Impact of Cultural and Institutional Factors on HRM Policies of Infosys: A Case Study

MMH753 – Human Resource Management in the Global Context
Assessment #2
Case Study Report
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Executive Summary
This study attempts to analyse and understand the impact of cultural,
institutional and other factors on the human resource management
policies of multinational companies with focus on Infosys, a leading
IndianIT services and consulting company with a footprint. The
companywas selected for the case study keeping in view its strong
presence in America, Europe and Asia Pacific region with offices in 191
locations spread across 46 countries.
The case study has taken India, where the Infosys is headquartered, the
United States, where it has largest presence, and China, a country with
vastly different culture, for comparison and assessing the influence on the
HRM practices in the three countries. The report discussesthe factors like
labour laws, cultural diversity, institutional characteristics, trade ties and
other factors that influence the HRM polices of the company practised in
the headquarters and the host countries. The study takes an in-depth look
at various issues related to HRM polices like, labour relations, leave
structure, employees’ rights talent development, compensation, and
draws comparison of practices being followed in the three countries.
The study also analyses the impact of difference in HRM policies,
particularly the large gap in compensation, on employees of host country
and home country in different locations. It also takes notice of the fact
that the companies need enabling environment in a host country to invest
on human resources and development of talent. The relatively small
presence of Infosys in China, the world’s largest country, is indicative of
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the fact that multinational company are reluctant to invest if the
environment, particularly and trade ties with the host country, is
conducive to growth of business. Multinational companies have to tweak
the HRM policies in accordance with the laws of the hostcountries, which
leads to wide gap in facilities and compensation paid to home country
employees and host country employees.
The study report also makes some important recommendation to bridge
the gap in the HRM policies being practices in different locations and
ensure comparable compensation, services and other facilities. It will
make Infosys truly a global unit and keep the employees contented and
motivated.
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Table of Contents
1. Introduction.........................................................................................
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2. INFOSYS: Overview .............................................................................
6
3. Approaches to
GHRM...........................................................................7
4. Global Human Resource Management Policies and practices............8
5. Typology of Expatriates Selection
Processes........................................12
6. Employee Training and
Development...................................................13
7. International Management
Development.............................................15
8. Compensation of International
Employees...........................................15
9. Labour
Relations .....................................................................................18
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10. Talent
Development................................................................................19
11. Host Country Politics Impact on Multinational
Companies ..................21.
12. Succession
Planning.................................................................................22
13. Conclusion..................................................................................
............. 23
14. References.................................................................................
................24.
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Introduction
Human resources are considered as one of the most valuable assets of an
organisation. However, a company may not be able to reap full benefits
without a comprehensive human resource management policy in place. It
is particularly important in case of multinational companies, which
function in a global environment with a diverse workforce drawn from
different countries. (Pdfs.semanticscholar.org, 2019)
The ongoing globalization is increasing and intensifying competition
among creating pressure on multinational companies for extending
footprint. They are investing on quality human resourcesto have an edge
in the highly competitive business environment and evolving suitable
human resource management policies to address the concerns raised due
to cultural and intuitionaldifferences in the home country and host
countries.It is a slow process of transition from human resource
management to international human resource management.
Global human resource management, also referred to as international
HRM, is a broad term that includes all such aspects of a company’s human
resources, payroll, and talent management processes operating on a
global level.. In other words, Global HRM is the process that involves
procurement, allocation and effective utilization of human resources in a
multinational corporation.
HRM is all about understanding, analysing, applying and revising all the
internal and external factors as they impact the process of management
of human resources in enterprises globally to improve the experience of
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the related stakeholders, including customers, investors, employees,
environment, and society.
Ongoing technological innovations have made it easier for organizations
to perform better across the world, expanding globally has become a
necessity for survival. Similarly, it is also essential for these multinational
companies to have appropriate HRM software that is capable of catering
to the employees working around the globe.
Multinational companies have to align their HRM policies with the cultural,
institutional and other contextual factors that come into play in a global
operating environment. Studies have revealed that international HRM
policies often do not work to the advantage of companies as different
countries have their own HRM practices rooted in their own peculiar
political, cultural and social settings. There is significant local influence in
HRM practices, which have to be taken care of to make optimum use of
the human resources. It is imperative that to for companies to have
suitable HRM policies that help attract, retain and manage human
resources effectively to gain a sustained competitive edge.
INFOSYS: An Overview
For this case study, Infosys, India’s second largest IT (Information
Technology) company with footprint across the globe has been selected. It
ranked 3rd in 2019 Forbes ‘World’s Best Regarded Companies’ List
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Headquartered in Bangaluru, formerly Bangalore, the company has a
global footprint with 13 subsidiaries and 191 offices spread across 46
countries. The maximum 45 offices were in North America and 6 in South
America. Infosys has highest presence in the US with 18 offices, two more
than home country India, and 6 offices in China.
With a workforce 229000 and a revenue of $12.1 billion, it is a global
leader in next generation digital services and consulting.
India's second largest software exporter Infosys was incorporated in the
year 1981 byMr.N.R.Narayana Murthy at Bangaluru in India. The company
was started by seven people with a paltry investment of USD 250. The
company became a public limited company in the year 1992 and it was
the first Indian company to be listed on the NASDAQ in the year 1999.
Infosys also forms a part of the NASDAQ-100 index.
Infosys won the National Award for Excellence in Corporate Governance,
conferred by the Government of India,.Continuously in the year 2001,
2002 and 2003. (Limited, 2019)
The study will focus on the impact on HRM policies of the company in
countries, with vastly different cultural, political and institutional settings,
like the United States and China.
Like most big multinational companies,the workforce of the Infosys
comprisesparent-country, host-country, or third-country nationals.Before
looking into various aspects of GHRMpolicies, it is essential get familiar
with the terms used to refer to various category of employees.
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