GHRM - TN 9i IHRM in Host-Country Context (L n S)

GHRM - TN 9i IHRM in Host-Country Context (L n S) - Chapter...

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IHRM in the host-country context Chapter 9
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Standardization drivers are MNE strategy and structure, maturity and age, and corporate culture Localization drivers are the host country’s cultural and institutional environment, the mode of operation and subsidiary role Outline measures which support the development of a balance of globalization and the localization of HRM Address the global code of conduct as a device for controlling employee behavior worldwide Focus on the strategic importance of offshoring Chapter Objectives We discuss drivers shaping interplay between global standardization and the localization of HR practices in MN context: Then we:
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Balance between standardization and localization pressures varies, depending on MNEs. MNEs develop integrative HR practices (by sharing best practices from all parts of the firm) to create a worldwide system (that strive for consistency and to gain efficiencies of scale and scope across several different countries). At the same time, each overseas affiliate has to recognize and to develop HR practices that are appropriate for their local markets, employment laws and cultural traditions in order to offer local advantages. Introduction: “Think Global, Act Local”
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The aim of standardization of HRM practices is to reach the consistency, transparency and an alignment of a geographically fragmented workforce around common principles and objectives. The aim of localization of HRM practices is to respect local cultural values, traditions, legislation or other international constraints such as government policy and education systems regarding HRM and work practices. Thus, the challenge of MNEs is to create a system that operate effectively in multiple countries by exploiting local differences and interdependencies and at the same time sustaining global consistency. But, lingering ethnocentrism is still evident in big MNEs. Standardization & localization of HRM practices
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The balance of a firm’s HRM standardization and localization choice is based on factors of influence such as strategy, structure, corporate culture, and MNE size and maturity on the standardization. MNEs pursue a multinational corporate strategy supported by a corresponding organizational structure that is reinforced by a shared worldwide corporate culture. The cultural and institutional environment in the host countries including subsidiary role and its operation mode play an important role on the localization side. Factors driving standardization
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Organizational context Strategy and structure Mode of operation involved Size and maturity of the firm Relative importance of the subsidiary » E.g., Motorola, Schering AG HC culture and workplace environment China vs. USA Factors Driving Standardization
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Choice of HRM strategies Internationalization Strategy Ethnocentric, global strategy : • control is centralised • subsidiaries resemble the parent company Polycentric, multi-domestic strategy :
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