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Impact of transfer of HRM practices from one country setting to other

Khadija Abbas
Fakhar
Humaira Basheer
Sabir Ali
M.Shoaib
Wajiha Javeed
Saeed Iqbal
Ali hussan
Somyyha Eissa

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Review of HR
Human resource management (HRM, or simply

HR) is a function in organizations designed to


maximize employee performance in service of their
employers strategic objectives.
This

means acquiring,developing,retaining and


supporting staff as well as ensuring they fulfill their
role at work.

Ancient Instances
HRM is a concept that has been utilized since human

beings started following an organized way of life.


George Elton Mayo was credited for HR relation
movement.HR is a product of that movement.
The first (recorded) department of HRM is in 1901 in
America.

HRM practices which were used in prehistoric times


are:
Mythological events.
Selecting tribal leaders.
Safety, health, hunting and gathering.

Present Scenario
There are four primary objectives of HR
Obtain.
Develop.
Maintain.
Retain.
The role of HR professionals now a days is more complex
than other roles and also more impactful than other
business roles.
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Importance of HRM
Quality

of an organization, to a large degree


dependent upon the quality of people it hires and
keeps.
Without people a company is only an idea.
The business world is changing at bullet train speed
technology, global economy, increasing regulatory
scrutiny, looming talent crises and increasing mental
illness dramatically effecting workplace.
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War for talent:

The most important corporate resource over next 20


years will be talent: smart, sophisticated business
people, who are technologically literate and
operationally agile.
Younger workers now the bosses of older workers.
You need to dig deep into organization to identify
the organization top talent
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HRM Practices

Performance Appraisal
Reward System
Recruitment
Selection
Employment security
Training and development
Reduction in status difference
Sharing information
Labor relations
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Why MNCs want to work across


borders
Availability of raw material
Skilled workforce
Low wage rate
Potential market
Profit margin
Govt. support
Relief on custom duty and tariffs
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Establish an international corporate image


To expand business beyond the boundaries.
Avail of competitive advantage internationally.
Capture foreign market against international

competitors .
Make best use of technological advantages by setting
the production facilities abroad.
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What actually MNCs transfer


across borders
Multinational companies are a powerful vehicle for

transfer of managerial and technical knowledge, as


well as capital and other production functions across
nations.

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Transfer of HRM
practices
A blend of practices has been adopted by the

subsidiaries, ranging from emulating home country


practices, adapting host country practices, and a
melange of home and host country practices.

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Some practices can be transferred across nations

almost without any change from one country to


another.
Some must be modified to become workable in
another setting.
Some are more deeply culture-specific and may not
always be transferable.

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Can practices imitable?


Can organizations located in widely diverse countries

learn from one another, given the culture-specific


nature of much of management policies and practices?
Culturalist approach
Universalist approach

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Strategies to transfer MNCs across borders

HRM in a foreign subsidiary is a complicated matter.

The choice between one of three major options,


polycentric, ethnocentric, and global, advocated by
many scholars, is found to be too simplistic a model
for understanding what actually goes on in a
subsidiary and between it and its parent organization.

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Three strategic HRM options


Polycentric (implement practices of host country)
Ethnocentric ( implement similar practices in its
foreign subsidiary)
Global (universal company-wide practices)
McDonalds HRM strategy, no matter where in
the world.
E.g. NCR Dundee
One of the best HRM practices of NCR Dundee, one of
the most successful companies in the international market.
(low employee turnover over its fifty years of history)
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Choice of HRM strategy depends also on how the


foreign subsidiary is set up.
Green field site(un exploited site)
The expatriate managers
(do what they actually want to do, they belong to the
home country)
In a green field site, the expatriate managers have
more room to exercise their choice.
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Where multinational impose its home-grown HRM


policies and practices on a subsidiary and where it not??

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Factors influencing
transfer
There are three sets of factors which influence
whether or not a multinational wishes to and can
transfer it home-country human resource management
practices to its subsidiaries?
Home country
Host country
Company itself

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HRM Practices And


Culture
Culture
Acquired knowledge that people use to interpret experience and
generate social behavior. This knowledge forms values, creates
attitudes, and influences behavior.
Culture dimension
Include the family, educational, economic, and the political and
legal systems
Closely linked with national and business culture
HRM is strongly influenced by;
Local culture
Social norms
Local beliefs and practices
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Multinational companies management practices are

more prone to local cultural influences than are their


overall policies and strategies
Moreover, some of the practices which the company
had imported from abroad had to be modified to make
them workable, given its local cultural and noncultural contexts.
These local contexts had at the same time affected
the relationship between the subsidiary and its parent
company.
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How Culture Affects Managerial Approaches


Centralized vs. Decentralized Decision Making:
In some societies, top managers make all important

organizational decisions.
In others, these decisions are diffused throughout
the enterprise, and middle- and lower-level
managers actively participate in, and make, key
decisions.

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Safety vs. Risk:


In some societies, organizational decision makers

are risk averse and have great difficulty with


conditions of uncertainty.
In others, risk taking is encouraged, and decision
making under uncertainty is common.

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Individual vs. Group Rewards:


In some countries, personnel who do outstanding

work are given individual rewards in the form of


bonuses and commissions.
In others, cultural norms require group rewards,
and individual rewards are frowned upon.

