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South Korean MNEs’ international HRM approach: Hybridization of global

standards and local practices

Article  in  Journal of World Business · October 2014

DOI: 10.1016/j.jwb.2013.12.008

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 Cite: Chung, C., Sparrow, P., & Bozkurt, Ö. (2014). South Korean MNEs’
international HRM approach: Hybridization of global standards and local practices.
Journal of World Business, 49(4), 549-559.

South Korean MNEs’ International HRM Approach: Hybridization of

Global Standards and Local Practices

Chul Chunga1*, Paul Sparrowb2, Ö dül Bozkurtc3

a
Henley Business School, University of Reading, Whiteknights, Reading, UK RG6 6UD
b
Lancaster University Management School, Lancaster, UK LA1 4YX
c
Department of Business and Management, University of Sussex, Falmer,
Brighton, UK BN1 9QF

1
Assistant Professor; Email: c.chung@henley.ac.uk; Phone: +44 (0)1183 787751, Fax: +44
(0)1183 784029
2
Professor; Email: p.sparrow@lancaster.ac.uk; Phone: +44 (0)1524 510911
3
Senior Lecturer; Email: o.bozkurt@sussex.ac.uk; Phone: +44 (0)7748 297948
*
Corresponding Author
 ABSTRACT

This paper analyses the international Human Resource Management (HRM)

approaches of Korean Multinational Enterprises (MNEs). Through a study of nine

major Korean MNEs' approaches to subsidiary-HRM, it is argued that the firms

pursue hybridization through a blending of localization and global standardization

across detailed elements in five broad HRM practice areas. Local discretion is

allowed if not counter to global HRM system requirements and “global best

practices” used as the template for global standardization of selected HRM

elements. This strategic orientation appears to be part of a deliberate response to

the “liabilities of origin” born by firms from non-dominant economies.

Key words: international human resource management, Korean multinational

enterprises (MNEs), hybridization, liability of origin

2
Introduction

Over the last two decades, the issue of the global standardization versus

localization of subsidiary-HRM practices has been a central debate in the

literature on human resource management (HRM) of multinational enterprises

(MNEs) (Festing, Knappert, Dowling & Engle, 2012; Pudelko & Harzing, 2007).

Extant research on the issue has mainly focused on MNEs based in developed

economies such as the U.S., European countries, and Japan (Thite, Wilkinson, &

Shah, 2012). Recently, there has been a growing interest in various aspects of the

activities of a “second wave” of MNEs from emerging economies (Bonaglia,

Goldstein & Mathews, 2007) such as,Brazil, China, India, Mexico and Russia as

they grow in number and size. As attention shifts to emerging markets, there are

important research questions that should be investigated, particularly in MNEs

from newly industrialized economies (e.g., South Korea, Singapore, and Taiwan).

Although the size of newly industrialized economies is smaller than that of major

emerging economies, foreign direct investment (FDI) from newly industrialized

economies is still growing, and unlike MNEs from emerging markets, there are a

significant number of MNEs from among these that occupy leading positions in

their global markets (UNCTAD, 2006; Filatotchev, Strange, Piesse, & Lien,

2007).

This study explores South Korean MNEs’ approach to subsidiary-HRM

practices. Research on Korean MNEs could have implications to wider groups of

MNEs. Firstly, Korean MNEs compete successfully in global markets against

MNEs from developed economies and they are widely considered to be exemplars

of successful MNEs from newly industrialized economies (UNCTAD, 2006).

Some Korean MNEs are large, with a wide geographical reach in multiple

subsidiary locations around the world and in leading positions in their respective
3
sectors. In other words, these MNEs resemble and therefore are directly

comparable with their counterparts based in developed economies in terms of size,

global presence, and position in the global market. Secondly, at the same time, as

their home country lacks a dominant status in the world economy, they might

experience a “liability of origin,” which refers to the distinctive challenges or

disadvantages stemming from their national origins (Bartlett & Ghoshal, 2000;

Glover & Wilkinson, 2007; Chang, Mellahi, & Wilkinson, 2009; Ramachandran

& Pant, 2010; Chung, Bozkurt, & Sparrow, 2012). Hence understanding the

current state of their international HRM reveals insights, not just for subsequent

cohorts of MNEs from newly industrialized economies and emerging markets, but

also for the general domain of contemporary MNEs in general. We argue it is

particularly important to see whether South Korean MNEs adopt a distinctive

approach to subsidiary-HRM practices, which may call into question the current

dominant assumptions about HRM strategy and practice in MNEs, as these

assumptions are predominantly informed by what is known about MNEs based in

developed countries. An understanding of how South Korean MNEs approach

their global people management is critical to debates on the possible emergence of

an “Asia Pacific model of HRM” (Dowling & Donnelly, 2013, p. 172).

We present the findings of a study that examines parent companies’

approach to subsidiary-HRM practices of nine Korean MNEs, all of which enjoy

internationally competitive positions in their respective sectors. The major part of

study is based on thirty interviews with HR executives and senior managers from

the corporate headquarters directly responsible for the development and

implementation of the IHRM strategy in the firms. As one part of the interview

process, we used a structured-interview instrument designed to examine the

different orientations towards global standardization and localization at the

4
detailed element level within each of five HRM practice areas across the nine

MNEs (job and grade, recruitment and selection, training and development,

performance management, compensation and benefits). In total we gathered data

on each of forty-seven elements about which decisions needed to be made with

regard to global standardization or localization: nine for job and grade system, six

for recruitment and selection, six for learning and development, sixteen for

performance management, and ten for compensation and benefits. In our

findings, we show that the IHRM approaches of the Korean MNEs are best

captured by a distinctive approach of hybridization across these elements of

individual HRM practices, rather than more wholesale orientations of “global

standardization” or “localization”.

The remainder of the paper is structured as follows. First, we present the

currently dominant understanding and assumptions in research on the IHRM

strategy of MNEs. After a discussion of our research methodology and an

introduction of the case organisations, the empirical findings are presented. We

then offer an interpretation of the findings with reference to existing theoretical

assumptions, and conclude with a discussion of the contribution of the study and

its limitations, as well as suggestions for future research.

