Abstract
AbstractThere is increasing evidence that multinational enterprises (MNEs) from less dominant economies tend to mimic and disseminate human resource management (HRM) practices sourced from a dominant economy, usually the United States, to overcome their “liabilities of origin.” However, our understanding of the specific challenges involved in the implementation of such practices by firms across different national and subsidiary contexts remains limited. Drawing on evidence from a case study of a South Korean MNE, we examine the extent to which, and ways in which, global HRM policies mimicking U.S. practices are implemented across its sales, manufacturing, and research and development subsidiaries in the United States and India. We find discernible differences in the implementation of the global policies both between the two host country sites and across the three function‐specific subsidiaries in each country, identifying a range of national and subsidiary‐specific factors that inform these variable implementation outcomes. In addition to legitimacy challenges related to the source, appropriateness, and process of transfer, we note a unique form of legitimacy challenge—“the liability of mimicry”—whereby local actors can challenge head office policies on the basis of a claim to superior expertise in the dominant practices, as a particular concern of MNEs from emerging economies.
Highlights
The transfer of human resource management (HRM) policies within multinational enterprises (MNEs) has been one of the most extensively researched themes in the field of International HRM (Björkman & Welch, 2015; Cooke, Wood, Wang, & Veen, 2019)
One may expect the particular local contexts will affect the transfer of HRM practices, we aim to examine whether an MNE from a newly industrialized economy in a competitive industry can overcome the legitimacy challenges in terms of “source” and “appropriateness” of the practices in such local contexts by mimicking and disseminating “best-practice” HRM policies
The interviewees at HQ explained that they thought transferring what had already been legitimized as leading practices in the United States would make it easier to persuade subsidiary employees to accept them, rather than exporting the current HRM practices used in the parent company
Summary
The transfer of human resource management (HRM) policies within multinational enterprises (MNEs) has been one of the most extensively researched themes in the field of International HRM (Björkman & Welch, 2015; Cooke, Wood, Wang, & Veen, 2019). This tendency, widely known as the “country-of-origin effect,” is well documented in the cases of MNEs from developed economies (Almond et al, 2005; Ferner, Almond, & Colling, 2005; Pudelko & Harzing, 2007). There is increasing evidence that businesses from lately industrialized or less advanced economies (emerging economy MNEs, or EMNEs) may be reluctant to transfer parent company policies. Instead, they tend to “borrow” and transfer HRM policies sourced from a dominant economy, most typically the United States—often seen as the home of “global best practices”. Subsidiaries in advanced economies are set up in a polycentric and adaptive approach precisely for the capture and diffusion of such global best practices (Patel, Sinha, Bhanugopan, Boyle, & Bray, 2018), but the mimicry widely involves dominance effects that are diffused globally through multiple channels (Edwards et al, 2013)
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