Global Integration Versus Local Adaptation of HR Practices by Multinationals

Citation

Shi, Miao. (2023). Global integration versus local adaptation of HR practices by multinationals. (Master’s independent study). Bangkok: Siam University.

Abstract

International business experts believe that the successful transfer of HR practices and knowledge of multinational companies depends on their ability to adapt to the local business environment, helping multinational entrepreneurship to maximize entrepreneurial performance on a global scale. Others have a different view, arguing that the effectiveness of internationalization lies in creating a situation of global integration, and transnationality is just a transfer process that is not easy to achieve. While many researchers have paid great attention to both approaches, little is known about linking the two perspectives. Therefore, the purpose of this article is to determine the effectiveness of globalization and how it relates to global business strategy. The objectives of this study were 1). To investigate the effectiveness of the global integration situation linked to the global business structure and strategy of multinational corporations. 2). To effectiveness testing of local adaptation based on multi-domestic strategies and structures. 3). To explore the best strategic recommendations when implementing globally integrated and locally adapted HR practices among multinational companies.

This study used documentary method, theory of corporate social responsibility and contract theory as the theoretical basis. In order to clarify the research theme of this paper, this paper first summarized and studied the existing research on the integration of transnational corporations, proposed the shortcomings of “focusing on strategy, ignoring implementation, focusing on factors, and ignoring process” in the current research, and comprehensively combed and summarized the relevant literature, focusing on its impact results, Furthermore, the paper proposes to adopt the perspective of knowledge transfer, regard the integration process as the process of knowledge transfer, and explains the integration issues under this perspective, puts forward the specific content and ideas of the paper, and constructs a more comprehensive and systematic research conceptual framework according to the four elements of knowledge transfer, namely, the knowledge sender’s parent company, the knowledge receiver’s subsidiary, the transferred content and knowledge and transfer methods. The main finding is that the global global integration of HR practices enables parent companies to assign functions to expatriates while still wielding influence. This approach allows for cooperation and collaboration. Local responsiveness, on the other hand, refers to the adaptation of MNC business operations to local conditions. Adaptation is primarily influenced by local or environmental conditions in foreign markets. Ideally, each subsidiary will experience differences in local consumer needs and behaviors, local competitors, supplier networks, and government regulations. In conclusion, it is important to have common systems in the parent company and subsidiary companies that interact with each other in accounting, marketing and allocating HR practices.

Keywords: global integration, local adaptation, internationalization, international human resource management, human resources.

lobal Integration Versus Local Adaptation of HR Practices by Multinationals

Master of Business Administration (International Program), Siam University, Bangkok, Thailand