1. HRM in The Host Country Context
Dony Eko Prasetyo, S.IP.

2. 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

3. 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

4. Factors influencing standardization
Host-country culture and workplace environment
Mode of operation involved
Size and maturity of the firm
Relative importance of the subsidiary

5. 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

6. The linkage between culture and behaviour

7. 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

8. Factors influencing standardization of work practices

9. Work 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

10. Subsidiary mandate
The position a subsidiary holds within the global ‘family’ is an important aspect when discussing the transfer of work practices
Transferring knowledge and competence is difficult as subsidiary initiatives are often not seen as relevant (corporate immune system)
Staff movements can assist here

11. 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 convergence, we expect national cultures to continue affecting the hiring practices. …
The best IHRM practices ought to be the ones best adapted to cultural and national differences”

12. 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

13. 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

14. Retrenching staff The reverse of the employment ‘coin’
Strategic decisions regarding foreign operations have HR implications, including retrenchment
Not confined to subsidiary operations but may affect home base - eg. transferring call centres from UK and US to India

15. HR implications of language standardization
Adopting a common corporate language puts pressure on employees to become competent in the corporate language
Affects
Promotion
Ability to attend corporate programs and meetings
Availability for international assignments

16. HR implications of language standardization

17. Shadow structure of KONE based on language

18. 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

19. HR’s role Drawing up and reviewing codes of conduct
Conducting a cost-benefit analysis to justify an expatriate as a monitor
Championing local operators as monitors
Being a member of the team who conducts periodic ‘checking’ visits
Overseeing external monitors and auditors where used
Checking rewards and performance systems take compliance into consideration