Indian Multinationals in Developed Countries: A Case Study on Cultural Strategies

  • Roli Nigam
  • Zhan Su
Chapter

Abstract

Multinational firms from emerging economies have been steadily climbing up the success ladder and have emerged as challenging and strong global contenders. They have proved to be facilitators of globalization and several of them have hailed from emerging regions, including India and China, which have become important parts of today’s globalized economy. The rapid rise of emerging economies and their multinational firms has opened up many opportunities, as well as raised many challenges (Singh, 2012; Marinov and Marinova, 2014). It has been pointed out time and again that this subject lacks systematic research and is far from mature (Goldstein, 2005; Aulakh, 2007). Moreover, the extant literature is largely focused on the perspectives of Western multinationals (Almond, Edwards, Colling, Ferner, Gunnigle, Mueller-Camen, Quintanilla and Waechter, 2005; Gamble, 2003; Edward and Ferner, 2004; Farley, Hoenig and Yang, 2004; Chen, Lawler and Bae, 2005). There is a gap in research on multinationals from emerging economies (MEEs), since extant research has rarely examined management practices of MEEs in their subsidiaries in developed countries (Chang, Mellahi and Wilkinson, 2009). Since this is a more recent phenomena, it has attracted insufficient research (Sim and Pandian, 2003; Sim, 2006; Aulakh, 2007), and even less in the case of Indian multinational firms. The different perspectives of these multinationals are important as they have adopted unique management styles (Bruton and Lau, 2008).