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Informal Procedures vs. Formal Procedures:


In some societies, much is accomplished through

informal means.
In others, formal procedures are set forth and
followed rigidly.

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High Organizational Loyalty vs. Low

Organizational Loyalty
In some societies, people identify very strongly
with their organization or employer.
In others, people identify with their occupational
group, such as engineer or pilot.

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Cooperation vs. Competition


Some societies encourage cooperation between

their people.
Others encourage competition between their
people.

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Short-term vs. Long-term Horizons


Some culture focus most heavily on short-term

horizons, such as short-range goals of profit and


efficiency.
Others are more interested in long-range goals,
such as market share and technologic
developments.

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Stability vs. Innovation


The culture of some countries encourages stability

and resistance to change.


The culture of others puts high value on innovation
and change

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Bicultural Audit
Artifacts in Organizational Culture

(Observable symbols and signs of culture Physical


structures, ceremonies, language, stories)
Maintain and transmit organizations culture
Not easy to decipher artifacts -- need many of them

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Bicultural audit
Strong cultures exist when:
most employees understand/embrace the dominant
values
values and assumptions are institutionalized
through well-established artifacts
culture is long lasting -- often traced back to
founder

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Impact of culture
Power distance(low and high)
Uncertainty avoidance(low and high)
Masculinity versus Femininity(harsh Vs soft)
Universalism vs. Particularism
Individualism vs. Communitarianism
Neutral vs. Emotional

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Specific vs. Diffuse


Achievement vs. Ascription
Inner-directed Vs Outer-directed
Sequential Vs Synchronous
Present vs. Future

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Power distance:
Less powerful members accept that power is distributed

unequally

High power distance countries:

e.g., Mexico, South Korea, India


Low power distance countries:
e.g., Australia , Finland, Ireland

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Uncertainty
avoidance:
people feel threatened by ambiguous situations;

create beliefs/institutions to avoid such situations

High uncertainty avoidance countries: structure

organizational activities, less managerial risk taking


(e.g., Germany, Japan, Spain)
Low uncertainty avoidance countries fewer
written rules, more managerial risk taking, higher
employee turnover, more ambitious employees
(e.g., Denmark and America)

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Masculine vs. feminine


Dominant social values are success, money, and things
High
masculine
countries:
advancement,
challenge, wealth; high job stress (e.g., Germany)
High feminine countries: friendly atmosphere.,
employment security, group decision making; low
job stress (e.g., Norway)

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Universalism vs. Particularism


Universalism: ideas/practices can be applied
everywhere
High universalism countries: formal rules, close
adhere to business contracts (e.g., Canada, U.S.,
Netherlands, Hong Kong)
Particularism: circumstances dictate how
ideas/practices apply; high Particularism countries
often modify contracts (e.g., China, South Korea)
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Individualism vs. Communitarianism


Individualism: people as individuals
Countries with high individualism: stress personal

and individual matters; assume great personal


responsibility (e.g., Canada, Thailand, U.S., Japan)
Communitarianism: people regard selves as part of
group
Value group-related issues; committee decisions;
joint responsibility (e.g., Malaysia, Korea)

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Specific vs. Diffuse


Specific: large public space shared with others and

small private space guarded closely


High specific cultures: people open, extroverted;
strong separation work and personal life (e.g.,
Australia , U.K., U.S.)
Diffuse: public and private spaces similar size,
public space guarded because shared with private
space; people indirect and introverted, work/private
life closely linked (e.g., China, Spain)
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Neutral vs. Emotional


Neutral: culture in which emotions not shown
High neutral countries, people act stoically and

maintain composure (e.g., Japan and U.K.)


Emotional: Emotions are expressed openly and
naturally
High emotion cultures: people smile a lot, talk
loudly, greet each other with enthusiasm (e.g.,
Mexico, Netherlands, Switzerland)

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Achievement vs. Ascription

Achievement culture: status based on how well

perform functions (Australia, Switzerland, U.S.)


Ascription culture: status based on who or what

person is (e.g., America , China, Indonesia)

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Time
Sequential:

only one activity at a time;


appointments kept strictly, follow plans as laid out
(U.S.)
Synchronous:
multi-task, appointments are
approximate, schedules subordinate to relationships
(e.g., France, Mexico)
Present vs. Future:
Future more important (Italy, U.S., Germany)
Present more important (Venezuela, Indonesia

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The Environment
Inner-directed:

people believe in control of


outcomes (U.S., Switzerland, Greece, Japan)

Outer-directed: people believe in letting things

take own course (China, many other Asian


countries)

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Managing multi-cultural initiatives help an


organization keep a competitive HR advantage
through
Improved corporate culture.
Improved employee morale and high retention of
employees.
Enabling organization to move into the emerging
markets.
Decreased interpersonal conflict among employees.
Increased productivity, innovation and brand identity.
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Sum up..
A common mistake: overlooking the local ground

realities under the unconscious bias of their parent


corporate culture policies and practices.
People management in Pakistan or any other alien

overseas operation cannot be successful managed in


any other Japanese or American or Arab or
European way.

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HR policies, system and practices based on culture

and the core values of the parent company may or


may not work in other country context.
Key

to success lies in embracing flexibility


understanding acceptance, respect and adaptability to
the local ground realities.

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