International HRM strategy in the Literature: Dominant Assumptions and

New Challenges

One of the key issues in the practice of IHRM is the need to manage the dual

pressures of global integration and local responsiveness (Brewster, Sparrow &

Harris, 2005). Research on the issue has examined the degree of global

integration or local responsiveness in IHRM (see for example Evans, Pucik &

5
Barsoux, 2002; Rosenzweig, 2006; Björkman & Lervik, 2007; Farndale &

Paauwe, 2007; Farndale, Brewster & Poutsma, 2008; Brewster, Wood & Brookes,

2008; Chung et al., 2012). It has also begun to distinguish the use of particular

mechanisms in IHRM integration (Smale, Björkman & Sumelius, 2013). Much

empirical study in the area is underpinned by the integrative IHRM model of

Taylor, Beechler and Napier (1996), which argues that an integrated approach

regarding IHRM strategy and practices has to distinguish the corporate-wide level

from that of affiliates, and also from the employee-group level. Given that our

main interest is in company-wide IHRM strategies, we also work with this

definition of IHRM strategy, even while we recognize there may be more than

three abstract orientations or routes to globalization of HRM. Accordingly, we

define IHRM strategy as the general approach or orientation taken by an MNE “in

the design of its overall IHRM system, particularly the HRM systems to be used

in its overseas affiliates” (Taylor et al., 1996, p. 966).

Three key assumptions have been dominant in research on orientations to

IHRM strategy. First, the degree of standardization (versus localization) of

subsidiary-HRM practices has been considered as a key dimension underlying

different orientations in IHRM strategy (Brewster et al., 2008; Pudelko &

Harzing, 2007; Dickmann & Müller-Camen, 2006). Taylor et al. (1996) identified

three generic IHRM orientations at the corporate-level of MNEs: exportive,

whereby corporate HR actors attempt to transfer parent company’s HRM system

to subsidiaries; adaptive, whereby they attempt to adapt subsidiary HRM system

as much as possible to the local context; and integrative, in which “the best”

approaches are sought from parent and subsidiary practices. In most empirical

IHRM research, the degrees of standardization as an integration mechanism has

6
been examined by assessing the similarity between parent and subsidiary firm

practices (e.g. Brewster et al. 2008; Rosenzweig, 2006; Björkman, 2006).

Second, previous studies have typically examined the degree of

standardization either at the overall practice level (e.g. performance management,

recruitment and selection, compensation etc.) or the level of entire HRM

functions, through the use of measures that aggregate ratings on the degrees of

standardization for individual HRM practices (Björkman, 2006). For example, a

pioneering study on HRM practices of MNEs by Rosenzweig and Nohria (1994)

examined whether subsidiary-HRM practices were similar to parent’s or local

practices in each of six HRM practice areas such as employee benefits, annual

time off, variable compensation for managers, and so forth. Research has

increasingly looked at the implementation of particular HRM practices, for

example talent management (Hartman, Feisel & Schober, 2010) or global

performance management (Festing, Knappert, Dowling & Engle, 2012) in

different subsidiary locations. Importantly, while standardization may be

implemented across a specific element of an individual HRM practice, the

approach towards another element of the same practice at the same time may be

defined by localization (Brewster et al., 2005). For example, an MNE in the

energy sector mapped a set of generic HR processes by breaking these down into

detailed elements and revamping the country role around each process to establish

a new HR system architecture. Decisions were made as to whether to allow local

aberrations from the globally designed process on a detailed element-by-element

basis in each HRM practice (Sparrow, Brewster & Harris, 2004).

The third dominant assumption is that in attempts to standardize HRM

processes, parent-company practices are the major reference, in line with the

aforementioned orientations of IHRM strategy (see e.g., Bartlett & Ghoshal, 1989;
7
Rosenzweig, 2006; Björkman, 2006). This is evident in the widespread tendency

to treat similarity of practices between parent company and subsidiaries as a key

indicator of global integration of HRM within IHRM research (Rosenzweig &

Nohria, 1994; Hannon, Huang & Jaw, 1995; Kim & Gray, 2005; Rosenzweig,

2006). The use of parent practices as the major reference of standardization

reflects MNEs' taken-for-granted views on effective HRM practices, the

embeddedness of their practices in their home countries (e.g. Björkman, 2006) or

their “administrative heritage” (Taylor et al., 1996; Bartlett & Ghoshal, 1989).

However, the dominant assumptions above have been challenged by more

recent scholarship, which depicts a more complex picture in IHRM. Regarding

the first and second assumptions, several recent studies show that the constitution

of IHRM strategy and practices could be far more nuanced and complex than the

rather simplistic framework that the degree of standardization versus localization

suggests. For example, work by Edwards and colleagues highlights that a number

of complex patterns of transfer, negotiation, and combination of practices exist in

the process of globalizing HRM (Edwards & Rees, 2007; Edwards & Tempel,

2010; Edwards, 2011; Edwards, Jalette & Tregaskis, 2012). In a detailed case

study of Japanese multinational retail firms, both in their home country and in

their subsidiaries in China, Gamble (2010) finds that the construction of

subsidiary-HRM practices in MNEs is too complex a phenomenon to be explained

by the traditional standardization vs localization continuum. In order to capture

the complexity of IHRM, Gamble proposes the concept of “hybridization”, which

involves complex patterns of creating new management practices through

simultaneous processes of highly selective adoption, transfer, and local

adaptation. Other research by Sparrow and colleagues on HR globalization within

western MNEs makes a distinction between standardization and optimization to

8
capture the more nuanced and detailed approach MNEs adopt in their IHRM

strategy (Sparrow et al., 2004; Brewster et al., 2005). Standardization occurs when

HRM processes designed at headquarters are applied to country operations either

formally or tacitly based on the expectation of performance benefits, as seen by

corporate headquarters (Martin & Beaumont, 2001). Optimization involves the

discipline of adjusting a process based on multiple viewpoints so as to obtain a

particular goal by setting or optimizing a specified set of parameters without

violating some core constraints. Case studies examining the globalization of HR

functions at the element level in western MNEs reinforce this emerging view

through the investigation of areas such as international recruitment (Sparrow,

2007), the evolution of international mobility functions (Sparrow, 2012) and the

development of global talent-management processes (Garavan, 2012; Sparrow,

Farndale & Scullion, 2013).