Keywords

Human Resource Management Multinational Corporation Parent Company Cultural Adaptation Performance Appraisal 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
This is a preview of subscription content, log in to check access.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Almond, P., Edwards, T., Colling, T., Ferner, A., Gunnigle, P., Mueller-Camen, M., Quintanilla, J. and Waechter, H. (2005). Unraveling home and host country effects: An investigation of the HR policies of an American multinational in four European countries. Industrial Relations, 44(2): 276–306.Google Scholar
  2. Amba-Rao, S. C., Petrick, J. A., Gupta, J. N. D. and Von der Embse, T. J. (2000).Google Scholar
  3. Comparative performance appraisal practices and management values among foreign and domestic firms in India. International Journal of Human Resource Management, 11(1): 60–89.Google Scholar
  4. Aulakh, P. S. (2007). Emerging multinationals from developing economies: motivations, paths and performance. Journal of International Management, 13(3): 235–240.CrossRefGoogle Scholar
  5. Aycan, Z. (2005). The interplay between cultural and institutional/structural contingencies in human resource management practices. International Journal of Human Resource Management, 16(7): 1083–1119.CrossRefGoogle Scholar
  6. Aycan, Z., Kanungo, R. N. and Sinha, J. B. (1999). Organizational culture and human resource management practices: The model of culture fit. Journal of Cross-Cultural Psychology, 30(4): 501–526.CrossRefGoogle Scholar
  7. Aykut, D. and Goldstein, A. (2007). FDI in the oil sector. Mimeo, DECPG International Finance Team, Washington, DC: World Bank and OECD Development Centre.Google Scholar
  8. Bachor, D. G. (2000). Case study reports. Paper presented at the Australian Association for Research in Education, June, Sydney, New South Wales, Australia.Google Scholar
  9. Bartlett, C. A. and Ghoshal, S. (1989). Managing Across Borders: The Transnational Solution. Boston, MA: Harvard Business School Press.Google Scholar
  10. Berman, J. J., Murphy-Berman, V. and Singh, P. (1985). Cross-cultural similarities and differences in perceptions of fairness. Journal of Cross-Cultural Psychology, 16(1): 55–67.CrossRefGoogle Scholar
  11. Berry, J. W. (1980). Social and Cultural Change. In H. C. Triandis and R. W. Brislin (eds.), Handbook of Cross-Cultural Psychology, Vol. 5, Boston, MA: Allyn and Bacon.Google Scholar
  12. Birkinshaw, J. (2000). Strategy and management in MNE subsidiaries. In A. Rugman and T. Brewer (eds.), Oxford Handbook of International Business, New York, NY: Oxford University Press, pp. 380–401.Google Scholar
  13. Björkman, I. and Budhwar, P. (2007). When in Rome …?. Employee Relations, 29(6): 595–610.CrossRefGoogle Scholar
  14. Björkman, I. and Lervik, J. E. (2007). Transferring HRM practices within multinational corporations. Human Resource Management Journal, 17(4): 320–335.CrossRefGoogle Scholar
  15. Bjorkman, I. and Lu, Y. (2001). Institutionalization and bargaining power explanations of human resource management practices in international joint ventures: The case of Chinese western joint ventures. Organization Studies, 22: 491–512.CrossRefGoogle Scholar
  16. Björkman, I., Smale, A., Sumelius, J. Suutari, V. and Lu, Y. (2008). Changes in institutional context and MNC operations in China: Subsidiary HRM practices in 1996 versus 2006. International Business Review 17: 146–158.CrossRefGoogle Scholar
  17. Björkman, I., Stahl, G. K. and Vaara, E. (2007). Cultural differences and capability transfer in crossborder acquisitions: The mediating roles of capability complementarity, absorptive capacity, and social integration. Journal of International Business Studies 38(5): 658–672.CrossRefGoogle Scholar
  18. Bonaglia, F., Goldstein, A. and Mathews, J. A. (2007). Accelerated internationalization by emerging markets’ multinationals: The case of white goods sector. Journal of World Business, 42: 369–383.CrossRefGoogle Scholar
  19. Bruton, G. and Lau, C. M. (2008). Asian management research: Status today and future outlook. Journal of Management Studies, 45(3): 636–659.CrossRefGoogle Scholar
  20. Buckley, P. J., Devinney, T. M. and Louviere, J. J. (2007). Do managers behave the way theory suggests? A choice-theoretic examination of foreign direct investment location decision-making. Journal of International Business Studies, 38(6): 1069–1094.CrossRefGoogle Scholar
  21. Budhwar, P. and Boyne, G. (2004). Human resource management in the Indian public and private sectors: An empirical comparison. The International Journal of Human Resource Management, 15(2): 346–370.CrossRefGoogle Scholar
  22. Budhwar, P. and Sparrow, P. (2002a). An integrative framework for determining cross-national human resource management practices. Human Resource Management Review, 12(3): 377–403.Google Scholar
  23. Budhwar, P. S. and Sparrow, P. (2002b). Strategic HRM through the cultural looking glass: Mapping the cognition of British and Indian managers. Organization Studies, 23(4): 599–638.Google Scholar
  24. Business Today. (1995). (7–21 January). A survey of HRM in Indian Industries, 36–51.Google Scholar
  25. Chang, Y. Y., Mellahi, K. and Wilkinson, A. (2009). Control of subsidiaries of MNCs from emerging economies: The case of Taiwanese MNCs in the UK. The International Journal of Human Resource Management, 20(1): 75–95.CrossRefGoogle Scholar
