Theoretical Review of Critical Factors that Impact on Global Human Resource Practices: Case on Multinational Companies in Emerging Economies

Abstract

Purpose

The aim of this review paper is to critically analyse those factors which influence upon the way human resource practices are worked-out in MNCs particularly those that operate in emerging markets like China & India. These factors comprises internal factors and also external factors that play their pivotal role in shaping the said HR practices like recruitment & selection, compensation, remuneration, training and development, etc. and therefore these determinants if truly taken into consideration by multinational corporations increase the likelihood of success that these companies know better ways in order to attract, develop and retain employees that keep potential, skills and capabilities with them. For firms whose strategic focus is on its employees do prosper and can earn competitive advantage against their counterpart even if they are operating in developed countries. Hence, in order to highlight those critical determinant/factors the conceptual framework completed by Mohan Thite, Adrian Wilkinson & Dhara Shah on the reserach subject of internationlization and Human resource strategies in MNCs of emerging markets. After having gone through the literature we come to know that the conceptual framework keeps some gaps in itself and doesn’t include other important and critical factors which have been proposed by our research in form of extented concpetual framwork like for instance, strategic role of HR department, high performance work system (HPWS), corporate social responsibilty and its link with HR practices and many more.

Value

This research keeps significance for those MNCs which operate in emerging markets. Despite the fact that stiff competition, advance technological interventions, globalizaiton have made very much difficult environment for MNCs to earn success in form of competitive advantage in the industry, companies can lead from the front if they manage to utilize their workforce potential in the right direction. To achieve this end companies will have to deliberate upon internal and external factors that exert influnce over their HR practices as it is well known to everyone that if organizaitons want to gain competitive or even comparative advantage they need to take their human resource as a strategic asset not merely as an input for work process.

Conclusion

It has been concluded that if MNCs really want to outperform in emerging markets those should have to take all concerned critical factors into consideration which are significant for bringing success to them in form of outcomes that are to be generated by capable workforce MNCs have got with them. Thus, all depends on the way MNCs attract, develop and retain their human resource which is composed of diversity and get affected by multifarious challanges and from the organizational point of view it gives glimpse to the solution of problems that arise from forward or reverse diffusion to MNCs.