Regarding the third assumption, questions have also been raised about the

most appropriate locus of reference for potential standardization. Pudelko and

Harzing (2007) note that practices from outside the organization, such as “global

best practices” that do not necessarily originate from the parent company may be

utilized as a reference for standardization. In this paper we argue that IHRM

research needs to adopt a broader frame of reference when considering the origin

of practices for standardization. This broadening also demands far more

sophisticated methodologies than have typically been used in related research.

The dominant assumptions in the extant research on IHRM strategy become

problematic in the distinctive context of the emerging MNEs, such as South

Korean MNEs. These firms might not be driven by the same assumptions about

the globalization of their HRM. MNEs from developed countries often claim

legitimacy in the transfer of parent-company practices to subsidiaries, presenting

9
them as “advanced practices” and a source of competitiveness, corroborated by

the global status of the home country. MNEs from home countries that lack such

claims to legitimacy might not attempt the same approach to globalization of their

practices. First, they may be more sensitive to diverse institutional pressures and

reluctant to transfer home country practices to subsidiaries because of such

perceived shortcomings (Chang et al., 2009; Smith & Meiksins 1995; Bartlett &

Ghoshal, 2000). Second, the practices that exist in the parent company or home

country might not be mature because of limited heritage and experience in

conducting global business (Ramachandran & Pant, 2010; Cuervo-Cazurra &

Genc, 2008; Luo & Tung, 2007; Dunning, Kim, & Park, 2008). South Korean

MNEs, and by extension MNEs from other newly industrialized economies, may

challenge some dominant assumptions within current IHRM debates.

This paper addresses the following central research questions:

RQ1: What is the overall orientation in Korean MNEs’ approaches to subsidiary-

HRM practices in terms of global standardization and localization?

RQ2: At which level do Korean firms intend to standardize subsidiary-HRM

practices?

RQ3: What is the origin of practices for standardization in Korean MNEs’

approaches to subsidiary-HRM practices?

Methodology

A multiple-case study method was adopted in this study as appropriate for the

investigation of the similarities among Korean MNEs in their corporate IHRM

strategies. Nine major MNEs were included in this comparison. The case

companies were selected based on (1) accessibility, (2) public awareness of their

“Global HR” activities and (3) representativeness in their sectors in terms of firm
10
size. Though one cannot generalize the findings in this study based on the small

number of cases to the larger population of Korean MNEs, the nine firms captured

a considerable range of sectors, including automobiles, electronics, steel,

industrial wire and cable, infrastructure building, IT services, cosmetics, and

confectionary. Crucially for the study at hand, all nine firms included in the study

had very concrete, focused, and active globalization strategies, which included

HR functions. The proportion of revenues generated overseas spanned a range

from the mid-teen percent to over eighty percent. Total sales likewise spread

across a wide range (See Table 1.). This, of course, suggests that variables such as

the percentage of revenues generated from overseas or total sales might moderate

the overall results we report. As companies’ efforts for globalizing HRM were

mainly focused on white-collar employees, our research only includes their

approaches to subsidiary-HRM practices for this segment of employees.

(Insert Table 1. about here)

To gain a basic understanding of each company, a range of documents was

collected and reviewed, including annual reports and company profile documents.

Primary data for analysis were collected through thirty interviews with thirty-one

key informants. In each company interviews were arranged through an initial key

contact, a HR manager in a corporate HR team. Each interview was conducted on

a one-to-one basis except one interview that was carried out with two

interviewees. Twenty-nine interviewees (between two to five interviewees for

each of nine companies) were HR executives and HR senior managers at the

corporate headquarters of the nine MNEs. They were key informants who were

directly responsible for the development and implementation of IHRM strategy,

11
including activities associated with globalizing HRM at the firm level. The

purpose of using multiple interviewees was to capture a holistic picture of the

company’s approach to subsidiary HRM practices, as a single interviewee may

have been unable to answer all of the questions given the wide range of

information sought at the organizational level. Thus interviews in a given case

company were largely complementary to each other. When there were multiple

responses to a question from different interviewees in a company, we checked on

consistency and found those responses tended to be highly congruent with each

other and the congruent responses were adopted in the data analysis. Non-

congruent responses are noted as competing explanations or caveats to our

findings. Given the focus of questioning was on each company’s approach and its

policy-design intent, this was to be expected. Additionally, to gather information

regarding general trends in global HR activities in South Korea, two interviews

were conducted with directors of the Seoul offices of two international HR

consultancies, which had been and were, at the time of research, involved in

multiple Global HR projects with a large number of Korean MNEs. Interviews

were carried out at the interviewees’ workplaces and each interview lasted from

one to one and a half hours. All interviews were tape-recorded and transcribed.

Interviews carried out for the study were of two types. Where the focus was

on the investigation of emergent phenomena, interviews were semi-structured.

Where the focus was on the collection of detailed data so as to allow for the

analysis of element-level practices across the nine MNEs in the study, a more

structured approach was adopted. In practice, this meant that interviews with

informants about the overall corporate IHRM strategy and the activities associated

with globalizing HRM, as well as the justifications offered for the pursuit of these

particular directions in IHRM strategy, were semi-structured. Interviews with the

12
structured-interview instrument that solicited data for the analysis of an individual

firm’s orientations at the element level of IHRM practices, categorized as globally

standardized (following globally common standards), localized (allowing

subsidiary discretion to respond to local needs), or modified (allowing local

modifications on the global standards), were structured. Methodologically, our

two-pronged approach was best suited to pursue further the suggestions in

previous literature that globalization can happen at the detailed element level in

HRM practices (Rosenzweig, 2006), remedying the tendency in much of the

extant literature only to investigate this at the broad practice level.

