Print

LOCAL ADAPTATION VS. GLOBAL INTEGRATION OF PAY AND REWARDS PRACTICES AMONG MNCS

Anita Kyurova

Abstract

In view of the opposition between integration and adaptation processes in Multinational Companies (MNCs) the article poses the question of how their relationship does influence the compensation policy in organizations. On the basis of two case studies, the BrazilCo and India’s MNCs case study the article discusses the importance of their pay and rewards practices. The proposed illustrations finally emphasize the role of hybridization in view of the transfer of compensation strategies. In such a context, the concluding thoughts admit that cultural and institutional pressures influence MNCs when transferred in host countries which results in reformulation of their HRM strategies in order to be more adequate to the foreign business environment.

 

Keywords

multinational companies; pay and rewards; hybridization; business adaptation

 

JEL Codes: F42, M12

 

References

Aguinis, H., Joo, H., Gottfredson, R. (2013). What monetary rewards can and cannot do: How to show employees the money. Business Horizons, 56(2), pp. 241-249

Ando, N. (2015). Internal mimetic behavior of MNCs with respect to foreign subsidiary staffing. Journal of global mobility, 3(1), pp. 46-61

Belanger, J., Edwards, P. K. (2006). Towards a political economy framework: TNCs as national and global players. In: Ferner, A., Quintanilla, J., Sanchez-Runde, C. (eds.) Multinationals, institutions and the construction of transnational practices, Basingstoke: Macmillan

Belizon, M. J., Morley, M. J., Gunnigle, P. (2016). Modes of integration of human resource management practices in multinationals. Personnel Review, 45(3), pp. 539-556. Available from: https://www.emeraldinsight.com/doi/abs/10.1108/PR-09-2014-0207 [Accessed 12/01/2018]

Budhwar, P., Sparrow, P. (2002). An integrative framework for determining cross-national human resource management practices. Human resource management review, 12, pp. 377-403

Bonache, J., Trullen, J., Sanchez, J. (2012). Managing cross-cultural differences: testing human resource models in Latin America. Journal of Business Research, 65(12), pp. 1773-1781

Chung, C., Sparrow, P., Bozkurt, O. (2014). South Korean MNE’s international HRM approach: Hybridization of global standards and local practices. Journal of world business, 49, pp. 549-559. Available from: https://ac-els-cdn-com.proxy.library.dmu.ac.uk/S1090951613000965/1-s2.0-S1090951613000965-main.pdf?_tid=178cf0e3-12a1-439e-bdcf-392c51f8d903&acdnat=1552928812_eca9f9845730d5f039bae4ed82f37728 [Accessed 18/03/2019]

Cray, D. (1984). Control and coordination in multinational corporations. Journal of International Business Studies, 15(2), pp. 85-98

Compa, L. (2012). When in Rome: the exercise of power by foreign multinational companies in the United States. Transfer, 20(2), pp. 271-293

Edwards, T. et al. (2016). Global standardization or national differentiation of HRM practices in multinational companies? A comparison of multinationals in five countries. Journal of International Business Studies, 47(8), pp. 997-1021

Edwards, T., Marginson, P., Ferner, A. (2013). Multinational companies in cross-national context: integration, differentiation, and the interactions between MNCs and nation states. Industrial and Labor Relations Review, 66(3), pp. 1-42

Enright, M. J., Subramanian, V. (2007). An organizing framework for MNC Subsidiary typologies. Management international review, 47(6), pp. 895-924

Ferner, A. et al. (2003). The dynamics of central control and subsidiary autonomy in the management of human resource: case study evidence from UC MNCs in the UK. Organization studies, 25(2), pp. 327-356

Ferner, A., Quintanilla, J. (1998). Multinationals, national business systems and HRM: the enduring influence of national identity or a process of Anglo-Saxonisation. International journal of Human Resource Management, 9(4), pp. 710-731

Festing, M. et al. (2012). Global performance management in MNEs – Conceptualization and profiles of country-specific characteristics in China, Germany, and the United States. Thunderbird International Review, 54(6), pp. 825–843

Gamble, J. (2010). Transferring organizational practices and the dynamics of hybridization: Japanese retail multinationals in China. Journal of Management Studies, 47, pp. 705–732

Geary, G., Aguzzoli, R., Lengler, J. (2017). The transfer of ‘International Best Practice’ in a Brazilian MNC: A consideration of the convergence and contingency perspectives. Journal of international management, 23, pp. 194-207

Ghoshal, S., Bartlett, C. A. (1990). The multinational corporation as an interorganizational network. Academy of management review, 15(4), pp. 603-625

