Analyzing Country-of-Origin Effect in Strategic IHRM Orientation

This essay critically analyzes the influence of the country of origin on the strategic international human resource management (IHRM) orientation in multinational companies. It explores the significance of home country influence while acknowledging the impact of host country factors, cultural considerations, power dynamics, political influences, integration of business strategies, and the structure of human resource management. The analysis suggests that the country of origin, though influential, is not the sole determinant of IHRM orientation. Factors such as host country dynamics, cultural differences, and the alignment of HR strategies with overall business strategies also play crucial roles. The essay uses academic sources to support its arguments and concludes that a nuanced understanding of these multifaceted influences is essential for effective IHRM in multinational corporations. The essay also highlights the shift towards decentralized approaches and the evolving nature of IHRM, with e-HRM and strategic business units gaining prominence. The conclusion emphasizes that a holistic approach, considering both home and host country influences, is crucial for the success of international HR strategies.

Running head: INTERNATIONAL HUMAN RESOURCE MANAGEMENT
International human resource management
Name of the student
Name of the university
Author note

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Introduction
In the current business state of affairs, human resource management approaches are
having added importance that it was a few years ago. This is due to the reason that in the current
era of global business scenario, emergence of the multinationals is changing the existing and
conventional trends of the human resource management systems. Business operations are more
diverse now with having presence across different countries and workforce is consisting of
diverse employees. Thus, the orientation of the strategic international human resource
management is also different in different countries and it is the major challenge for the
multinationals to manage the orientation of their human resource management in terms of their
international business. In this case, there are different factors that are having influences on
determining the orientation of the human resource management. One of these key factors is the
home country influence. Even though there are number of arguments being given by different
authors about the influence of the home country in designing the orientation of the strategic
international human resource management, but according to some others, this is not the only
influencing factor.
Moreover, it should also be noted that with the evolution in the human resource
management approach, the influencing factors are also getting changed. Critical analysis of these
factors will help to determine the extent to which each of them is influencing in designing the
human resource management approach. This essay will discuss about the key determining factors
that are having influence in the orientation of the human resource management including the
country of origin impacts. Based on the critical analysis to be done, it will be concluded whether
country of origin is the only key influencing factor or not.
Critical analysis of the determining factors
Prior to the analysis of the different influencing factor, it is important to understand the
extent to which the home country is having influence in the orientation of the strategic
international human resource management. According to Zhu, Zhu and De Cieri (2014), country
of origin is obviously having influence in determining the human resource management
orientation due to the reason that the major organizational strategies and practices are based in
the home country or the country of origin. In addition, in the few multinational corporations, the

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top level management is consists of the managers from the home country only. Thus, the
dominance of the home country aspects is more in the human resource management also. For
example, Apple is an American multinational and their home country based human resource
management approaches are being followed across their global operations. This is due to the
reason that even though Apple is having their operations across the world but organizational
culture followed in the workplace is based on their traditional practices. On the other hand, it is
stated by Ahlvik and Bjorkman (2015) that in the contemporary business organizations, only the
marketing decisions are being made in market adaptable approach while the internal practices
such as human resource management policies are being followed on the basis of home country
trend. For example, companies from any conservative Islamic countries will follow the certain
approaches towards managing their employees across their global operations. The authors have
also stated that the key reason behind the dominance of the home country in designing the human
resource management orientation is the cultural factors. Managing the employees is based on the
cultural approaches and trends and thus the home country cultures are getting higher preferences.
However, on the other hand, it should also be noted that there are few counter arguments
also identified against the dominance of the home country in designing the human resource
management orientation. As per Burbach and Royle (2014), e-HRM is taking the place of the
conventional human resource approaches and with the help of the e-HRM, each of the employees
across the global operations can contribute in the managing the orientation of the human resource
management. Hence, with the holistic involvement and engagement of the internal employees in
the human resource management system, it is less likely that home country is having the same
level of dominance in the current time. Thus, it can be concluded that in the current time, country
of origin is not having the same level influence as it had a few years ago. On the other hand, it is
also identified that in the current tine, multinationals are also following the concept of the
strategic business units that denotes that each of the operation in different countries is being
controlled in decentralized approach. Thus, in this case, the influence of the country of origin is
limited and may be negligible in terms of the designing of strategic human resource management
orientation.
Another major factor that is also having influence in designing the human resource
management orientation is the host country influence. This is due to the reason that similar to the