The semi-structured interview topics included descriptions of IHRM

strategy, specific IHRM initiatives and the reasons for the pursuit of given IHRM

strategies. Every interviewee in the nine firms was asked about these general

strategic themes. The structured-interview instrument solicited data about five

broad HRM practice areas that have widely been identified as core areas of

practice in previous research (Huselid, 1995; Youndt et al. 1996): job and grades,

recruitment and selection, learning & development, performance management,

compensation and benefits. It entailed data at the detailed element level of

practices within each of these practice areas. For example, the general HRM area

of performance management was expanded to comprise sixteen elements, such as

performance evaluation factors; performance measurement items; weighting of

evaluation factors; performance-rating scale and so on (see, Table 2). The list of

forty-seven elements representing generic design elements of the five HRM

practice areas were identified in an earlier study (Chung et al., 2012) with two

Korean MNEs (AutoCo and ElecCo2) which also participated in this study. Both

companies already had a series of elements of HRM practices in their global

HRM guidelines. Common elements were identified by comparison between the

13
two companies and a generalizable element list was developed. The respondents

could answer the instrument without difficulties and the list of elements in the

instrument covered their HRM practices comprehensively. Such detailed data

collection at the level of elements was essential given our stated purposes, as it

made it possible to refrain from a priori assumptions about the existence of a

universal and homogenous orientation in the strategies across different HRM

practice areas. It also enabled a systematic comparison across the firms.

For the structured-interview part, one interviewee for each company was

identified by key contacts as the most appropriate informant who had been

involved in the development of corporate guidelines for subsidiary-HRM

practices. This individual was first asked to respond to the structured-interview

instrument as well as the semi-structured interview questions. Most interviewees

could respond to the instrument without difficulty, offering explanations of why

their companies adopted the particular approaches to subsidiary HRM. In two

companies (AutoCo; ElecCo2), two interviewees were separately involved in

responding to the instrument, as one could not answer questions in all the

categories in the instrument due to the respondent’s scope of job responsibilities.

The results of initial responses to the instrument by one or two interviewees were

then reviewed by another respondent. In most cases they were confirmed without

disagreement, but in a few cases the initial responses were amended in the

following interviews as it became apparent that there had been misunderstandings

of categories in the instrument by the former interviewees.

The data analysis followed four steps. The first step coded the structured-

interview data for each company regarding parent companies’ guidelines for

subsidiary-HRM practices. As the data collection described earlier was highly

structured, it could be coded in a straightforward manner. The results are shown

14
in Table 2. In the second step, the semi-structured interview data for each

interviewee were coded for accounts regarding: (1) the parent company’s

approach to subsidiary-HRM practices, and (2) the rationale or reason for

adopting the approach. Pre-defined coding categories were used for IHRM

strategy and influencing factors on this strategy. Each selected interview account

in each category was then coded using labels that summarized key notions in the

interview account. The codes were then classified into higher-level codes through

inductive reasoning. These codes were provisional and subject to re-coding if

signaled by the subsequent company-level analysis. The third step focused on

analyzing the coded individual data at the company level. After aggregating the

results of coding the semi-structured interview data at company level, each initial

higher-level code was re-examined across interviewees for each company and

refined to reflect common views across interviewees. When necessary, more

abstract constructs were identified and coded. After refining provisional codes, the

coded results of the semi-structured interview data were reviewed alongside those

of the structured-interview data. Key features of the parent company’s approaches

to subsidiary-HRM practices and the rationales behind these approaches were

identified for each company, based on the understanding that had been gained

through the coding process. In the fourth step, the common or distinctive patterns

in company-level approaches to subsidiary-HRM practices and the rationales of

these approaches were examined across companies. The key findings in relation to

the research questions were drawn from this comparative analysis.

Given that our focus is to examine parent companies’ approaches to

subsidiary-HRM practices, the reports from interviewees in headquarters need to

be verified through examining whether such approaches are actually recognised

and implemented in each subsidiary. We tied reports from headquarters regarding

15
subsidiary HRM practices to the actual practices implemented in the six

subsidiaries of one MNE to demonstrate the validity of our findings.

It would be beyond the scope of a single qualitative study to investigate all

subsidiaries of the nine companies. However, we conducted supplemental

research with six subsidiaries of an MNE to examine the fit with the reports from

headquarters-level interviews. This company was selected because it showed most

of the common patterns identified as important across the nine firms in the parent

companies’ approach to subsidiary-HRM practices and we could control and

match the functions served by its subsidiaries. Among the six subsidiaries, three

subsidiaries are located in India and the other three are located in the U.S, again

enabling multiple site comparisons within a single country. The three subsidiaries

in each host country include a sales office, a manufacturing plant, and a research

and development center. The level of economic development of a host country

and the function of a subsidiary were identified in the initial study at the corporate

level as important factors that could lead to different patterns in the

implementation of parent firms’ policies regarding subsidiary HRM. Thirty-six

interviews were conducted across the six subsidiaries. To capture the state of

implementation of subsidiary-HRM practices, five to seven interviewees in a

subsidiary, including local HR managers, an HR expatriate, the head of the

subsidiary and two to three line managers, were included in the study. Interviews

were conducted on a one-to-one basis. In each subsidiary, the local HR manager

and an HR expatriate were asked to provide information regarding the

implementation of headquarters’ guidelines on subsidiary-HRM practices. A

structured-interview template similar to the one used for the headquarters-level

study was used at the interviews. The subsequent interviews were conducted with

line managers and the head of subsidiary to verify the information received from
16
the local HR manager and the HR expatriate. When there is a divergence of views

between the local HR manager and the HR expatriate, the interview data from line

managers and the head of subsidiary was considered to ascertain the current state

of implementation in a particular area of HRM practices.

Findings

In every firm we found evidence of a hybridization approach, which involves

careful choices of specific elements of HRM practices for global standardization,

modification of global standards, or localization, in parent firms’ approach to

subsidiary-HRM practices. The analysis of orientations across the 47 elements of

the five HRM practices reveals that evidence is lacking for universal, wholesale,

and homogeneous strategies that can be coherently summarized as global

standardization or localization. Rather, in each participant firm, we observe that

viable options are sought and selected from among the three orientations - global

standardization, modification of standards, and pure localization - for each

element of HRM practices. We now elaborate on this main claim.

The emerging “global HR” in Korean MNEs: views from the institutional context

Changes in HRM practices in South Korea that occurred after the 1997 Asian

financial crisis have been well reported in the literature. These were broadly

related to the implementation of new concepts and practices, such as performance-

oriented HRM systems, within the Korean business context (see, e.g., Bae &

Rowley, 2003; 2001). Our interview data confirm that the most significant HR

issues as seen by key actors in Korean MNEs are the challenges posed by the

perceived need for the globalization of the HR function. Interviewees consistently

17
argued that there was a clear and widespread trend among Korean MNEs for

attempts at the globalization of HRM at the firm level.

