HRM 2 / TRANSFER OF HR MANAGEMENT PRACTICES
The transfer of Human Resource (HR) Management practices across national boundaries has become a key strategy for multinational companies to achieve competitive advantage in global markets. The 2 articles bring teaching methods on the conditions of application and of transferability ofthese practices.
Today, for many strategic or marketing reasons, companies are internationalizing their activity. Moreover, during the last decades, companies have been dealing with an increasingly competitive environment. Factors facilitating the globalisation, such as the liberalization of international trade, the international integration of production, etc have enabled companies to investoverseas in order to gain competitive advantage.
In this context, HRM could be seen as part of the overall strategy of the firm and an emerging source of competitive advantage. Furthermore, values and HR system might help to shape the organizational culture and the people who operate within and influence that culture. On the other hand it is assumed that HRM constitutes a major constraint inimplementing global strategies, because of the complexities involved in employing and managing people from disparate national and cultural background.
Nevertheless, the transfer of HRM practices to overseas subsidiaries is limited by differences in national cultural and institutional characteristics, which might force MNCs to localize their HRM practices. So, this internationalising processincludes the partial or integral transfer of their know -how including and generally their HRM practices.
HRM practices represent the policies, procedures, systems and activities used to shape, monitor, and direct attention of people within the organization. Several frameworks have been developed in the strategic human resource management literature to classify HRM practices, where five majordomains may be identified:
* Organizational planning
Often communication with employees is considered as an additional domain. We believe communication – the practices of sharing information with employees – should accompany all five previous mentioned domains.
The question of transferability of management practices stillremains paramount in the minds of international managers. So what are the conditions of transfer of HR practices from a headquarter to a subsidiary abroad? Are there universal best HRM practices or only situation-specific best practices? Does HRM effectiveness vary with business strategy, national culture or subculture, or the firm’s external environment? What are the factors of transfer?
1. Thereasons for MNCs to transfer HR practices
An MNC can be considered as a network of resource transactions among subsidiaries located in different countries. The main reasons for MNCs to transfer their HR practices are the international competition pressure, the international integration and strategies, and the organizational politics.
* The international competition pressure
Competitionin a global economy on the basis of competitive advantages is the incentive for MNCs to transfer and recombine new knowledge and practices across borders (Taylor et al, 1996). Organizations often engage in cross-unit transfers of business practices that reflect their core competencies and superior knowledge and that they believe to be a source of competitive advantage (Kostova, 1999). HR policiesand practices are often considered by top management to be one of those sources. We have to distinguish both national and organizational contexts. Also, transfers of HR practices can occur in various directions within the MNC, including transfers from parent companies to foreign subsidiaries, from subsidiaries to parent companies, or from one subsidiary to another.
* The international...