Human resource management transfer challenges within multinational firms

Abstract

Purpose The paper aims to trace the challenges that multinational companies (MNCs) face as they grow out of their national borders into foreign countries and how they attempt to transfer human resource management (HRM) policies and practices across their subsidiaries for a best-fit HRM model. Design/methodology/approach The paper uses the dilemma theory (involving two opposing values which doing one without the other creates a disadvantage but both cannot be done together) as the main analytical tool and reviews scholarly literature on MNCs’ HRM transfers for the assessment of the transfer challenges. Findings It is found that MNCs face a dilemma as to how to find best-fit between home-country HRM requirements and host-country demands. In the face of this dilemma, MNCs attempt to build synergy between home-country requirements and host-country demands for a best-fit HRM that is beneficial to both the parent company and their foreign subsidiaries. Despite the best-fit HRM practices to diffuse the tension, parent company has greater influence in the final synergy product which is the trade-off between home-country HRM label and host-country contextual demands, thereby advancing the dominant HRM option of the dilemma. Practical implications MNCs should be aware of the possible challenges as they internationalise and should equally be aware that though they may build a synergy (a blend of workable headquarters and subsidiary HRM), the final product will continue to favour headquarters’ HRM policies and practices. Originality/value The paper generates theoretical implications into the issues and challenges that arise with HRM transfers within multinational firms by examining how the dilemma theory sheds light on the transfer process and challenges from the dominant-contextual tension till the fight for best-fit HRM. It also contributes to the development of cycle of cross-border HRM dilemma, cross-border HRM transfer framework and Synergy-Dominant theory.

South African MNCs’ HRM Systems and Practices at the Subsidiary Level: Insights From Subsidiaries in Nigeria

“…The study's findings revealed that several factors influenced the transfer methods used by the EMNCs' headquarters to transfer their HRM practices to their Nigerian subsidiaries. These factors included home country effects, such as the features of the industry sector, the companies' international structure and strategy, and the international experience and mindset of senior management (Oppong, 2018). Another factor was the host country effect, which included socio-cultural elements and institutional factors, such as the legal and economic environments and the education system.…”

“…Contrariwise, in systems where the inter-firm labour movement is broad and unconstrained by industrial relations, companies might be reluctant to assign substantial resources to train and develop their employees. Therefore, considerable variation in national systems between countries makes HRM practice transfer problematic (Oppong, 2018;Peng, 2016).…”

“…Companies could quickly transfer and implement country of origin workplace practices in an open subsidiary national business system. At the same time, the diffusion of the country of origin systems tends to be more restricted in a closed economy with business systems that are highly regulated (Deresky, 2017;Oppong, 2018;Vaiman & Brewster, 2015).…”

“…MNCs cannot pre-plan the hybridisation process. Thus, subsidiary HRM practices can resemble those of the parent company or host country; or they can be different from both (Jiang & Yahiaoui, 2019;Oppong, 2018).…”

“…Some were more profoundly culture-specific and might not always be transferable. Moreover, some practices were constituent of a coherent global strategy, a 'package', and could not be transferred effectively in isolation and without the rest of the package Oppong, 2018;Yahiaoui, 2014).…”