Cross Border Dissemination of HRM strategies and Practices by EMNCs

CROSS BORDER DISSEMINATION OF HRM STRATEGIES AND PRACTICES
Cross Border Dissemination of HRM strategies and Practices by EMNCs
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CROSS BORDER DISSEMINATION OF HRM STRATEGIES AND PRACTICES
Abstract
The HRM department is a very important segment of any organization. The emergence of
EMNCs and the need to operate in other emerging and developed nations raises critical concerns
on dissemination of HRM practices and strategies. This paper notes that cultural and institutional
differences affect the dispensation of the HRM practices and strategies. EMNCs may take the
ethnocentricity approach while venturing into emerging markets. However, when moving into
developed markets they often need to transform their HRM policies to adopt better-globalized
management techniques to compete favorably. Differences in cultural factors, globalization
demands and complex operational environment are some of the challenges faced by EMNCs as
they move across the borders. This paper also suggests that the best approach by EMNCs to
operate in both emerging and developed markets is to be adaptive. The approach ensures
responsiveness and appreciation of the host countries values and practices towards realization of
desirable performance.
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CROSS BORDER DISSEMINATION OF HRM STRATEGIES AND PRACTICES
Cross Border Dissemination of HRM strategies and Practices by EMNCs
Introduction
The human resource department (HRM) is at the core of any business success. However,
only effectively and efficiently managed HRM can be a source of competitive advantage to a
company. Most companies struggle to ensure to design their HRM strategies and practices in the
face of increasing competition occasioned by the globalization phenomenon. MNCs from
emerging markets find themselves on tricky grounds trying to balance between the reigning
global standards, home country regulations and the local environmental pressures (Gammeltoft et
al., 2010). At the centre of the conflict is the desire by the MNCs to maintain and sustain their
standardized institutional strategies and practices against the cultural fabric experienced in the
new markets. This report reviews the cultural and institutional differences affect the
dissemination of HRM strategies and practices, the challenges faced by the EMNCs moving into
emerging and developed markets as well as the approaches used by the EMCs to effectively
manage their subsidiaries.
Impact of Culture and Institutional Differences to the dissemination of HRM
strategies
The operational environment in the host country may affect the dissemination of the
HRM strategies. Emerging markets have less stringent regulations hence having friendly markets
relative to developed markets with more strict regulations. According to ethnocentricity theory,
most companies tend to invest a lot in the development of their HRM practices and strategies. As
such, they would want to reciprocate the same in the host country. Such companies face
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CROSS BORDER DISSEMINATION OF HRM STRATEGIES AND PRACTICES
challenges when they operate in developed countries with long-standing regulations to control
the practice environment. These restrictions may force the EMNCs to transform their policies
and strategies to fit into their new operating environments (Thite, 2015).
There are underlying differences between the HRM practices in developing and emerging
markets. Although some of the universal principles may still be operational, shifting from an
emerging market to a developed market would require transformation of some practices. The
level of competition experienced in developed markets demand new flexible and evidenced-
based strategies for growth and success to occur. According to He and Zhang (2018), specific
human resource practices and strategies are unique to specific organizational cultures. Hence, the
employees working under the EMNCs adopt and influence the culture of these companies. In the
event of movement from one market to another, these professionals would act to transfer their
HRM practices.
In other operational environments, it would be very difficult to sustain the previous
organizational culture that encompasses HRM practices and strategies. The different cultural
setup would pose challenges to the operational efficiency of the EMNC greatly. Further, the
values, behavioral manifestations, and management attitudes are different and unique to culture.
Management and organization of EMNCs cannot operate in isolation from the surrounding
cultures. They have to change strategies and practices in their HRM departments to operate well
and be accepted in foreign emerging and developed markets. Failure of the EMNCs to adapt to
the culture of the host would lead to negative consequences on their subsidiary performances.
Horwitz et al. (2015), notes that EMNCs adapt to a considerable level to the culture of their host
country. On the same note, all the subsidiaries managed in consistency with the host countries
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