The Reasons for Transfering the Home-Country Human Resource Management Term Paper

The Reasons for Transfering the Home-Country Human Resource Management Policies to the Overseas Subsidiaries by Organizations - Term Paper Example The most common reason for the transfer of home-country human resource management policies to overseas subsidiaries is the need for organizations for promoting homogenous policies in all their sectors so that conflicts and failures are minimized. Such issue is highlighted in the study of Wilton (2010) where reference is made to the example of Japanese firms that had to establish branches and operational units abroad. Japanese firms tend to promote team working and task sharing; however, after entering the US market the Japanese firm had to align their HRM strategies with the US laws and ethics (Wilton 2010). In order to avoid conflicts with local laws and culture, the Japanese firms transformed their HRM policies promoting ‘task demarcation and functional specialization’ (Wilton 2010, p.141). From a similar point of view, Sparrow (2009) notes that firms may choose to transfer their home-country human resource management policies to their overseas subsidiaries in order to reduce costs related to training of new employees. Such perspective can be valuable only if the time during which the home country HRM policies are used in the overseas subsidiary is limited; if such practice is continued for a long period of time, then the cost involved would be much higher compared to the development of new HRM policies, aligned with the local culture. This means that expatriates who are sent to work to overseas subsidiaries for supporting the transfer of their firm’s HRM policies to these units should be given a time framework for finishing their tasks. On the other hand, it is perceived that the promotion of policies, which have been already tested in the home country, should be preferred (Stahl and Bjorkman 2006). Introducing new policies is always risky, especially if taking into consideration the physical distance between the mother company and its subsidiaries (Stahl and Bjorkman 2006). Most important, the HRM policies developed in the home country a re fully aligned with the organization’s mission and values (Stockhammer 2011).