The HRM Strategy of US MNCs operating in South Asian Developing Countries-Comprehensive study in Bangladesh

The paper is to IDENTIFY the US MNCs OF Asian countries and Bangladeshi companies’ HRM Strategy practices. A firm’s performances depend on managers and employee of the organization. We have selected Sample of 100 US MNCs and 200 Bangladeshi local companies. Based on the questionnaires this research will identify the current scenario of company and its effect on South Asian countries. The findings are US MNCs and Bangladeshi companies performance based on the HR practices and HR strategy conditions and found US MNCs are better performer than Bangladeshi companies. There is a positive relationship between each variable. In this report we deal with Human Resource Management practices across borders and adjust their HRM practices to traditional local ones, as opposed to importing home country practices. In the light of an increasingly globalize world economy, HRM has evolved from a support function to a strategically important function. HRM is increasingly viewed as a crucial component of the firm’s overall corporate or business strategy. This study makes five degree of Literature and Sample questionnaires and the results of an empirical study designed to the test of five Hypotheses. The Systems view of HRM and HRM recourse view of the firm performance. Here we discuss about the union management strategy, compensation strategy, Training and Development strategy, Stock ownership strategy and Information sharing strategy and all these combined effect on gaining sustainable competitive advantage in South Asian companies based on the US MNC’s and Bangladeshi organizations. According to the description of the given project, it is found that there were many problems in Bangladeshi organizations. To find out the ways through which Bangladeshi organizations can eliminate their conflicts and cooperate so that the employees are provided with benefits and financial assistance, which will make them more satisfied with their jobs as well as increase productivity, which will ultimately be valuable to gain a sustainable competitive advantage. Bangladeshi organizations need to improve management style, internal communication style, empowerment style, development process, cultural myopia, revised recruitment policy, performance based benefits program, revised succession planning, training to the managers.

The decades of the 1980s and the 1990s witnessed an upheaval in economic thinking and brought about major societal changes. Firms entered a more dynamic world of international business with globalization of world markets, marked by the emergence of new international business blocs and economic liberalization of most developed and emerging economies. The dramatic surge in market reforms throughout the developing world meant that more than seventy-five developing and post-socialist economies, with a combined population of more than three billion people aimed at integrating themselves into the global market system. Dozens of these economies in Asia, Latin America and central Europe have succeeded in attracting large flows of capital, and, most strikingly, more than thirty countries have succeeded in establishing stock markets capable of attracting international portfolio investments. These changes have had profound implications for the entire world economy and are leading to a reallocation of global savings and investment. These changes have propelled the most dynamic of the reforming countries into unprecedented levels of sustained economic growth and reshaped global capital markets by introducing new opportunities for both portfolio and direct foreign investment.

Over recent years, there has been a growing body of research on the impact HRM practices of Multinationals (MNCs) operating in hosts countries. The economic reforms have attracted foreign direct investment and MNCs which are more interested in managing their investments through cost, quality or innovation. Bangladeshi organizations face a number of challenges, the most important being – to make the best use of their existing human resources and compete on the basis of innovative HRM practices.

There are a good numbers of US MNCs operating in developing countries, South Asia. To some extent these MNCs are found to be more successful or efficient than the local companies. This study focuses on HRM practices of the US MNCs operating in Developing countries. This research will also identify which HRM strategy is most effective in gaining comparative advantage that is followed by the US MNCs in south Asian countries.

This research is important as more MNCs from developed economies are entering the emerging economies, which is creating a great pressure on the local firms. Therefore, from this research the locals industries can know which HRM strategy they should practice to gain sustainable competitive advantage.

The organization of our paper is as follows. First, we identify and compare HRM practices of US MNCs in Asian countries and that of in Bangladesh. Second, we describe the research method used to identify HRM practices used by US MNCs. Third, we analyse the results of the survey. Last, the paper concludes with a discussion of how our findings relate to existing research and provide suggestions for related future research.