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home country, the trend and preferences of the host country internal stakeholders also determine
the human resource approaches. According to Brewster, Mayrhofer and Smale 2016, host
country is also having influence on designing the human resource management orientation due to
the reason that the strategic business units being managed by the multinationals are majorly
based on the local market trends. Thus, the preferences and expectations of the local markets or
countries are being considered in designing the orientation. For example, Unilever is having their
operations across the world and each of them is operating as strategic business units. It is also
identified that each of these strategic business units is having different sets of human resource
management approaches. Moreover, it is also being stated by the authors that if the local factors
are not considered in designing the human resource management orientation, then the probability
of getting succeeded will also be low. Thus, it can be concluded that host country is also having
influence in the strategic international human resource management orientation.
Apart from the home and host country factors, cultural factors also influence the
orientation of the strategic human resource management of the multinationals. This is due to the
reason that multinationals are operating in different countries with having different social and
cultural factors. According to Vaiman and Brewster (2015), workforce for the multinationals is
diverse in nature and in this case, the standardized approach of the human resource management
orientation will not be effective. It is also stated by the authors that if the orientation of the
human resource management is not according to the local trends and cultural factors, then it will
not be effective enough in managing the employees. For instance, the expectations and the
mental approach of the employees from the Asian and European region are different the human
resource management should also be oriented based on these differences. Different elements of
the human resource management such as hierarchal level, job involvement and employee
motivation should be designed based on the local factors. In this case, the impact of the home
country will be less due to the reason that if the employee trend in the home country cannot get
matched with that of the host country, then the orientation of the human resource management
will not get succeeded. This point is proving that home country factor is not the only influencing
factor in the human resource management orientation, which there are other factors equally
contributing.

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Power and politics can also be an influencing factor in the orientation of the human
resource management. This is due to the reason that power and politics will determine the extent
to which the all the employees will be involved in the human resource management process.
According to Geppert and Dorrenbacher (2014), impact of the power and politics is more for the
multinationals due to the reason that they are facing the diverse scenarios in different regions
across the world. Thus, the human resource management orientation of the companies will not be
same in the region where the power distance is more or less. For instance, power distance in the
Asian countries is more compared to that in the western countries. Thus, the multinational
entities should follow higher level of hierarchy in the human resource management process and
more directive approach should be followed for the employees in the regions with having higher
power distance. On the other hand, the human resource orientation should be more based on
flexibility and autonomy of the employees in the regions with having lower power distance. On
the other hand, Whittle et al. (2016) stated that politics also play an important role in the
orientation of the human resource management. This is due to the reason that intermediaries will
be low in the region where the probability of organizational politics will be also low and vice
versa. Thus, each of these elements of the human resource management should be initiated based
on the individual culture and political scenario in the region.
Integration of the strategy of the multinationals is also an important determining factor in
the orientation of the human resource management. This is due to the reason that in the current
time, approach of the human resource strategy is well aligned with that of the business level
strategies. As per Purce (2014), the extent to which the human resource strategy of the
multinationals is aligned, home country factors will not be the key influencing factor. This is due
to the reason that majority of the multinationals are having different and market adaptable
business strategies in different countries or regions and based on these differences, human
resource strategies are being oriented. However, on the other hand, it is also stated by the authors
that home country impact will be more in the orientation of the human resource management
only when the centralized approach of integration is being promoted. This is due to the reason
that standardized approach of the human resource strategies is always being based on the home
country trends and patterns. Thus, the influence will also get increased in the orientation of the
human resource management. From this analysis, it can be concluded that home country factor is

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having influence on the human resource management orientation based on the extent to which
the business strategies are integrated.
Structure of the human resource management is another influencing factor for the
orientation of the same. This is due to the reason the level of involvement of the home country
and host country employees in the process will determine the extent of the influence of the
former. According to Mahmood (2015), if the structure of the human resource management is
centralized, then the influence of the home country will be more and vice versa. This is due to
the reason that in the case of centralized human resource management structure, upper level
management is being controlled by the home country professionals and they are more influenced
by their home country culture. On the other hand, if the structure of the human resource
management is scattered and decentralized, then the influence of the home country will be less in
the human resource management orientation. This is due to the reason that decentralized
approach will have number of intermediaries in the structure upper level management will be
low sets of control in different business regions. In this case, the home country is having limited
and restricted influence on the orientation of the human resource management. On the other
hand, Chow, Teo and Chew (2013) stated that in the current time, majority of the multinational
entities are initiating poly centric approach of staffing, which is enabling them to recruit the
human resources based on the skills and expertise of the employees and irrespective of the
nationalities. Hence, the dominance of the home country factor is less in this case and it is also
proving the point that home country is not the only influencing sector for the human resource
management orientation.
Type of employees can also an influencing factor in the human resource management
orientation due to the reason that dominance of the home country factor will be more with the
increase in the home country employees in the workplace and vice versa. According to Floren,
Rundquist and Fischer (2016), staffing will determine the influence of the hem country factor in
the orientation of the human resource management due to the reason that the more will be
requirement of the home country employees, the more will be their influence and vice versa. On
the other hand, if the employees from the host countries are being selected, then the influence of
the host country will be more. In the current business scenario, employees from both the home
and host countries are being selected in the workplace and thus the home country trend is not

