Report on Internationalization and HRM Strategies of Multinational Companies from Emerging Economies

The rapid rise of multinational Corporations (MNCs) from emerging economies has led to greater interest and urgency in developing a better understanding of the deployment and diffusion of managerial strategies from their perspective and without assuming the prevailing Western ethnocentric orthodoxy. This report develops a conceptual framework of global HR strategies and practices in MNCs from emerging economies across their subsidiaries in both developed and developing markets. It provides insights and guidance into the motives, strategic opportunities and constraints in cross national transfer of HR policies and practices in a multi-polar world.
Research on MNCs has tended to be focused on those from developed countries establishing subsidiaries either in other developed economies (e.g. U.S. to the UK) or into developing economies (e.g. the U.S.A into Latin America). U.S. firms invested in Europe from before 1939 but the major push came after World War Two (Ferner, Almond, Clark, Colling, Edwards, Holden, & Muller-Camen, 2004). Japanese MNCs began to locate in advanced economies, particularly in the 1980s. While, there has been a rich stream of MNC research in this area, there has been relatively less research on newer industrialized (e.g. Taiwan, India and South Korea) to the more industrialized economies (Glover & Wilkinson, 2007, p.1438). This is a new era which is often referred to as a ‘new geography of investments’ (UNCTAD, 2004). Whilst most MNCs come from the world’s top five economies, a growing number are from developing and newer industrialized economies. UNCTAD categorizes developing economies into two groups - South Korea, Taiwan and Singapore who are newer industrialized and have an established track record as outward investors and those such as India and China that are rapidly developing.

In this paper, I widen the horizon of International HRM to include HRM strategies and practices from emerging economies. The purpose of the paper is to explore how HRM strategy of the MNCs in emerging economies is formed and how it operates in practice. First, I have outlined the issues relating to emerging MNCs. Second, I have developed a conceptual framework of global HR strategies and practices in MNCS from emerging economies. This provides managerial insights and guidance into the motives, strategic opportunities and constraints in cross national transfer of HR policies and practices. It uses the data from the pilot study of an Indian multinational company to test the conceptual framework and propositions. The paper concludes with a discussion of how our findings relate to existing research and identify directions for future research.