajiha a!eed 11-11"

Saeed #$bal 11-11% Ali hussa& 11-122Som''ha (issa 11-117

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Review of HR Human resource management (HRM , or simplyHR ) is a function in organizations designed to

maximize employee performance in service of theiremployer’s strategic objectives.

This means acquiring,developing,retaining andsupporting staff as ell as ensuring they fulfill theirrole at or!.

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Ancient Instances"#$ is a concept that has been utilized since human

beings started follo ing an organized ay of life.%eorge &lton $ayo as credited for "# relationmovement."# is a product of that movement.The first (recorded) department of "#$ is in ' ' in*merica.

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"#$ practices hich ere used in prehistoric timesare+

$ythological events.

electing tribal leaders.afety, health, hunting and gathering.

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Present Scenario There are four primary objectives of "#

-btain. evelop. $aintain. #etain.

The role of "# professionals no a days is more complexthan other roles and also more impactful than other

business roles.

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Importance of HRM/uality of an organization, to a large degree

dependent upon the quality of people it hires and!eeps.0ithout people a company is only an idea.The business orld is changing at bullet train speedtechnology, global economy, increasing regulatoryscrutiny, looming talent crises and increasing mentalillness dramatically effecting or!place.

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War for talent +

The most important corporate resource over next 1years ill be talent+ smart, sophisticated business

people, ho are technologically literate andoperationally agile.

2ounger or!ers no the bosses of older or!ers.2ou need to dig deep into organization to identifythe organization top talent

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HRM Practices 3erformance *ppraisal#e ard ystem#ecruitmentelection&mployment security Training and development #eduction in status differenceharing information4abor relations

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Why MNCs want to work acrossborders*vailability of ra material

!illed or!force4o age rate3otential mar!et

3rofit margin%ovt. support#elief on custom duty and tariffs

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&stablish an international corporate image

To expand business beyond the boundaries.*vail of competitive advantage internationally.5apture foreign mar!et against internationalcompetitors .$a!e best use of technological advantages by settingthe production facilities abroad.

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What actually MNCs transferacross borders

$ultinational companies are a po erful vehicle fortransfer of managerial and technical !no ledge, asell as capital and other production functions acrossnations.

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Transfer of HRM

practices

* blend of practices has been adopted by thesubsidiaries, ranging from emulating home country

practices, adapting host country practices, and amelange of home and host country practices.

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ome practices can be transferred across nations

almost ithout any change from one country toanother.ome must be modified to become or!able in

another setting.ome are more deeply culture6specific and may not

al ays be transferable.

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Can practices imitable?5an organizations located in idely diverse countrieslearn from one another, given the culture6specific

nature of much of management policies and practices75ulturalist approach8niversalist approach

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Strategies to transfer MNCs across borders

"#$ in a foreign subsidiary is a complicated matter.

The choice bet een one of three major options, polycentric, ethnocentric, and global, advocated bymany scholars, is found to be too simplistic a modelfor understanding hat actually goes on in a

subsidiary and bet een it and its parent organization.

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Three strategic "#$ options• 3olycentric (implement practices of host country)• &thnocentric ( implement similar practices in its

foreign subsi iary)• %lobal ( uni!ersal company-"i e practices) #c$onal %s &'# strategy( no matter "here in

the "orl&.g. 95# undee

-ne of the best "#$ practices of 95# undee, one ofthe most successful companies in the international mar!et.

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5hoice of "#$ strategy depends also on ho theforeign subsidiary is set up.

%reen field site(un exploited site)The expatriate managers

(do hat they actually ant to do, they belong to thehome country):n a green field site, the expatriate managers havemore room to exercise their choice

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0here multinational impose its home6gro n "#$

policies and practices on a subsidiary and here it not77

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actors in!uencing

transfer There are three sets of factors hich influence

hether or not a multinational ishes to and cantransfer it home6country human resource management practices to its subsidiaries7"ome country"ost country5ompany itself

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HRM "ractices #ndCulture

Culture *cquired !no ledge that people use to interpret experience and

generate social behavior. This !no ledge forms values, createsattitudes, and influences behavior.

Culture dimension:nclude the family, educational, economic, and the political andlegal systems5losely lin!ed ith national and business culture

"#$ is strongly influenced by;4ocal cultureocial norms4ocal beliefs and practices

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$ultinational companies’ management practices aremore prone to local cultural influences than are their

overall policies and strategies$oreover, some of the practices hich the companyhad imported from abroad had to be modified to ma!ethem or!able, given its local cultural and non6

cultural contexts. These local contexts had at the same time affectedthe relationship bet een the subsidiary and its parentcompany.