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being considered as the influencing factor. With the diverse approach to staffing, dominance of
the particular factor is low in the multinationals and thus it can be concluded that home country
factor is not the only influencing factor in orientation of the human resource management.
Leadership approach is another influencing factor in the orientation of the human
resource management due to the reason based on the leadership; human resource management
objectives are being designed. Moreover, it should also be noted that leadership will also
determine the extent to which the employees will be involved in the human resource
management process. According to Lopez-Cabrales, Bornay-Barrachina and Diaz-Fernandez
(2017), leadership approach will be either output oriented or employee oriented. Thus, if the
human resource management approach of the entity is output based, then the flexible process
will be less and oriented towards the hard approach. In this case of output orientation of the
leadership, influence of the home country will be more due to the reason that different factors
will not be considered and existing process will only be followed. It is also stated by the authors
that if the human resource management is oriented more towards the employee, then soft
approaches will be followed and different factors will be considered. Hence, leadership
approaches to be followed in the business will influence the human resource management
orientation. Moreover, the influence of the home country will also be determined to the extent to
which the different leadership approaches are being followed.
Number of employees in the operation will also determine the extent to which the country
of origin will influence the human resource orientation. This is due to the reason that if the
number of employees in the global operation for the multinationals is high, then the impact of the
home country will not be high and vice versa. According to Hauff, Alewell and Katrin Hansen
(2017), if the employee strength is less in the global operation, then the influence of the home
country will be more. This is due to the reason that in the limited workforce strength, dominance
of the home country will be more as the maximum employees will be based on the home
country. On the other hand, it is also stated by the authors if the workforce strength is more, then
the number of employees from different social and cultural backgrounds will also be more. Thus,
the diversity will get increased and the dominance of the home country will be less. It can be
concluded that the number of employees in the business present in different foreign country
operations will determine the influence of the home country. If the workforce strength is high,

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then the country of origin will not have influence in the orientation of the human resource
management.
Type of goods or products or services can also influence in the orientation of the human
resource management due to the reason that some products require standardization while some
other can be customized according to the local market trends. According to Wood (2018), if the
products or services to be offered in the market are standardized across the world, then the
business strategies of the company are also standardized including the human resource
management. This is due to the reason that similar approach of managing the employees should
be followed in offering the same value to the market. On the other hand, it is also stated by the
author that if the products or the services can be customized according to the market trends, then
the business approach including the human resource management orientation should also be
based on the local market trends and patterns. For example, the business approach and the human
resource management orientation of Apple is same across their global operation due to the reason
that they are offering same value to the global customers and same level of services are being
offered to the customers across the world. However, on the other hand, companies such as
Unilever are practicing market adaptable approach in offering products according to the local
market preferences in different countries. In this case, their human resource management
orientation is also different in different regions. This should be noted that in the case of market
adaptable approach, influence of the country of origin is less due to the reason that local factors
are more preferred and considered. On the other hand, in the case of standardized approach, the
influence of the human resource management is more as the existing strategies are being
followed.
Conclusion
Thus, it can be concluded that country of origin is not the only influencing factor in the
strategic international human resource management for the multinationals. This is due to the
reason that there are other few factors that are having influence in the human resource
management orientation in the contemporary business scenario. Moreover, in this essay, it is also
identified that the intensity of the country of origin as the key influencing factor is gradually
decreasing due to the emergence of other newer factors. In this essay, there are nine major
factors are discussed, which influences the strategic international human resource management

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for the multinationals. This can also concluded that intensity of the country of origin in terms of
influencing is vulnerable to change in the external factors.

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