International Human Resource Management - Literature Review

Running Head : INTERNATIONAL HUMAN RESOURCE MANAGEMENT
International Human Resource Management
Name of the Student
Name of the University
Author Note

Literature Review
There has been a wide internationalization of the companies from developing economies.
They are trying to participate in the international trade having grown the foreign direct
investment and at the same time, they are surging in the acquisition activities too. It can also be
seen that the multinationals from the emerging economies such as Embraer (Brazil), Haier
(China), Koc Holdings (Turkey), Tata Motors (India) and others are operating rapidly and
entering the developed economies such as United States, United Kingdom and others. This report
will target the EMCs in general which have operations in both developed and emerging markets
(Almond, Edwards and Clark 2003). The report will focus on the way cultural and institutional
differences affect the dissemination of HRM strategies and practices by the EMNCs operating in
a developed economy. It will also focus on the challenges that would be faced by the EMNCs
during transferring the HRM practices across borders. It will further describe the approaches that
would be adopted by the EMNCs for managing their subsidiaries in the developed markets and
subsidiaries in the emerging markets.
Why the EMNCs are entering the developed countries
The EMNCs make use of the cross-border merger and acquisitions for acquiring
strategic assets that fulfil the deficiencies of resources they have. Hence, the developed markets
have become their significant destinations. While entering the developed economies, the EMNCs
are facing cultural and institutional differences. The EMNCs can also face challenges while
establishing legitimacy in a developed economy. This might lead them to need a quick resources
for becoming competitive in the international markets (Audea, Teo and Crawford 2005).

The cultural environment can be considered as a set of practices, beliefs , behaviours and
customs which are found to be common for everyone who lives within a certain population. The
cultural environment can shape the way every person develops having influenced the
personalities and the ideologies. The cultural environments are well determined by the different
aspects of culture which influence the personal behaviours and choices. In the international
business contexts, cultural environment is extremely necessary. It requires a string understanding
of the different cultures while doing business in a global context. What works in one country
might not work in another country and rather can be interpreted as an insult (Rosenzweig and
Nohria 1994). The multinationals in the emerging market and the cross-cultural teams are
rapidly becoming aware of extending the knowledge of global contexts with insightful
approaches to the business problems. The global organizations are facing stumbling blocks in
terms of the culture and the international business.
On the other hand, institutional environment is characterized by the elaboration of the
requirements and rules for which the individual organizations should conform to receive support
and legitimacy. The institutional environment is a process of internationalization. One of the
best way to understand this aspect is through understanding the concepts related to the
international business theory and the institutional theory. It rather consists of the regulations,
customs, the prevalent states of the societies, the professions along with the organizations too
which shape the organizational behaviour and the outcomes too. There is a powerful role of the
home country institutional environment in the international strategy. In relevance to the
internationalization of the business, there is a significant importance of having an institution-
based-view . This new point of view in the field of the international business studies is also
known as the industry –based view or the resource-based view.