Cultural Implications of Transfer of Hr Practices in Mncs

This report examines cultural and institutional factors of Mexico and how they can impact global HR management and practices. Specifically, by analyzing Mexican culture based on Hofstede’s dimensions, economy, labor legislation, union and employment tradition we reached the conclusion that the features of Mexican culture (high power distance, strong collectivism, high level of masculinity and uncertainty avoidance) and institutional factors have a strong impact on management styles and HR practices of business in Mexico and may arouse some challenges for global company and their expatriates, especially those from countries that bear different cultural features and institutional conditions. In order to minimize the potential conflict between Mexican local employees and expatriates, parent companies need to provide trainings (culture assimilation, country condition, etc.) before sending anybody to Mexico. Also, whether the expatriates should put more effort to disseminate home country (headquarter) culture or to adjust to local culture depends on the company’s strategy in terms of being localized or standardized around the globe.

The HRM policy of a firm is looked as a most important strength which needs to be taken care of all the time to have a competitive advantage within the industry they operating in. Multinational corporations (MNCs) seek to transfer their home-country human resource management (HRM) practices to their overseas subsidiary as to them it is just another approach towards globalisation. It can be an element of success for MNCs if they manage to transfer these HRM practices across their subsidiaries in an effective manner. An effective transition of these policies depends on the organisational, cultural, social and relational factors (Bartlett & Ghoshal 1998; Evans, Pucik & Barsoux 2002; Poedenphant 2002). The transition of these policies

Corporate values and culture is the guide for employees to advance in pro of the organization common mission. Even though that values and culture are interlinked they are not the same. However, they work jointly to pursue the similar outcome. The culture of the organization should be the representation of the main values. Usually values are created from the upper management and culture will grow with the actions of the people in the organization (Kotter, 1992). In order to control these actions the organization must control the process of communicating and fortifying the values. If this

Managing HR in MNC is different from the way the HR is being managed in the country, According to Morgan (1986) there are three factors that differentiate between IHRM and domestic HR: First, the countries of operations such as the -country where a subsidiary may be located, the host-country where the subsidiaries are located, and other countries. Second, the different types of employee, in international environment the HR management have to deal with the host-country nationals (HCNs), expatriates or home-country nationals (PCNs) and third country nationals (TCNs), for example if L’Oreal hired an Indonesian employee in their Indonesian subsidiary the employee is a HCNs, and when manager from L’Oreal Headquarter in France came to work in Indonesian subsidiary the manager is a PCNs, and if L’Oreal employs manager neither from Indonesia nor France to work in their Indonesian subsidiary the manager is TCNs. Third, is the way HR practices (eg. staffing, compensation, training, and etc) are conducted. Although IHR practices seems to have the same activities as domestic HR, in IHR the manager will be dealing with different environment and diversity of employees from different cultural background. Moreover, as mentioned earlier dissimilarities between domestic and international HR management mostly due to profound differences between host and home countries in term of culture,

Increased business globalization, emergence of new economic hubs like BRIC countries (Brazil, Russia, India and China) as well as more intense competition among organizations at the domestic and international level alike over the past two decades, have necessitated the need for studies in the comparative Human Resource Management (HRM) (Budhwar & Sparrow, 2002a). As a result, a growing number of conceptual (Aycan, 2005; Edwards & Kuruvilla, 2005) and empirical studies (Bae, Chen, & Lawler, 1998; Budhwar & Sparrow, 2002b; Easterby-Smith, Malina, & Yuan, 1995) have addressed the configuration of HRM in different

Values refer to the second level of the organizational culture. It refers to ones beliefs as to what should be done and what should not be done. It refers to those principles and qualities which shape our thinking process and behavior. Values can be divided into instrumental values and terminal values. Values are usually emotionally charged and learned during our life especially through the process of socialization through the environment, family , friends etc.

National companies do not become global companies immediately. Involvement in international HRM depends greatly on a company 's phase of globalization. Import-export firms. Firms in the first phase of globalization simply move products across national boundaries. The firm does not employ people in other countries, except a few managers responsible for negotiating business agreements. These agreements usually involve buying or selling complete products or services. Import-export firms need to understand their trading partners ' cultures and usually must overcome communication barriers to negotiate agreements. Negotiations are usually done by expatriate representatives, but expatriates are not employed as extensively by import-export firms as by multinational enterprises. HR policies and practices remain relatively unchanged from the company 's traditional home-base practices. (HR Magazine,06-01-1995)

Schuler and Rogocsky (1998, p.10) suggested, "that national culture provides an important explanation for the variance in the utilisation of different compensation practices in different countries". This example shows the strong bond between national culture and his impact on HR practices and HRM. The apply of specific HR practices and HRM policy has to fit the cultural values to be effective in the work environment. Considering this fact, national values have a real impact on HRM that means national variations can influence HRM policy of a company in the global economy. Considering the current economy, national variations can offer particular advantages or disadvantages. The impact of national variations can appear in four main areas of HRM which are human resources practices, management and bargaining with trade unions, level of state involvement in the labour world, management of relationships between employees and managers. A national value turns into a disadvantage when this value does not fit with the global economy. On the opposite, if the national value fits with the economy it can be an advantage for HRM and the business strategy of the company. A national variation between two countries becomes an advantage or disadvantage when it promotes or prevents the adaptation of the HRM policy of the company to the current economy. HR practices are in some extent adapted to national variations in order to fit employees needs. Schuler and

Brian C. Satterlee (2014) discuss, “Culture is the set of shared attitudes, values goals, and practices that characterized a society, or in the business sense, an organization” (p.42). The definition of Cultural values in the Cultural values Business Dictionary (2015) lists, Cultural values are commonly held standards of what is either acceptable, unacceptable or the opposite of both. Also, an organization can be described as a group of people that interact with each other to “perform essential functions that help attain goals” (Daft, 2013, p. 12). Combine these three underlying concepts combine the cultural values of an organization.

Nowadays, with the increased level of globalization and advance in technology, new markets and international business have grown dramatically in the whole world. As a consequence, firms are now experiencing fierce competition at both national and international level. Under this circumstance, today’s HR practitioners are encountering several strategic challenges when operating in multinational and transnational

Von (Von Glinow & Teagarden, 1988) proposed the transfer of western HRM to the joint ventures active in China. The compensation structure reforms (Shenkar & Chow, 1989) and reforms related to the education system especially management and training were assessed (Warner, 1986; Borgonjon & Vanhonacker, 1994) when the reforms were taking place; and how the policies of Chinese state planning impacted the overall staffing practices was assessed by Holton (Holton 1990). Many scholars were forecasting and depicting regarding the future of HRM as what will

It may not be feasible to generalize HRM practices across multiple countries because of their cultures, policies, laws and practices. Conversely, the varied cultures may affect on how HR policies across geographies are implemented.

The role of HRM in Indian organizations has evolved as time passed by to sustain in today’s highly competitive world. The general functions of HRM are as follows

Under the increasing globalization, organizations have to deal with new challenges in order to maintain sustainable competitive and become accustomed to the changing global market. The developing globalization has promoted companies establish their organizations across different countries and expanded new business in multicultural environment. Culture seems to be a key factor of the relationship, interaction and communication between people from different countries when companies become multinational. Expatriation is regarded as an important part of international human resource management (IHRM) in multinational companies (MNCs). A range of research has showed that expatriation is an essential area of international

At present then, the contribution of HRM in improving a firm’s performance and in the overall success of any organisation (alongside other factors) is being highlighted in the literature (see e.g. Guest, 1997; Schuler and Jackson, 2005; 2007).