Transfer of HRM Practices in MNCs

One of the central questions in the literature on MNCs is the extent to which their subsidiaries act and behave as local firms (local isomorphism) versus the extent to which their practices resemble those of the parent company or some other global standard (internal consistency).

In the light of globalisation, HRM is evolving from being a mere support function to one of strategic importance and several authors have argued that HRM policies and practices are becoming crucial because they can act as mechanisms for co-ordination and control of international operations. At the same time, it has been acknowledged that HRM constitutes a major constraint when MNCs try to implement global strategies, mainly because of the different cultural and institutional framework of each country in which the MNC operates.

The purpose of this program (conducted in collaboration with Barbara Myloni and Markus Pudelko) is to provide an insight into the interplay of cultural, institutional and organisational factors that affect the transfer of HRM practices across borders.

As is the case in many other areas of international management, previous research in this area has focused mostly on Japan and the USA as home/host countries. Within Europe, research has almost exclusively focused on Germany and the UK.

In the first project, we therefore purposefully selected underrepresented research settings such as Greece, and focused on European MNCs rather than Japanese and American MNCs only. Data were collected for 135 subsidiaries and local companies in Greece. Several conference papers were presented and three journal articles have been published [International Journal of Cross Cultural Management and International Journal of Manpower and International Journal of Human Resource Management].

Another research project in collaboration with Markus Pudelko (University of Edinburgh) compares HRM models among Japanese, German and US MNCs and their subsidiaries. It is based on a unique database with primary information on 849 HQs and subsidiaries collected over five years by Dr. Pudelko.

Our results led to the rather surprising conclusion that for what might be considered to be the most localized of functions - human resource management - convergence to a world-wide best practices model (also called dominance effect) is clearly present for Japanese and German MNCs and as such challenges established beliefs in this area. We suggested that MNCs might limit transfer of practices to what they consider to be their core competencies and converge to best practices in other areas. A related paper with Markus Pudelko looks at management practices in Europe and assessed the extent to which a common European model is present, whilst a subsequent book chapter deals with Japanese HRM in particular.

Selected publications

Online papers - Full list of publications

  1. Pudelko, M.; Harzing, A.W. (2010) Japanese HRM: Inspirations from abroad and current trends of change, in: Bebenroth, R. (ed) International Human Resource Management in Japan, London: Routledge.
  2. Pudelko, M.; Harzing, A.W. (2008) The Golden Triangle for MNCs: Standardization towards headquarters practices, standardization towards global best practices and localization, Organizational Dynamics, vol. 37, no. 4, pp. 394–404. Available online...
  3. Pudelko, M.; Harzing, A.W. (2008) Human Resource Management and Japan, paper presented at the RIEB-Center Workshop, Kobe University, March 27th 2008.
  4. Pudelko, M.; Harzing, A.W. (2007) Country-of-Origin, Localization or Dominance Effect? An empirical investigation of HRM practices in foreign subsidiaries, Human Resource Management, vol. 46, no. 4, pp. 535-559. Available online... [Winner of the 2007 Ulrich-Lake award for the best paper published in Human Resource Management.]
  5. Myloni, B.; Harzing, A.W.; Mirza, H.R. (2007) The effect of organisational factors on the transfer of human resource management practices: European and US MNCs and their Greek subsidiaries, The International Journal of Human Resource Management, vol. 18, no. 12, pp. 2057–2074. Available online...
  6. Pudelko, M.; Harzing, A.W. (2007) How European is management in Europe? An analysis of past, present and future management practices in Europe, European Journal of International Management, vol. 1, no. 3, pp. 206-224. Available online...
  7. Pudelko, M.; Harzing, A.W. (2006) HRM practices in subsidiaries of US, Japanese and German MNCs: Country-of-origin, localization or dominance effect?, paper presented at the annual meeting of the Academy of International Business, Beijing, China, 23-26 June.
  8. Pudelko, M.; Harzing, A.W. (2006) County of origin, localization and dominance effects in the transfer of HRM practices: US, Japanese and German MNCs?, conference proceedings of the Academy of International Business, UK Chapter, Manchester, 7-8 April.
  9. Myloni, B.; Harzing, A.W.; Mirza, H.R. (2005) The effect of organisational factors on the transfer of human resource management practices: European and US MNCs and their Greek subsidiaries, conference proceedings of the 8th conference on International Human Resource Management, June 14-16, 2005, Cairns, Australia.
  10. Myloni, B.; Harzing, A.W.; Mirza, H.R. (2004) Host country specific factors and the transfer of Human Resource Management practices in multinational companies, International Journal of Manpower, vol. 25, no. 6, pp. 518-534. Available online...
  11. Myloni, B.; Harzing, A.W.; Mirza, H.R. (2004) Human Resource Management in Greece: Have the colours of culture faded away?, International Journal of Cross Cultural Management, vol. 4, no. 1, pp. 59-76. Available online...
  12. Myloni, B.; Harzing, A.W.; Mirza, H.R. (2003) Host country specific factors and the transfer of Human Resource Management practices in multinational companies, paper presented at the 7th Conference on International Human Resource Management, June 4-6, 2003, Limerick, Ireland.
  13. Myloni, B.; Harzing, A.W.; Mirza, H.R. (2003) Organisational factors and their effect on the transfer of human resource management practices from parent companies to their overseas affiliates: European and US headquarters and their Greek subsidiaries, paper presented at the 3rd Annual Conference of the European Academy of Management, April 3-5, 2003, Milan, Italy.
  14. Myloni, B.; Harzing, A.W.; Mirza, H.R. (2002) A comparative analysis of HRM practices in subsidiaries of MNCs and local companies in Greece, conference proceedings of the 28th EIBA conference, Athens, 8-10 December.
  15. Myloni, B.; Harzing, A.W. (2001) Transfer of Human Resource Management practices from parent companies to their overseas affiliates - A focus on organisational factors, paper presented at the International Conference of Multinational Companies and HRM: Between Globalisation and national Business Systems, DMU Leicester, 12-14 July.
  16. Myloni, B.; Harzing, A.W. (2000) Can cultural and institutional theories be combined to explain cross-national differences in management? Along the lines of methodological individualism and holism, paper presented at the 16th EGOS colloquium, 2-4 July, Helsinki.