Gold, M. (2009). Employment policy in the European Union: origins, themes and prospects. Basingstoke: Macmillan

Grant, R. M. (1996). Prospering in dynamically-competitive environments: organizational capability as knowledge integration. Organizational science, 7(4), pp. 375-387

Hall, P.A., Soskice, D. (2001). Varieties of Capitalism: the institutional foundations of comparative advantage. Oxford: Oxford University Press

Hofstede, G. (1980). Culture’s consequences: international differences in work related values. Beverly Hills, CA: Sage

Kanter, R. M., Dretler, T. D. (1998). Global strategy and its impact on local operations: Lessons from Gillette Singapore. Academy of management executive, 12(4), pp. 60-68

Kiryakova-Dineva, T., Hadzhipetrova-Lachova, M., Chankova, Υ. (2017). Intercultural dialogue for education in the Mediterranean region, Edulearn, pp. 3920-3926

Kogut, B. (1991). Country capabilities and the permeability of borders. Strategic management journal, 12(1), pp. 33-47

Kobrin, S. J. (1991). An empirical analysis of the determinants of global integration. Strategic Management Journal, 12(5), pp. 17-31

Kostova, T. (1999). Transnational transfer of strategic organizational practices: a contextual perspective. Academy of Management Review, 24(2), pp. 308-324

Lane, C. (1995). Industry and Society in Europe. Aldershot: Edward Elgar

Laurent, A. (1986) The cross-cultural puzzle of international human resource management. Human Resource Management, 25(1), pp. 91-102

Muritiba, P. et al. (2012). Challenges for Brazilian MNCs' international human resources management. European Journal of International Management, 6 (3), pp. 248–264

Patel, P. et al. (2018). The transfer of HRM practices from emerging Indian IT MNEs to their subsidiaries in Australia: The MNE diamond model. Journal of Business Research, 93, pp. 268-279

Perlmutter, H. V. (1969). The tortuous evolution of the multinational corporation. Columbia Journal of World Business, 4(1), pp. 9-18

Prahalad, C. K., Doz, Y. L. (1987). The multinational mission. New York: The Free Press

Pudelko, M., Harzing, A. (2007). Country-of-origin, localization, or dominance effect? An empirical investigation of HRM practices in foreign subsidiaries. Human Resource Management, 46(4), pp. 535-559

Pugh, D. S. et al. (1969). The context of organization structure. Administrative Science Quarterly, 14(1), pp. 1-9

Rosenzweig, P., Nohria, N. (1994). Influences on human resource management practices in multinational corporations. Journal of International Business Studies, 25(2), pp. 229-251

Rugman, A., Verbeke, A. (2003). Extending the theory of the multinational enterprise: internalization and strategic management perspective. Journal of international business studies, 34(1), pp. 125-137

Schuler, R. S., Rogovsky, N. (1998). Understanding compensation practice variations across firms: The impact of national culture. Journal of International Business Studies, 29(1), pp. 159-177

Solomon, R., Wu, Z. (2012). Institutional distance and local isomorphism strategy. Journal of International Business Studies, 43(4), pp. 343-367

Storgaard, M. (2014). The most public secret: Concealing and silencing ethnocentrism in the MNC. Bingley: Emerald Group Publishing Limited

Stoykova, P. (2016). Legal culture in the context of globalization. Postmodernism problems, Vol. 6 (3), pp. 207-220. [in Bulgarian: Стойкова, П. (2016). Правната култура в условията на глобализация. Проблеми на постмодерността. Том 6 (3), pp. 207-220          

Tanure, B., Barcellos, E., Fleury, M. (2009). Psychic distance and the challenges of expatriation from Brazil. International Journal of Human Resource Management, 20(5), pp. 1039–1055

Tayeb, M. (1998). Transfer of HRM practices across cultures: an American company in Scotland. The international journal of human resource management, 9(2), pp. 332-358

Whitley, R. (1992). Business systems in East Asia: Firms, markets, and societies. London: Sage Publications

Wilkinson, B. et al. (2001). The new international division of labour in Asian electronics: work organization and human resource in Japan and Malaysia. Journal of Management Studies, 38(5), pp. 675-695

Yahiaoui, D. (2014). Hybridization: striking a balance between adoption and adaptation of human resource management practices in French multinational corporations and their Tunisian subsidiaries. The international journal of human resource management, 26(13), pp. 1665-1693

Yu, G., Park, W., Cho, Y. (2007). MNCs’ HRM strategy and country of origin effect: Do North American, European and Japanese firms really differ?. Management revue, 18(4), pp. 392-409

 

Full Text: PDF (English)