HRM

Country Of Origin Effects And HRM In Multinational Companies



Country Of Origin Effects And HRM In Multinational Companies

Introduction

Over recent years, there has been a growing body of research on the impact of home and host country effects on HRM practices of subsidiaries of multinationals (MNCs) (Ferner, 2007; Gamble, 2003; Farley et al., 2004). The main limitation of the current body of research is the exclusive focus on western multinationals in western countries or emerging economies (Almond et al., 2003; Edwards, 2008; Edward and Ferner, 2004; Farley et al., 2004; Ferner and Quintainilla, 2008; Ferner and Varul, 2008; Guest and Hoque, 2006; Innes and Morris, 1995; Muller, 2008; Tayeb, 2008). Extant research has not examined HRM practices of MNCs from emerging economies operating in Western developed countries. This research will help fill this gap.

This research is important for at least two reasons. First, more MNCs from emerging economies are entering western countries (Liu et al., 2005). For instance, there are five of Taiwan's MNCs in the top 50 of the non-financial MNCs from the emerging economies (United Nations, 2003). The increasing presence of Taiwan investment and subsidiaries in the UK has resulted in the hiring of more than 9,000 employees and managers (FAME, 2004). Designing and emerging effective HRM policies to manage these local work forces poses several challenges. For example, the recent high profile takeovers of Siemens' mobile production site in Germany by Benq Group - a Taiwanese company - raised several questions: Will Benq use a German or Taiwanese style of management? And how will workers in Germany react to Taiwanese management practices? Second, this paper expands our understanding of what we know about the impact of host country and home country effect on HRM strategies and practices in this new socio-cultural setting. Questions still remain on the generalisability of findings on home and host country effects from the studies conducted on western MNCs. MNCs from emerging economies may want to emulate host country practices in western countries rather than implement home country practices. Thus, this research is designed to extend an already-documented phenomenon in a new setting.

Previous research on MNCs had identified dual pressures for the need to conform to home country (push force) and host country (pull force) institutional environments when adopting HRM strategies and practices (Rosenzweig and Nohria, 2004; Taylor et al., 2006; Farley et al., 2004; Hillman and Wan, 2005). We know very little on how these pressures influence HRM strategies and practices at subsidiary level of MNCs from emerging economies. While previous comparative research on HRM in the Asia Pacific region (Ulgado et al., 2004; Hofstede and Bond, 1988; Hofstede, 2003, 2007; Bae et al., 2008; Chow et al., 2008; Huang, 2000; Awasthi et al., 2001; Chow et al., 2000) has identified the national origin of firms including its national institutions and culture as the key shapers of HRM.

HRM IN TAIWAN AND THE UK: COMPARISONS OF PAST RESEARCH

The cultural and institutional environments in Taiwan are different from that of the ...