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Human resource management: The creation of balance between standardization and localization in multinational firms

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  1. Introduction.
  2. Theoretical background.
  3. Factors driving localisation.
  4. Factors driving standardisation.
  5. Conclusion.
  6. Bibliography.

International human resource management systems remain as challenging as ever for many multinationals throughout the world. ?The challenge of many multinationals is to create a system that operates effectively in multiple countries by exploiting local differences and inter dependencies while at the same time sustaining global consistency? (Dowling, Festing and Engle 2008, p. 208). The need to establish consistencies between the local standards and worldwide standardized HRM practices is increasingly becoming a prerequisite requirement for multinational firms (Featherstone, 2003). Local differences and inter dependencies are mainly determined by local cultures while worldwide standardized practices are determined by globalization forces which, of course, are west driven. The underlying challenges of human resource management systems in different countries are defined by cultural differences (Holfstede, 1991).

[...] In Taylor's model, time and motion studies were used to maximise efficiency and productivity through payment for results, with little regard being given to the potential influence or significance of human factors upon work performance. However, Tyson (2006) warns that ?such assumptions inevitably have fundamental effect upon organisational management styles and environment as well as the working arrangements and methods of organisations. Factors Driving Localisation It is very important for any multinational firm seeking to create a system that operates effectively in multiple countries to exploit the local differences in tandem with the cultural aspects of specific target countries. [...]

[...] Conclusion The management models and patterns of the developed western society that are based on the formation of democratic and stable institutions may not always be applicable to other societies in the process of organisational management. It is evident that different countries may progress through different models of management systems. Therefore, standardized HRM practices may not hold the key to providing the ultimate solutions to the human resource management dilemma that multinational corporations face. Standardisation of management systems is a concept that is heavily influenced by liberalism and yet, the complications introduced by the multiplicity of cultural values can never be ignored. [...]

[...] In order to create opportunities for collaboration, multinational firms must learn not only the customs, courtesies, and business protocols of their counterparts from other countries; they also need to understand the national character, management conceptions and mindsets of these people. The proper understanding of the influence of different management systems in the contemporary global system can be gained through a thorough understanding of various social historical ideas, traditions and theoretical models. Theoretical Background The theoretical background for human resource management systems is captured by both classical theories and contemporary theories. [...]

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