Research Paper on HRM Practices

The following essay is an analysis of the research paper “Influences on Human Resource Management Practices in Multinational Corporations” written by Philip M. Rosenzweig and Nitin Nohria and published in the Journal of International Business Studies; 1994 2nd Quarter, Vol. 25 Issue 2, p.229-251. The purpose of the article was to acquire a deeper insight into those forces that determine and condition specific HRM practices in MNC subsidiaries and the main research question was to find out what those forces were. The body of the essay describes the design of the study, the research method, the variables and what was measured, tells how many subjects were involved, what they did, and where the research was conducted.

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The study starts with a theoretical discussion and research hypotheses followed by the description of the methodology. Then, the results of the empirical research are presented (including tables and figures) and conclusions are drawn. The researchers used a scientific method based on a number of theoretical assumptions which were then tested by analysing empirical data. The data were collected by the means of a HRM practices questionnaire distributed among a large number of affiliates. To obtain comparable data and make the wording of the questions the most adequate and precise, the researchers solicited the assistance of four affiliate managers who acted as pilots. The research was conducted in the U.S. and comprised the MNC affiliates of the most represented two-digit SIC industries and parent countries. The former included Food Products, Printing and Publishing, Primary Metals, Fabricated Metals, Industrial Equipment and Computers, Electrical Equipment and Electronics, Transportation Equipment, Instruments, Wholesale Trade-Durables and Depository Institutions. The most represented parent countries were Canada, France, Germany, Japan, Netherlands, Sweden, Switzerland and Britain. Out of 1,055 distributed questionnaires 249 were fully completed and thus served as valid comparable research sources. The respondents were asked to judge HRM practices in their affiliates and to compare them to HRM practices in the parent company and local companies on a 5-point scale. Six different HRM practices were identified as the research subject, namely the extent of employee benefits, the amount of annual paid time off, use of bonuses in executive compensation, participation in executive decision making, gender composition and the amount of employee training. Such factors as founding (greenfield or acquisition), the extend to which an affiliate depended on local inputs, the intensity of communication with the parent, the culture of the latter and its orientation towards control, the pressure from local institutions and governments, the nature of the industry (multidomestic versus global)and several others were used as independent variables.

The major findings of the research confirmed its main assumptions. First, the six HRM practices adopted by affiliates were significantly closer to local practices than to parent practices. Secondly, those HRM practices for which there existed well-defined local norms and legislation (Time Off, Benefits, Gender Composition) resembled more local practices, whilst HRM practises that had to do with executives, decision making and/or were crucial for internal consistency tended to follow more parent practices (Executive Bonus and Participation). Moreover, it was found that certain variables influenced the extent to which affiliates adopted local practices: those founded by acquisition and dependent upon local inputs resembled more local companies, whilst those which kept close communication with their parent and had a high percentage of expatriates followed more HRM practices of their parents. Finally, the research showed certain differences as to parent nationality: American and Canadian HRP were quite similar, Japanese affiliates adhered least to U.S. practices, and German and Swedish affiliates demonstrated the greatest divergence form their parents.

The research yet had its shortcomings of which the authors were fully aware and which they also acknowledged. The authors were conscious of the fact that the results of their study might well not hold for other countries.

Despite its shortcomings, the article is still valuable for its findings. It is especially useful for Americans as it allows them to scientifically compare their HRM practices to those in other countries. Two important findings can be learned from the article. First, HRM practices in MNC affiliates are shaped by different forces and influences. Secondly, although not coerced to do so, in general affiliates tend to adopt local HRM practices.

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