Challenge- Competitiveness in Multinational Companies
In multinational corporations HRM has allusions for corporate success. Tichy (1988) notes the means to competitiveness in multinational companies is leadership and a ground-breaking set of HRM practices which allow organizational flexibility and adaptableness. Despite a fast increase in international organizations, previous information related to the development and implementation of HRM practice in international joint ventures is very limited (Cyr, 1995: 21).
Though HRM is known as important and deserving of attention, the sum of time spent on HR issues in international ventures relics small. The development of HRM policies as well as practices in international organizations prese...
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...nts special challenges for both managers and academics. HRM development and management is requisite not only within the venture, but across organizational limits between the venture and the parent firms as well. Intercompany relations between the parents and the venture are significant, but overlooked phenomenon that needs greater focus.
In terms of HR management in the foreign subsidiaries of MNEs, as an issue of practice and probably need, local HR managers that are almost always host-country nationals (HCNs). That is, these places do not lean to be filled with HR managers from the parent firm (though these subsidiaries are typically recognized through the efforts of parent-country managers and HR managers). The use of local HR managers as part of the subsidiary management team makes sense as the host-country workforce is usually hired locally and work rules and practices should fit local laws and traditions.
Host-country nationals are more expected to be effectual in the subsidiary HR position than are expatriate HR managers from the parent firm, although HR policy is often “dictated” from the parent-company headquarters. (Though, HR policy is usually – though not always – adapted to fit local law and custom. ) This centralization of HR policy can form problems with interface for host-country (subsidiary) managers – together with local HR managers – who will diverge in their orientations from the parent-country (HQ) HR managers (Bhagwati, 2004).