According to our interview data, large Korean MNEs such as ElecCo1,

ElecCo2, and AutoCo, which were established and developed their businesses in

global markets earlier than most other Korean firms, initiated projects for

globalizing their HR function from the mid-2000s onwards. Subsequently, other

Korean MNEs from a range of industries joined the stream of globalizing efforts.

According to one key informant at the subsidiary of a major American HR

consultancy firm, which was a HR-consulting service provider to numerous

Korean MNEs, “Global HR” has been established as a common and critical issue

for MNEs from the Korean institutional context:

“Within [the last] 5-6 years… the term, “Global HR” has been used

widely in Korean business society. Before then, a main focus of

Korean companies’ headquarters had been on expatriation.... As the

internationalization of businesses by Korean companies has rapidly

progressed, core functions such as marketing, R&D, and

manufacturing went outside Korea. Some Korean companies even

acquired foreign MNEs, which means a large number of employees

are now non-Koreans. Korean MNEs began to think of how the major

practices of HRM such as the grade system, performance management,

reward, and recruitment should be designed and managed in a global

context” (Director, major HR consultancy)

This view was supported in all of the nine case companies. Previously, the

management of subsidiary HR functions had been largely delegated to subsidiary

HR managers, mostly hired in each host country. Corporate HR staff had not been

overly concerned with the operation of HRM in individual subsidiaries. However,

18
the rapid growth of business in foreign markets produced significant pressure for

the corporate HR staff to initiate globalizing efforts across their organizations,

linking the corporate HR function and foreign subsidiaries.

A hybridization approach at the level of element of practices

A range of activities may be labeled as “Global HR”, but our interviewees mainly

defined it as those common activities associated with the development of global

HRM guidelines, designed to guide and regulate HRM practices in subsidiaries or,

in some cases, across an entire MNE, including the parent company.

With regard to research questions 1 and 2, our objective is to show how the

adoption of an HR strategy that is selectively adaptive to pressures of global

standardization and localization at the level of element of HRM practices affords

both a more nuanced and context-dependent approach to the globalization of HR

activities. We found that case companies regulated their subsidiary-HRM

practices carefully, deciding which elements of the HRM practices needed to be

globally standardized (following globally common standards), localized (allowing

subsidiary discretion to respond to local needs), or modified (allowing local

modifications on the global standards). The choices made for each element of

practice reflected a nuanced understanding of where local discretion was possible

without impacting the high-level global requirements of the HR system as a

whole.

It is difficult to assess a broad HRM topical area as globally standardized or

localized without carefully examining at the level of its individual elements, and

even harder to describe the overall IHRM strategy. The literature traditionally

defines this IHRM strategy using the traditional dichotomy of global

standardization vs. localization as the general orientation in the overall system

19
design. However, the notion of “hybridization” describes an IHRM strategy based

on combining different orientations together. Some elements of a practice are

standardized, while others are allowed to be modified based on the global

standards, and yet other elements are allowed to be localized. The corporate HR

staff of the firm try to select a viable option from the three alternatives for each

element of the HRM practice (e.g., the performance evaluation factor,

performance measurement item, weighting of evaluation factors, performance

rating scale etc.) in order to achieve a set of objectives (e.g., the globally common

logics of actions, such as maintaining performance-oriented management style,

facilitating global staffing etc.) within the potential constraints (e.g., the accepted

legal and cultural context of host countries).

The pattern of the IHRM strategies in all nine case companies could be

described as such a hybridization approach. However, the actual outcome of such

endeavours was different according to the particular context of each company

(see, Table 2). The hybridization approach at the element level refers to the

intended approach, not the realized one. As reported elsewhere (e.g. Chung et al.,

2012; Gamble, 2010, 2003; Kostova & Roth, 2002), there are potential gaps

between the corporate headquarters’ intentions and actual implementation in

subsidiaries.

(Insert Table 2 about here)

The analysis across the nine firms shows that all can be classified as being

oriented toward a hybridization approach at the element level as described above.

Although variations in the particular blend of hybridization exist across the MNEs

in their overall approach, there is not one case that could be classified as being

geared predominantly toward either global standardization or localization. Even in

20
the electronics and automotive sectors, which have been recognized as examples

of globally integrated industries (Porter 1986), the Korean MNEs intended to

standardize only a highly selective range of elements within their HRM practices.

Most interviewees were reluctant to describe their IHRM strategy as being

based on a global-local dichotomy, as shown by a corporate HR manager:

“Actually, we began to approach the issue of global HRM with the

concept of standardization, but, after giving careful consideration to it,

we finally concluded that it might be unrealistic to stick to a standard

model which is developed by the center due to the complexity in each

subsidiary situation. We thought that how to deploy and make it work

in each subsidiary is a real issue. So, we took the view of local

optimization, utilizing [external global] best practices as just one

source of reference.” (Corporate HR manager, SteelCo)

As illustrated above, Korean MNEs standardize their HRM activities

selectively, based on a finer level of practices. This tendency was explained by a

senior manager involved in the development and implementation of global HRM

guidelines in his company as follows:

“We developed something called a ‘global HR standard’ and deployed

it to all subsidiaries. Initially, we intended to define core areas for

global standardization on an entire practice-by-practice basis, such as

global grade system, job classification system, performance

management and so on. For example, regarding the grade, we wanted

to say, this is our mandatory standard system that every subsidiary

should follow. However, after a pilot test with several subsidiaries, we

found that the approach was unrealistic and a more sensible approach

would be needed to accommodate diverse local needs as well as to

21
 maintain key element as globally common. Thus, we break down

major HRM tasks into more detailed elements and decided which one

should be a key area for global standardization.” (Corporate HR

senior manager, AutoCo)

With regard to the research question 3, a distinctive aspect in the IHRM

strategy of Korean MNEs is the strong willingness to adopt what they believe are

“global best practices” or “global standards” as a source of standardization. Seven

out of nine case organizations used benchmarking with leading U.S. MNEs, and

eight of the MNEs hired U.S.-based global consultancies to support their

globalizing efforts. HRM practices used by US-based MNEs have been widely

introduced to Korean companies since the Asian financial crisis in 1997.