  26. Chatterjee, S. R. (2007). Human resource management in India: “Where from” and “where to?” Research and Practice in Human Resource Management, 15(2): 92–103.Google Scholar
  27. Chen, J., Lawler, J. and Bae, J. (2005). Convergence in human resource systems: A comparison of locally owned and MNC subsidiaries in Taiwan. Human Resource Management, 44: 237–256.CrossRefGoogle Scholar
  28. Child, J., Faulkner, D. and Pitkethly, R. (2000). Foreign direct investment in the UK 1985–1994: The impact on domestic management practice. Journal of Management Studies, 37(1): 141–166.Google Scholar
  29. Chittoor, R. and Ray, S. (2007). Internationalization paths of Indian pharmaceutical firms — a strategic group analysis. Journal of International Management, 13: 338–355.CrossRefGoogle Scholar
  30. Colakoglu, S. (2012). Shared vision in MNE subsidiaries: The role of formal, personal, and social control in its development and its impact on subsidiary learning. Thunderbird International Business Review, 54(5): 639–652.CrossRefGoogle Scholar
  31. Cui, L. and Jiang, F. (2010). Behind ownership decision of Chinese outward FDI: Resources and institutions. Asia Pacific Journal of Management, 27(4): 751–774.CrossRefGoogle Scholar
  32. Dunning, J. H. (2000). The eclectic paradigm as an envelope for economic and business theories of MNE activity. International Business Review, 9(1): 163–90.CrossRefGoogle Scholar
  33. Edward, T. and Ferner, A. (2004). Multinationals, reverse diffusion and national business systems. Management International Review, 24(1): 51–81.Google Scholar
  34. Eisenhardt, K. M. and Graebner, M. E. (2007). Theory building from cases: Opportunities and challenges. Academy of Management Journal, 50(1): 25–32.CrossRefGoogle Scholar
  35. Engardio, P. (2007). CHINDIA: How China and India Are Revolutionizing Global Business. New York, NY: McGraw Hill.Google Scholar
  36. Farley, J. U., Hoenig, S. and Yang, J. Z. (2004). Key factors influencing HRM practices of overseas subsidiaries in China’s transition economy. International Journal of Human Resource Management, 15(4/5): 688–704.Google Scholar
  37. Ferner, A., Almond, P. and Colling, T. (2005). Institutional theory and the cross-national transfer of employment policy: The case of “workforce diversity” in US multinationals. Journal of International Business Studies, 36(2): 304–321.CrossRefGoogle Scholar
  38. Fischer, A. H., Mosquera, P. M. R., van Vianen, A. and Manstead, A. S. R. (2004). Gender and culture differences in emotion. Emotion, 4(1): 87–94.CrossRefGoogle Scholar
  39. Fisher, C. D. (2000). Mood and emotions while working: Missing pieces of job satisfaction? Journal of Organizational Behavior, 21: 185–202.CrossRefGoogle Scholar
  40. Gamble, J. (2003). Transferring human resource practices from the United Kingdom to China: The limits and potential for convergence. The International Journal of Human Resource Management, 14(3): 369–387.CrossRefGoogle Scholar
  41. Ghoshal, S. and Bartlett, C. (1995). Building the entrepreneurial corporation: New organisational processes, new managerial tasks. European Management Journal, 13(2): 139–155.CrossRefGoogle Scholar
  42. Goldstein, A. (2005). Emerging multinationals in the global economy: Data trends, policy issues, and research questions. Unpublished Paper, 22, Geneva, OECD Development Center.Google Scholar
  43. Hannon, J., Huang, I. C. and Jaw, B. (1995). International human resource strategy and its determinants: The case of subsidiaries in Taiwan. Journal of International Business Studies, 26: 531–554.CrossRefGoogle Scholar
  44. Hofstede, G. (1980). Culture’s consequence: International differences in work-related values. Newbury Park, CA: Sage Publications.Google Scholar
  45. King, D. R., Dalton, D. R., Daily, C. M. and Covin, J. G. (2004). Meta-analyses of post-acquisition performance: Indications of unidentified moderators. Strategic Management Journal, 25(2): 187–200.CrossRefGoogle Scholar
  46. Kogut, B. and Zander, U. (1993). Knowledge of the firm and the evolutionary-theory of the multinational corporation. Journal of International Business Studies, 24 (4): 625–645.CrossRefGoogle Scholar
  47. Kostova, T. and Roth, K. (2002). Adoption of organizational practices by subsidiaries of multinational corporations: Institutional and relational effects. Academy of Management Journal 45(1): 215–233.CrossRefGoogle Scholar
  48. Kumar, M. R. and Sankaran, S. (2007). Indian culture and the culture for TQM: Acomparison. The TQM Magazine, 19(2): 176–188.CrossRefGoogle Scholar
  49. Luo, Y. and Rui, H. (2009). An ambidexterity perspective toward multinational enterprises from emerging economies. The Academy of Management Perspectives, 23(4): 49–70.CrossRefGoogle Scholar
  50. Marchington, M. and Grugulis, I. (2000). “Best practice” human resource management: Perfect opportunity or dangerous illusion? International Journal of Human Resource Management, 11(6): 1104–1124.CrossRefGoogle Scholar
  51. Marinov, M. and Marinova, S. (2014). Successes and Challenges of Emerging Economy Multinationals. Basingstoke and New York, NY: Palgrave Macmillan.Google Scholar
  52. Marks, M.L. and Mirvis, P.H. (2010). Joining Forces: Making One Plus one Equal Three in Mergers, Acquisitions and Alliances. 2nd edn. San Francisco, CA: Jossey-Bass.Google Scholar
  53. Marks, M. L. and Mirvis, P. H. (2011). Merge ahead: A research agenda to increase merger and acquisition success. Journal of Business Psychology, 26: 161–168.CrossRefGoogle Scholar
