Use with International Human Resource Management ISBN 1-84480013-X Published by Thomson Learning © Peter Dowling and Denice Welch 8/1 Chapter 8 HRM in the host country context Use with International Human Resource Management ISBN 1-84480013-X Published by Thomson Learning © Peter Dowling and Denice Welch 8/2 Chapter objectives • Factors that influence standardization or adaptation of work practices and the role of HR, including host- country culture and workplace environment, mode of operation, firm size, maturity and international experience and subsidiary mandate. (cont.) Discussion of international HRM issues generally tends to be biased in the direction of expatriate management, particularly that of parent-country nationals, partly owing to their strategic importance. In this chapter, we attempt to redress the balance by examining HRM issues in subsidiary operations. We cover the following aspects: Use with International Human Resource Management ISBN 1-84480013-X Published by Thomson Learning © Peter Dowling and Denice Welch 8/3 Chapter objectives (cont.) • Retaining, developing and retrenching local staff. • HR implications of language standardization: HCN selection, training and promotion on the basis of language skills. • Monitoring HR practices used by foreign subcontractors. Use with International Human Resource Management ISBN 1-84480013-X Published by Thomson Learning © Peter Dowling and Denice Welch 8/4 Subsidiary issues • Approach to subsidiary management a function of: – The nature of the relationship between units and ‘parent’ – The level of equity involved – Factors within host-country environments that facilitate or constrain the transfer of global management practices and business processes Use with International Human Resource Management ISBN 1-84480013-X Published by Thomson Learning © Peter Dowling and Denice Welch 8/5 Standardization of work practices • Depends on – Receptivity of local workforce to adhere to corporate norms of behaviour – Effectiveness of expatriates as agents of socialization – Whether localization is timely (not just prompted by cost considerations) – Appropriateness to the local environment Use with International Human Resource Management ISBN 1-84480013-X Published by Thomson Learning © Peter Dowling and Denice Welch 8/6 Factors influencing standardization • Host-country culture and workplace environment • Mode of operation involved • Size and maturity of the firm • Relative importance of the subsidiary Use with International Human Resource Management ISBN 1-84480013-X Published by Thomson Learning © Peter Dowling and Denice Welch 8/7 Host-country culture • Work behaviour is culturally determined • Whether corporate culture supersedes or supplants other ‘cultures’ is a subject of much debate • Often, what is meant by corporate culture translates into universal work behaviours – standardisation of work practices Use with International Human Resource Management ISBN 1-84480013-X Published by Thomson Learning © Peter Dowling and Denice Welch 8/8 Figure 8-1: The linkage between culture and behaviour Use with International Human Resource Management ISBN 1-84480013-X Published by Thomson Learning © Peter Dowling and Denice Welch 8/9 Mode of operation • Choice of mode of operation important in determining standardization of work practices • Ownership and control important factors – wholly owned subsidiaries provide greater opportunities for transferring work practices than in IJVs Use with International Human Resource Management ISBN 1-84480013-X Published by Thomson Learning © Peter Dowling and Denice Welch 8/10 Figure 8-2: Factors influencing standardization of work practices [...]... ISBN 1 -8 4 480 013-X Published by Thomson Learning © Peter Dowling and Denice Welch 8/ 17 Figure 8- 3 : HR implications of language standardization Use with International Human Resource Management ISBN 1 -8 4 480 013-X Published by Thomson Learning © Peter Dowling and Denice Welch 8/ 18 Figure 8- 4 : Shadow structure of KONE based on language Use with International Human Resource Management ISBN 1 -8 4 480 013-X Published... Human Resource Management ISBN 1 -8 4 480 013-X Published by Thomson Learning © Peter Dowling and Denice Welch 8/ 14 Developing staff • Investing in human capital • Providing training and career development can assist in retaining good local staff • A fair environment and good management practices play an important role in countries such as China Use with International Human Resource Management ISBN 1 -8 4 480 013-X... standardization • The size of the firm, maturity and international experience also important • Motorola in China a case in point: – Large size – Wealth of international experience – Management could draw on these aspects when entering China Use with International Human Resource Management ISBN 1 -8 4 480 013-X Published by Thomson Learning © Peter Dowling and Denice Welch 8/ 11 Subsidiary mandate • The position a subsidiary... 8/ 19 Monitoring host country subcontractors • Outsourcing activities to host-country subcontracting firms requires some monitoring of HR practices • Vocal groups have accused multinationals of condoning work practices that would not be permitted in their home countries Use with International Human Resource Management ISBN 1 -8 4 480 013-X Published by Thomson Learning © Peter Dowling and Denice Welch 8/ 20... outcomes (cont.) Use with International Human Resource Management ISBN 1 -8 4 480 013-X Published by Thomson Learning © Peter Dowling and Denice Welch 8/ 22 Chapter summary (cont.) – Mode of operation Managerial discretion to introduce its own practices is higher in wholly owned subsidiary operations than in IJVs Acquisitions may be constrained by the inherited workforce We also looked at management contracts... operations – such as plant closures and rationalization – that result in employee retrenchments at the subsidiary and in the home-country operations (cont.) Use with International Human Resource Management ISBN 1 -8 4 480 013-X Published by Thomson Learning © Peter Dowling and Denice Welch 8/ 24 Chapter summary (cont.) • The HR implications of language standardization The decision to use a corporate language – usually... regional staff, external agents such as local buyers and auditors (cont.) Use with International Human Resource Management ISBN 1 -8 4 480 013-X Published by Thomson Learning © Peter Dowling and Denice Welch 8/ 25 Chapter summary (cont.) It should be noted in conclusion that there is a wealth of literature covering comparative management and HR systems We drew a little on this literature to highlight general... intention to cover in detail specific host-country cultures and management practices as that is outside the scope of this book Our aim has been to raise issues relating to IHRM in the multinational context from the perspective of the subsidiary Use with International Human Resource Management ISBN 1 -8 4 480 013-X Published by Thomson Learning © Peter Dowling and Denice Welch 8/ 26 ... with International Human Resource Management ISBN 1 -8 4 480 013-X Published by Thomson Learning © Peter Dowling and Denice Welch 8/ 13 Retaining local staff • The paradox – ‘expense of cheap labour’ • Poaching of key subsidiary staff • Access to skilled labour as important as unit cost (eg attraction of India for the IT industry) • The amount and quality of training is an important consideration Use with International. .. initiatives are often not seen as relevant (corporate immune system) • Staff movements can assist here Use with International Human Resource Management ISBN 1 -8 4 480 013-X Published by Thomson Learning © Peter Dowling and Denice Welch 8/ 12 Global or local work practices? • Not a case of ‘either-or’ • As Huo et al conclude: “While the recruiting practices used in different countries are inching toward global . meetings – Availability for international assignments Use with International Human Resource Management ISBN 1 -8 4 480 013-X Published by Thomson Learning © Peter Dowling and Denice Welch 8/ 18 Figure 8- 3 : HR implications. of work practices Use with International Human Resource Management ISBN 1 -8 4 480 013-X Published by Thomson Learning © Peter Dowling and Denice Welch 8/ 8 Figure 8- 1 : The linkage between culture. with International Human Resource Management ISBN 1 -8 4 480 013-X Published by Thomson Learning © Peter Dowling and Denice Welch 8/ 1 Chapter 8 HRM in the host country context Use with International