Information was gathered through benchmarking and work with consultancies.

However, the scope and depth of the implementation of these practices differed

among Korean MNEs. The majority reported that their parent companies could

not fully implement espoused “ideal” practices for a number of reasons, such as

internal constraints in their home countries based on resistance from labour unions

and the continued influence of traditional practices. Home practices represented a

mix of traditional seniority-based and a newly introduced performance-based

system. When they developed global HRM guidelines for subsidiaries, they were

not willing to consider their parent companies’ current practices as the major

reference, but rather adopted “global best practice” as a basis of standardization:

“The HRM practices of the Korean headquarters may be effective in

Korea, but, could they be the same in other countries? We don’t think

so. Why? Because it [the context] is very different. Then what would

be an alternative? Maybe something like ‘global best practices’ could

be considered as a tool or source if they are more applicable

22
 universally, even though it might not be really the best one.”

(Corporate HR executive, ElecCo2)

Although our study of nine MNEs potentially limits the ability to generalize

our findings, we identified an indication of the potential impact of the sector on

the IHRM approaches of the companies. Companies 1,2,3 from automotive and

electronics, considered as examples of globally integrated industries by Porter

(1986), expressed an intention to standardize more elements of HRM practices

than the other companies, as shown in Table 2. Whilst those three companies

tried to standardize 40-55 percent of elements of HRM practices, the other five

companies (4, 5, 6, 7, 8) targeted only 9-17 percent, and one company (9)

intended to standardize 30 percent of the elements. It remains unclear whether the

differences are the result of an industry effect or an international strategy effect, as

all three firms in the globally integrated industries seem to be oriented towards a

global strategy, while the other firms are oriented towards a multi-domestic one.

We conducted a follow-up study to partially assess how the parent

companies’ approaches to subsidiary-HRM practices, as reported in the corporate-

headquarters level study, are actually recognized and implemented at the

subsidiary level. Table 3 shows the recognition and implementation of the

corporate guidelines on HRM practices by six subsidiaries of MNE 1.

(Insert Table 3 about here)

First, corporate guidelines regarding subsidiary-HRM practices set a ‘Global

HRM Standard’. These guidelines lay out the desired features of HRM practices

that subsidiaries are expected to adopt and which elements of HRM practices are

required to be globally common. All HR managers in the six subsidiaries have

23
some knowledge of their corporate-headquarters approaches to subsidiary-HRM

practices, and from such knowledge determine which elements can either be

modified from the global standard or are left to the full discretion of subsidiaries.

Second, although there are variations across subsidiaries and elements of

HRM practices, all six subsidiaries implemented the corporate guidelines to some

extent. As expected and specified in the global standards, significant parts of the

mandatory standardization elements were adopted by subsidiaries. Those elements

that were subject to rejection or modification by local actors take on especial

importance. For example, in India, there was a major point of difference between

the intentions of the headquarters and the subsidiary practices in the grade system.

The global standards specified a five-level grade system. This could not be

implemented in India, where a highly differentiated hierarchical grade system was

the norm and standard in the local labor market, for both domestic and foreign-

owned firms. A ten-level grade system was introduced. Local actors had

successfully persuaded corporate-headquarters actors that implementation of their

own local version of the grade system, based on their localization logic, was

preferable. We also found significant variations among the different subsidiaries

located in the same host country. In the U.S. the more mature research and

development function subsidiary showed a low level of acceptance of the

corporate guidelines. By contrast, the U.S. plant, which was a newly established

subsidiary, was perceived as more willing to adopt the corporate guideline.

The potential explanation on the IHRM strategy of the Korean MNEs

Although we cannot generalize from nine cases, we found evidence that explains

why Korean firms pursued the approaches they did, especially the utilization of a

“global best practices” instead of the use of parent practices for global
24
standardization of subsidiary HRM practices. Two factors stood out: (1) HRM-

related institutional conditions of the home country; and (2) cognitive conditions

of HRM-related actors in the corporate headquarters. Regarding the institutional

conditions, the case companies perceived a lack of mature practices in their home

country due to the rapidly changing institutional environment. Before the financial

crisis, HRM practices in Korea were largely influenced by Japanese HRM

practices (Bae & Rowley, 2003). After the crisis U.S. practices gained legitimacy

as being more advanced and effective, and have been introduced widely in Korea.

However, changes are still in progress, contested between U.S. and Japanese-style

HRM practices (Bae & Rowley, 2003). Newly legitimized practices are still not

fully established by Korean MNEs as the desired forms. There is variability in

implementing these new “ideal” practices, and a lack of strong legacy practices in

parent companies. Our Korean MNEs opted to standardize particular elements of

their HRM practices across subsidiaries, developing and utilizing prototypes

closer to “global best practices” rather than transferring current parent practices.

An HR planning manager involved in global HR projects explained:

“We developed and deployed new global practices which were not

stemming from parent-company practices, but based on benchmarking

studies of well-known global companies. …We don’t think our HR

practices in the headquarters are the ideal ones we want to implement

and changing HR practices in Korea could be quite difficult and need

more time due to potential industrial relation issues. In a sense, we

could feel more comfortable in implementing the new global practices

in foreign subsidiaries first.” (HR planning manager, SteelCo)

Second, with regard to cognitive conditions, the majority of respondents

from the case companies expressed their less-privileged status as an MNE from a
25
non-dominant economy. They were explicitly concerned that if a label of “Made

in Korea” is imprinted in their global HR practices, it will not be received

positively by subsidiary employees. This cognitive orientation might explain why

the Korean MNEs utilized diverse external sources of practices actively and were

highly concerned about the legitimization of their global practices, by relying on

more visible processes of hybridization. A corporate HR manager in a case

company which is a leading MNE in the sector supported this view:

“U.S. companies already have global concepts in their home practices

in that their practices may be adopted by subsidiaries without serious

conflicts as ‘advanced’ ones. They don’t need to develop something

new for globalization. If Korea is (becomes) a dominant country… we

might be able to plant our practices to other countries in the same

way…. But, we don’t have ‘the global consensus’ that the U.S. firms

have. If we try to implement something called Korean practices in our

U.S. subsidiary, they may say we are crazy! We change ours just

because we need to do it.” (corporate HR manager, ElecCo1)

Even a well-known brand company among our case companies described

itself as a company from a non-dominant economy. Regardless of outsiders’

views, they believe that their parent HRM practices would not be welcomed by

employees in subsidiaries if perceived as “Made in Korea”. We found that the less

privileged status of their home country, as perceived by the interviewees, is one of

the factors that may help explain the companies’ approaches to subsidiary-HRM

practices, such as adopting what they believe are “global best practices” or

“global standards”. Arguably, this kind of “liability of origin” might be found

among MNEs from other newly industrialized or emerging economies.