  54. Mathews, J. A. (2006). Dragon multinationals: New players in 21st century globalization. Asia Pacific Journal of Management, 23(1): 5–27.CrossRefGoogle Scholar
  55. Meyer, K. E. (2006). Asian management research needs more self-confidence. Asia Pacific Journal of Management, 23(1): 119–137.CrossRefGoogle Scholar
  56. Ministry of Commerce and Industry. (2008). commerce.nic.in/publications/Report%20Tas%20Force%20Pharma%2012th%20Dec%2008.pdf?id=16. Accessed on 19 March 2012.Google Scholar
  57. Nahavandi, A. and Malekzadeh, A. R. (1988). Acculturation in mergers and acquisitions. Academy of Management Review, 13(1): 79–90.Google Scholar
  58. Nigam, R. and Su, Z. (2010). Climbing up the performance ladder: A conceptual framework for emerging country multinationals. International Journal of Business and Management, 5(4): 13–25.CrossRefGoogle Scholar
  59. Nigam, R. and Su, Z. (2011). Management in emerging versus developed countries: A comparative study from Indian perspective. Journal of CENTRUM Cathedra, 4(1): 122–134.CrossRefGoogle Scholar
  60. Nigam, R., Su, Z., Elaidaoui, N. and Karuranga, E. (2009). Subsidiaries of developed country multinationals in an emerging country: A cultural perspective. Global Journal of Flexible Systems Management, 10(4): 33–44.Google Scholar
  61. Pradhan, J. P. (2007). Growth of Indian multinationals in the world economy: Implications for development. MPRA Paper 12360, University Library of Munich, Germany.Google Scholar
  62. Pudelko, M. and Harzing A. W. (2007). Country-of-origin, localization or dominance effect? An empirical investigation of HRM practices in foreign subsidiaries. Human Resource Management, 46(4): 535–559.CrossRefGoogle Scholar
  63. Rao, A. S. (2007). Effectiveness of performance management systems: An empirical study in Indian companies. The International Journal of Human Resource Management, 18(10): 1812–1840.CrossRefGoogle Scholar
  64. Reiche, B. S., Lee, Y. T. and Quintanilla, J. (2010). Cultural perspectives on comparative HRM professional development workshop, Contribution presented at the 70th Annual Meeting of the Academy of Management, Montreal, Canada, 6–10 August.Google Scholar
  65. Rosenzweig, P. M. and Nohria, N. (1994). Influences on human resource management practices in multinational corporations. Journal of International Business Studies, 25(2): 229–251.CrossRefGoogle Scholar
  66. Sim, A. B. (2006). Internationalization strategies of emerging Asian MNEs-case study evidence on Singaporean and Malaysian firms. Asia Pacific Business Review, 12(4): 487–505.CrossRefGoogle Scholar
  67. Sim, A. B. and J. R. Pandian, J. R. (2003). Emerging Asian MNEs and their internationalisation strategies — Case study evidence on Taiwanese and Singaporean firms. Asia Pacific Journal of Management, 20(1): 27–50.CrossRefGoogle Scholar
  68. Smith, C. and Meiksins, P. (1995). System, society and dominance effects in cross-national organisational analysis. Work, Employment and Society, 9(2): 241–267.CrossRefGoogle Scholar
  69. Singh, D. (2012). Emerging economies and multinational corporations: An institutional approach to subsidiary management. International Journal of Emerging Markets, 7(4): 397–410.CrossRefGoogle Scholar
  70. Stone, D. L., Stone-Romero, E. F. and Lukaszewski, K. M. (2007). The impact of cultural values on the acceptance and effectiveness of human resource management policies and practices. Human Resource Management Review, 17(2): 152–165.CrossRefGoogle Scholar
  71. Takeda, M. B. and Helms, M. M. (2010). The paradox of agreement and similarity: How goal (in)congruence and physic distance may determine international human resource strategy success. International Journal of Human Resource Development and Management, 10(2): 101–116.CrossRefGoogle Scholar
  72. Tayeb, M. (1987). Contingency theory and culture: A study of matched English and Indian manufacturing firms. Organization Studies, 8(2): 241–261.CrossRefGoogle Scholar
  73. Von Glinow, M. A., Drost, E. A. and Teagarden, M. B. (2002). Converging on IHRM best practices: Lessons learned from a globally distributed consortium on theory and practice. Human Resource Management, 41(1): 123–140.CrossRefGoogle Scholar
  74. Wang, C. Y. P., Bih-Shiaw, J. and Huang, C.-Y. (2008). Towards a cross-cultural framework of strategic international human resource control: The case ofGoogle Scholar
  75. Taiwanese high-tech subsidiaries in the USA. The International Journal of Human Resource Management, 19(7): 1253–1277.Google Scholar
  76. Westney, D. E. (1993). Institutionalization theory and the multinational corporation, In S. Ghoshal and D. E. Westney (eds.), Organisational Theory and the Multinational Corporation. New York and London St. Martin’s Press, pp. 237–255.Google Scholar
  77. Woldu, B., Budhwar, P. and Parkes, C. (2006). A cross-national comparison of cultural value orientations of Indian, polish, Russian and American employees. The International Journal of Human Resource Management, 17(6): 1076–1094.CrossRefGoogle Scholar
  78. Zhang, A. Y., Tsui, A. S., Song, L. J., Li, C. and Jia, L. (2008). How do I trust thee? The employee-organization relationship, supervisory support, and middle manager trust in the organization. Human Resource Management, 47(1): 111–132.CrossRefGoogle Scholar

Copyright information

© Roli Nigam and Zhan Su 2015

Authors and Affiliations

  • Roli Nigam
  • Zhan Su

There are no affiliations available

Personalised recommendations