|Type of paper:||Essay|
|Categories:||Human resources Multiculturalism Organizational behavior Business management|
The transfer and diffusion of human resource management are becoming increasingly popular with the increase in the operations of multinational corporations. The removal of human resource practices has a significant influence on the activities of multinational corporations. Due to the continued growth of multinational corporations and the unparalleled growth of its foreign subsidiaries, the organization needs to employ the most effective human resource management practices in its operations across the world. This is necessary due to the need to incorporate proven and effective methods for subsidiary companies to achieve and sustain competitiveness. Based on existing literature, this research contributes to the research on transferring HR practices to subsidiary companies in host countries and the influence of institutional regulations, which are defined by Scott (2001) as regulatory, normative, and cultural-cognitive pressures (Stankey, Clark, and Bormann 2017 p 3).
The following research question is developed to help accomplish the purpose of the study: What is the role of institutions in the relocation of human resource practices from one country to another? The multinational environment has many conflicts affecting the development of human resource systems. These conflicts arise from the dilemma in the organizational structure of Multinational Corporations. This paper aims to examine the concepts of institutional theory citing various examples and how institutions affect transfer practices both negatively and positively.
Institutions are an essential aspect of the operations of global businesses, and in this case, the multinational corporation. The principles govern the relations between shareholders and stakeholders. They are established to pursue particular organizational endeavors, such as the practices of human resource management. Institutions regulate the terms and activities developed by law following acceptable terms and conditions. It is created by companies to pursue a particular agenda that is valuable to the organization. This case study overlooks the use of institutions in the research of the transferal of human resource practices between home and host countries. The applications of institutions in organizations are significant by examining the relationships between social interactions and informal constraints like norms and culture. Formal constraints of subsidiary countries such as rules and regulations and how human resource practices operate could be useful in determining the role of institutions in multinational corporations. Old intuitionalism focuses on the political aspect of the government. The new institutionalism approach focuses on the social effects of institutions in society (Brewster, Mayrhofer and Farndale 2018, p 23)
Institutional theory in human resource management applies to the fields of economics, sociology, and organizational practices. Organizations started recognizing the applicability of institutional theory to human resource practices in the 1990s (Brewster, Vernon, Sparrow, and Houldsworth 2016, p 1). The institutional theory applies in the analysis of multinational corporations. The characteristics of the methods and transfer are examined to determine the relevance of the study. The practice transfer must involve the use of a more strategic approach that focuses on techniques that work in multinational banks of Tanzania. Organizations use this to develop a competitive advantage rather than focusing on the disadvantages it brings to Multinational corporations. Transferal of human resource practices from home country to host countries is essential in providing a framework to examine strategic opportunities for many reasons. In Tanzania, the home country of Standard Chartered Bank is in South Africa. First, from the cognitive and domain dimensions, it is crucial to focus on a specific field rather than universal measures in examining the institutional environments of various countries. Second, the human resource institutions of multiple countries are heavily regulated hence the broader institutional context to study. Lastly, human resource practices reflect the company's knowledge that can determine the competitive advantage that is appropriate in improving performance.
The case study focuses on two multinational banks in Tanzania, Citibank, and chartered banks. The organization of the banks focuses on providing monetary services to foreign clients in the mining and construction of sectors in Tanzania. The banks are similar in many ways. They are from countries whose economies are broad with little government intervention on the economy. They are, however, different in how they manage their operations; the banks focus on supporting the client's growth. Technology is being employed to enhance client experiences through the reinforcement of digital practices. The banks provide both financial aids to both small and large enterprises.
A comparison of two global multinational corporation banks, Citibank, an American bank, and Standard Bank, a South African bank was made (Popescu 2016 p 74). An examination of how each supports its human resource practices and strategies with its notion of institution theory aiming at strengthening its ability to secure, appropriate investment from its human resources. Both banks claim to apply the use of 'best practices' by relying on healthy global strategies to manage clients. However, there was evidence of a complex set of measures in the way each bank advanced its organizational practices and procedures.
This study provides an opportunity to examine the challenges faced by multinational organizations in managing global operations and the influence of technology (Monshipouri, Welch and Kennedy 2017, p 3). There are many ethnic groups in Tanzania. Despite the cultural diversity represented by the tribes, they are all united by the use of the Swahili language. The Tanzanians have strong feelings of national cohesion, and this contributes to the ability to resolve conflicts without resorting to violence. This has ensured the continuous peaceful coexistence of the people of Tanzania. Peace in the country promotes business operations without fear of interruption due to conflicts. Tanzania and South Africa are similar in several ways and mainly correlate due to several attractions sites in both countries. The countries, however, experience different climatic conditions that influence the economy of the countries/.
