Page 166 - DMGT548_GLOBAL_HRM

Unit 9: Global HR Issues in the Host Context

Corporate identity is important and it is possible to generate a sense of pride and belongingness Notes
that enable unity of purpose to be achieved. Subsidiary staff may have strong identity with the
local unit, but the challenge is to foster employee identification with the global level.
People may be prepared to adopt certain work behaviours to retain their employment, but that
does not necessarily mean that they ascribe to the corporate values that shape required behavioural
outcomes.

Example: Chinese working in Japanese plants in China perceived team briefings and
other such forums as a new form of rhetoric, replacing nationalist and Communist party
propaganda of the past, and consequently were considered of little value by workers and
managers.
Cultural distance also affects the degree to which work practices require adaptation. One can
expect hiring practices to be more between the US and India. As more multinationals set up
operations in countries previously closed to foreign direct investment on a large scale, one can
expect some convergence of HR practices.
The presence of expatriates and their ability to encourage and impose appropriate work behaviour
also affects the work culture. A preference is given to HCN in key positions by multinationals
operating in India because they could learn easily in his years spent on the job. Localisation of
HR staff positions is more likely to ensure that local customs and host-government employment
regulations are followed.

9.1.2 Mode of Operation

A multinational ability to impose standardised work practices is not only affected by cultural
differences that may create resistance to change from subsidiary staff. It is affected by the form
of operation that the multinational uses.

Entering via an acquisition may provide the multinational with market advantages, but its
ability to transfer technical knowledge, systems and HR practices may be restricted. Plant and
equipment may need upgrading along with the skills of the work that the purchaser inherits. It
is called Brownfield – where the multinational acquires an existing local firm as part of the
establishment of a local operation, but the multinational effectively replaces many of the resources
and capabilities.
The local company requires considerable investment and restructuring to make it operational,
and this will include human resources, with a high demand on expatriates initially. Investment
in training programmes has been a critical factor. This type acquisition is more common in
emerging markets, such as those of Eastern Europe.
Mode of operation can inhibit or facilitate standardisation. There are two examples that can be
used to prove that. In late 1978, the Chinese government announced an open-door policy and
commenced economic reforms aimed at moving the country from a centrally planned to a
market economy. Western firms that entered China early were more or less forced to enter into
joint ventures with State Owned Enterprises (SOEs), whereas those entering later have been able
to establish wholly owned operations.

Example:

1. Shanghai Bell-a joint venture formed in 1983 between a Belgian telecommunication firm,
the Belgian government and the Chinese Postal and Telecommunications Industries
Corporation (PTIC). There was a gradual transfer of relevant technology by the Belgian

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