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How Culture Affects Managerial ApproachesCentralized vs. ecentralized ecision Ma!ing +

:n some societies, top managers ma!e all important

organizational decisions.:n others, these decisions are diffused throughoutthe enterprise, and middle6 and lo er6levelmanagers actively participate in, and ma!e, !eydecisions.

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Individual vs. $roup Rewards#:n some countries, personnel ho do outstanding

or! are given individual re ards in the form of bonuses and commissions.:n others, cultural norms require group re ards,and individual re ards are fro ned upon.

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Informal Procedures vs. %ormal Procedures#:n some societies, much is accomplished through

informal means.:n others, formal procedures are set forth andfollo ed rigidly.

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High &rganizational 'o"alt" vs. 'ow&rganizational 'o"alt"

:n some societies, people identify very stronglyith their organization or employer.:n others, people identify ith their occupationalgroup, such as engineer or pilot.

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Cooperation vs. Competitionome societies encourage cooperation bet een

their people.-thers encourage competition bet een their

people.

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Short(term vs. 'ong(term Horizonsome culture focus most heavily on short6term

horizons, such as short6range goals of profit andefficiency.-thers are more interested in long6range goals,such as mar!et share and technologicdevelopments.

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Sta)ilit" vs. InnovationThe culture of some countries encourages stability

and resistance to change.The culture of others puts high value on innovationand change

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$icultural #udit*rtifacts in -rganizational 5ulture

(-bservable symbols and signs of culture 3hysicalstructures, ceremonies, language, stories)$aintain and transmit organization’s culture

9ot easy to decipher artifacts 66 need many of them

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$icultural auditStrong cultures e*ist when#most employees understand


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Impact of culture3o er distance(lo and high)

8ncertainty avoidance(lo and high)$asculinity versus =emininity(harsh >s soft)8niversalism vs. 3articularism:ndividualism vs. 5ommunitarianism*eutral !s +motional

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pecific vs. iffuse

*chievement vs. *scription:nner6directed >s -uter6directedequential >s ynchronous

3resent vs. =uture

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"ower distance ,4ess po erful members accept that po er is distributedunequally

High power distance countries +e.g., $exico, outh ?orea, :ndia'ow power distance countries +e.g., *ustralia , =inland, :reland

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%ncertainty

a&oidance , people feel threatened by ambiguous situations;create beliefs


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Masculine &s' feminineominant social values are success, money, and thingsHigh masculine countries + advancement,

challenge, ealth; high job stress (e.g., %ermany)High feminine countries# friendl" atmosphere.,employment security, group decision ma!ing; lo

job stress (e.g., 9or ay)

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+niversalism vs. Particularism

+niversalism + ideas


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Individualism vs. Communitarianism

Individualism# people as individuals5ountries ith high individualism+ stress personal

and individual matters; assume great personalresponsibility (e.g., 5anada, Thailand, 8. ., @apan)5ommunitarianism+ people regard selves as part ofgroup

>alue group6related issues; committee decisions; joint responsibility (e.g., $alaysia, ?orea)

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Neutral &s' +motional

,eutral + culture in hich emotions not sho n"igh neutral countries, people act stoically and

maintain composure (e.g., @apan and 8.?.)-motional + &motions are expressed openly andnaturally

"igh emotion cultures+ people smile a lot, tal!loudly, greet each other ith enthusiasm (e.g.,$exico, 9etherlands, itzerland)

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#chie&ement &s' #scription

Achievement culture+ status based on ho ell perform functions (*ustralia, itzerland, 8. .)

Ascription culture+ status based on ho or hat person is (e.g., *merica , 5hina, :ndonesia)

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TimeSe uential# only one activity at a time;appointments !ept strictly, follo plans as laid out(8. .)S"nchronous + multi6tas!, appointments areapproximate, schedules subordinate to relationships(e.g., =rance, $exico)Present vs. %uture +

%uture more important (:taly, 8. ., %ermany)Present more important (>enezuela, :ndonesia

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Managing multi(cultural initiatives help anorganization !eep a competitive HR advantagethrough/:mproved corporate culture.:mproved employee morale and high retention ofemployees.

&nabling organization to move into the emergingmar!ets.ecreased interpersonal conflict among employees.

:ncreased productivity, innovation and brand identity. 45


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Sum up* common mista!e+ overloo!ing the local groundrealities under the unconscious bias of their parentcorporate culture policies and practices.

3eople management in 3a!istan or any other alienoverseas operation cannot be successful managed in

any other A @apaneseB or A *mericanB or A *rabB or A&uropean ayB.

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"# policies, system and practices based on culture

and the core values of the parent company may ormay not or! in other country context.

?ey to success lies in embracing flexibilityunderstanding acceptance, respect and adaptability tothe local ground realities.

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impact of transfer of hrm practices from one country setting to other

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