A comparison of international HRM practices by Indian and European MNEs: evidence from Africa

Abstract

By comparing the HRM practices in Indian and European MNE subsidiaries located in four of the Southern African Development Community countries, this paper tests the relevance of the country-of-origin effect and analyses the strength of institutional and firm-level influences. Examining data from 865 MNE subsidiaries obtained from the World Bank enterprise survey data, the paper finds that Indian MNEs have higher labour costs in relation to total sales than their European counterparts, that Indian MNEs make more use of temporary labour than their European counterparts, that Indian MNEs invest in less training than their European counterparts. No support is found for the hypothesis that Indian MNEs have a lower ratio of skilled workers in comparison to European-owned subsidiaries. The study shows that country-of-origin effects are weakened if they are not consistent with host country ideology and that as economies evolve so too do their expectations of HR policy and practices.