26
Discussion

Our study finds that Korean MNEs take a more nuanced approach in their IHRM

strategy, rather than adopting a position along a global standardization vs.

localization dichotomy. We identify their overall orientation to IHRM strategy as

a hybridization approach, whereby practices adopted at the element level are

drawn from diverse sources, including so-called “global best practices”.

(Insert Table 4 about here)

This finding may challenge the dominant assumptions of the current IHRM

literature that we identified earlier (Table 4). There is a clear contrast between the

widely shared assumptions about the IHRM strategies of MNEs and what we

found in this empirical study. Our understanding of the IHRM strategies of

MNEs demands critical re-examination. Closer studies of MNEs from newly

industrialized economies and emerging markets promise to extend such

understanding by encompassing a wider, heterogeneous group of MNEs.

This orientation was related to the distinctive institutional and cognitive

conditions that characterize their status as MNEs from a newly industrialized

economy. This strategic orientation, rather than being an unintended aggregate

consequence of ad-hoc practical solutions for individual HRM practices, should

be understood as part of a deliberate attempt by Korean MNEs to overcome their

“liability of origin” (Ramachandran & Pant, 2010; Chang et al., 2009; Bartlett &

Ghoshal, 2000). The IHRM strategy is conditioned by (1) the absence of mature

and unique national bundles of HRM practices due to recent and rapid changes in

the home country institutional context and (2) the self-perception of less-

privileged status as firms based in a non-dominant economy. Arguably, such

27
institutional and cognitive conditions also apply widely to the larger population of

MNEs from newly industrialized economies and emerging markets. The study of

Korean MNEs’ IHRM strategies reveals critical features of the new generation of

MNEs based in the less-developed economies. It builds a more nuanced approach

that recognizes the multiple institutional pressures experienced by these firms in

ways that are distinct from their competitors based in developed home countries.

Theoretical implications

A number of theoretical implications arise from our study of Korean MNEs.

First, contrary to previously identified orientations of IHRM strategy, our findings

show that these MNEs pursue more nuanced approaches. We found a

hybridization approach to be the focal strategy for these firms - a combination of

standardization, localization, or modification at the level of element that

comprises broad HR practice areas. Such a nuanced approach has also been

observed in MNEs from developed countries in prior research (e.g., Gamble,

2010; Sparrow et al., 2004). However, some key features of the context of MNEs

from South Korea, a newly industrialized economy, render such approaches more

explicit. New constructs and/or new typologies to help capture emergent

repertoires of IHRM strategy are needed that go beyond the traditional global

standardization-localization dichotomy and concepts such as hybridization (e.g.,

Gamble, 2010), optimization (e.g., Sparrow et al., 2004), and duality (e.g.,

Brewster et al., 2008; Evans et al., 2002) deserve more sustained empirical

attention. MNEs from newly industrialized economies and emerging markets

constitute particularly pressing and promising cases for empirical and theoretical

enhancement of our current understandings of IHRM strategy.

28
 Second, our findings highlight that MNEs from South Korea utilize external

“global best practices” as an alternative to parent-company practices, which have

been recognized as a major source of standardization. Indeed, our particular

finding on this area suggests that this emphasis on “universal best practice” may

be more prominent and observable in the IHRM strategies of MNEs from newly

industrialized economies and emerging markets and that they therefore may very

well be more active and critical agents in the diffusion of dominant models and

approaches on a global scale than previously recognized. In turn, we see such so-

called “global best practices” to be widely linked to a dominance effect, which

refers to the tendency of following and learning a role model- widely perceived as

best practices- stemming from a country that occupies a dominant position in a

hierarchy of national economies (Smith & Meiksins, 1995). In a study on HRM

practices of MNEs headquartered in the U.S., Germany and Japan, Pudelko and

Harzing (2007) found that their subsidiary-HRM practices can be shaped not only

by local practices or parent practices, but also by “global best practices” coming

from U.S. MNEs. MNEs from newly industrialized economies and emerging

markets, lacking an institutionally and organizationally mature and entrenched set

of alternative HRM practices, and feeling inclined to adopt already legitimized

practices due to their distinctive institutional and cognitive conditions, may indeed

emerge as the frontrunners of the adoption of global best practices, and, arguably,

key actors in the perpetuation and consolidation of dominance effects.

Third, our findings show that the liabilities of origin, particularly the role of

institutional instability and the perceived weak legitimacy of being a non-

dominant economy, play a significant role in shaping IHRM strategies of

emerging MNEs. This is a distinctive variation of the “country-of-origin” effect

(see, Ferner, 1997). Previous IHRM research has examined the effect of country
29
of origin by assessing the similarity between subsidiary-HRM practices with

home country practices based on two assumptions: (1) the existence of dominant

HRM practices which are strongly embedded in a home country; (2) parent

company’s willingness to transfer those practices to subsidiaries because they are

taken for granted as an appropriate way of managing people or a critical source of

the company’s competitiveness. Our study of Korean MNEs shows it is

problematic to presuppose these conditions in MNEs from newly industrialized

economies and emerging markets. Emerging MNEs lack clearly demarcated and

consolidated dominant practices in their home country due to the contestation

among different institutions in the process of rapid transformation. Even if there

are practices recognized as being effective in the home countries, the perceived

weakness of legitimacy makes expectations of local adoption of these home

country HRM practices precarious. Strategies of practice standardization based on

home country standards are unlikely. When we examine the country-of-origin

effects in the HRM practices of MNEs from newly industrialized economies and

emerging markets, the similarity of practices between home country and

subsidiary practices may be a poor, and even misleading, indicator of the effect.