Tanzanian education system operates in the 7-4-2-3 order. It starts with seven years in primary school, followed by four years in secondary school and two years at an advanced level. After an advanced degree, one can attend college for three to four years. Despite Kiswahili being the national language of Tanzania, English and maths are also taught in primary schools. Subjects in secondary schools are only shown in English. The political system of Tanzania comprises a national assembly that consists of 295 members that legislate on matters affecting the state. Tanzania has developed accurate and timely labor practices that help in examining employment performance in the economy. Institutions are supporting the government to establish strategies that track labor market progress by using market indicators. The government is working to support institutional frameworks at national and regional levels. The Tanzanian laws on labor protect all professionals and non-professional workforces within employment units
Some of the human resource practices of banks in Tanzania include compensation practices, which are mainly localized. They mostly consist of fixed salaries and allowances. Factors influencing compensation packages to multinational banks in Tanzania include regulatory requirements and prevailing economic conditions. Employee relations of the banks are also localized and highly regulated by the labor acts of Tanzania. This affects the implementation and transfer of some human resource practices from the home country to subsidiary countries. Talent management in Tanzania involves developing employee skills locally by managers. recruitment and selection in multinational banks of Tanzania were made from the headquarters, which ensures that only skilled personnel are selected.
Examination of the way multinational corporations' knowledge support regimes rise and become deliberated at the administrative level. The idea of regulation, in particular, enables investigation and the application of corporate controls and the allegation about the safety offered to employees in the Tanzanian banking sector ( Nandonde and Sachs 2017 p 132)To attain these objectives, they must ensure their workforces focus their attention on actions that promote organizational success. Citibank also affected an organized performance regulation and evaluation system to provide a mechanism for ongoing response and growth (Sultana 2018 p 34). Citibank followed a production record each year to determine the growth of each of its employees to assess their performance.
Human resource practices of Standard Chartered Banks have led their company to gather the most talented workforce through extensive hiring programs (Anwar 2015 p44). It involves high corporate procedures of training and mentoring new employees to enhance further and develop their skills upon engagement. Training enables managers to distinguish the specialization of different employees equipped with trends in banking and the financial sector (Ngunjiri 2015, p 155). Optimization of employees has been allowed through the use of technological practices.
Findings suggest that the institutional environment of countries with subsidiary companies could be a barrier to the transfer of human resource practices. The barriers pose various challenges for Multinational corporations in the implementation of the methods. Business scholars have focused on identifying the characteristics at the country level of the environments of host countries. It shows that the higher the distance between the institutional contexts of host countries and the home of the multinational corporation, the more the difficulty of transferring organizational practices. I feel that the research focuses on determining barriers that may hinder the success of the operational strategies during the transfer of human resource practices. While institutional theory emphasizes the challenges arising from institutional distances and differences between home and subsidiary companies, the problems have been overlooked.
Anwar, A., 2015. A Comparative study of cash management operations of Standard Chartered Bank.
Brewster, C., Mayrhofer, W. and Farndale, E. eds., 2018. Handbook of research on comparative human resource management. Edward Elgar Publishing.
Brewster, C., Vernon, G., Sparrow, P. and Houldsworth, E., 2016. International human resource management. Kogan Page Publishers.
Mchomba, D.A., 2018. The Impacts Of Electronic Banking On Customer Satisfaction In Tanzania Banking Industry: The Case of NMB Bank (Doctoral dissertation, The Open University of Tanzania).
Monshipouri, M., Welch, C.E. and Kennedy, E.T., 2017. Multinational corporations and the ethics of global responsibility: Problems and possibilities. In Human Rights and Corporations (pp. 123-147). Routledge.
Nandonde, F.A. and Sachs, P.R., 2017. Commercial bank corporate social responsibility practices in Tanzania. In the Dynamics of Corporate Social Responsibility (pp. 167-185). Springer, Cham.
Ngunjiri, J.M., 2015. The standard credit reference bureau and the performance of multinational banks operating in the East African community.
Popescu, G.H., 2016. The role of multinational corporations in global environmental politics. Economics, Management, and Finance.
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