Korea’s 419 MCN Subsidiaries
Korea’s 419 MCN Subsidiaries
Article summary
This article was based on the 1999 data obtained from Korea’s 419 MCN subsidiaries. It examines the extent to which MCN acclimatize to the local practices in their strategy for HRM/IR, as well as extend to which MNCs impose home countries’ HRM/IR practices to their subsidiaries. Three conceptual generic HRM/IR strategies were identified. There were mixed strategy, localization, and transplantation. The principle objective of the study was finding the factors that determine the choice of strategies of HRM/IR by the MNC. Particularly, it examines the effect of origin country in the choice of the strategies.
A multi-nominal logit analysis indicated that the origin country does not play a noteworthy part in choosing of transplantation strategy in comparison with other strategies. Similarly, other situational factors like motive of investment, industry, and foreign management team are significantly related to that choice. Situational factors force MNCs to choose the strategy of transplantation. It has various adverse side effects on industrial relations of foreign subsidiaries. However, though, with various challenges, there are MCNs which have chosen transplantation strategy.
The origin countries influence the choice between mixed strategies and localization. The extent to choose for localization strategy is stronger in Japanese MCN than in European or North American MNCS. The study indicated that Japanese are mostly Particularists while Americans are Universalists, and Europeans lie between them. Particularist is the tendency of encouraging flexibility by adaptation of certain situations while Universalism implies the application of procedures and rules collectively to guarantee consistency and equity.
The study never compared the disparities in HRM and IR choice between the European countries. This is because European countries are composed of countries that are culturally different, and grouping then in one category weakens the findings’ validity. Nonetheless, the European cases number is not adequate to examine the different European countries.
Reference
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