Managerial relevance

Contrary to the dominant assumption that standardization might occur at the

overall HRM-function level or the HRM-practices level, our study shows that

MNEs attempt to standardize their HRM practices highly selectively at the finer

level within a practice. This further suggests that there is an important managerial

implication for the practice of HRM within MNEs. A corporate headquarters of an

MNE might need to consider carefully the needs of standardization at a very

detailed level, differentiating each element of HR practices, rather than being

30
constrained by traditional “lumping” typologies that attempt to manage at the

entire HRM-function level or overall practice level. The latter approaches may

have serious limitations in being able to adequately consider the complex pattern

of IHRM approaches that will be the most effective within MNEs.

Limitations and future research

We recognize our study is not without limitations. First, as it relies on data mainly

from the headquarters of each MNE, we only examine the headquarters’ view on

the firm's strategic orientation in IHRM. However, a seemingly optimal

alternative could very well be interpreted differently by subsidiary actors and thus

actual implementation at the subsidiary level could diverge considerably from that

intended and envisioned by the headquarters. Several interviewees at subsidiaries

of a MNE mentioned that even though there are mandatory requirements in

subsidiary-HRM practices, which were intended to be followed by all

subsidiaries, variations from the corporate guideline may exist in a particular

subsidiary. Future research is needed to build upon our findings to provide data on

the actual implementation of selected IHRM strategies at the subsidiary level.

Second, in seeking to identify commonalities across Korean MNEs in their

approaches to subsidiary-HRM practices, we recognize that such approaches

could differ depending on the industry and on company characteristics such as

size and degree of internationalization of businesses (Schuler et al, 1993;

Rosenzweig & Nohria, 1994). The nine Korean companies vary in terms of size,

industry and proportion of sales abroad but our study does not allow us to

systematically test the effects of each of these factors on MNE approaches to

subsidiary-HRM practices. Future research with a larger sample would be well

31
placed to explore the patterns of differences in the international HRM approaches

across companies and effects of various factors on them.

Conclusions

Through the case study of nine Korean MNEs, this research makes several

contributions to emerging research on HRM of MNEs from South Korea as well

as the extension of extant research on IHRM strategy. First, it addresses the lack

of empirical research on HRM in the context of MNEs from newly industrialized

economies and emerging markets, which are becoming more prominent in the

world economy. Second, through examining the detailed elements of each HRM

practice, this research identifies the hybridization approach at the element level of

practices as a distinctive IHRM strategy that has hitherto not been highlighted in

the IHRM scholarship. Third, this study addresses the lack of attention to the

liabilities of origin as a key determinant of IHRM approach especially in MNEs

from newly industrialized economies and emerging markets. Fourth, this research

identifies gaps between dominant assumptions and the empirical findings of

emerging MNEs and suggests that studies on MNEs from newly industrialized

economies and emerging markets could contribute to expand extant theories by

challenging their taken-for-granted assumptions.

The findings from the study of Korean MNEs have significant implications

for other MNEs from newly industrialized economies and emerging markets. The

distinctive institutional and cognitive conditions we identified as important in

shaping the IHRM strategies of companies are likely to also be found in MNEs

from other newly industrialized economies and emerging markets. However, such

inference only calls for further empirical investigation on cases of MNEs from

other economies. Examinations of strategic orientations in IHRM of MNEs from

32
newly industrialized economies and emerging markets, and the role of their

distinctive home-country institutional status and cognitive aspects of key actors in

shaping those orientations, promise to be an important future research task.

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 Table 1
Profile of Case Study Companiesa
ID No. Company Industry Total sales Proportion Number of
(billion USD) ofsales abroad employees / % of
(%) employee abroad
1 AutoCo Auto 55.1 75 124,000 / 30
2 ElecCo1 Electronics 135.7 83 190,000 / 50
3 ElecCo2 Electronics 48.2 85 93,000 / 65
4 SteelCo Steel 53.2 39 27,000 / 37
5 CableCo Wire and cable 6.8 70 8,050 / 70
6 ConfCo Confectionery 1.1 52 5,900 / 63
7 EbizCo Online game 0.6 36 3,300 / 27
8 CosmeCo Cosmetics 1.8 16 8,600 / 48
9 InfraCo Heavy equipment 21.6 55 38,000 / 47
a
Source: Annual reports (2010), company websites, interview

40
Table 2
Summary of Global HRM Guidelines of the Case Companies

Component of HRM practices in MNEs 1 to 9 1a 2 3 4 5 6 7 8 9

Job & Grade
Job classification: job family Gb G G M M M M G M
Job classification : job list G G Mb M M M M M L
Job description: category Lb L M M L L M G G
Job description: content L L M M L L M M M
Grade: number G G G G M L M G G
Grade: criteria/definition G G M G M L M G G
Grade: title G L M L M M M G M
Promotion: requirement/ criteria G L M M M L M G M
Promotion: process L G L M M L M M M
Recruitment & selection
Recruiting methods L G L M L L M M M
Recruiting message L L L M M L L L L
Selection: criteria M L L M M L M L M
Selection: assessor M L L M M L M L L
Selection: process L G L M M L M L M
Selection: assessment tools L L L M M L L L M
Learning & development
Succession planning: executive pool G G G M G M L M G
Succession planning: high potential talent L G G M G L L M G
Learning program: leader G G G G G L L M L
Learning program: Common competency G G G G G M G M G
Learning program: profession/ job related L L M M M L L M L
Learning delivery/ operation M L M M M L L M L
Performance management
Performance evaluation factor G G G L G M G G G
Performance measurement item L M M L M M M M M
Weighting of evaluation factors G G G L M M G M M
Performance rating scale G G G L M M G M L
Forced distribution M G G L M M G M L
Evaluation cycle/ frequency G G G L M M M M G
Performance management process G G G L M M M M M
Performance evaluation assessor L M M L M M M M L
Performance management form L G G L M M G M M
Linkages to other HR applications L G G L G M M M M
Common competency G G G L L L G M G
Leadership competency G G G L G L L M G
Job skill/ competency L L G L M L L M L
Competency assessment process G L G L M L M M G
Competency assessor L L G L M L M M G
Competency assessment rating scale G L G L M L G M G
Compensation & benefit
Employee pay structure L G G L M M L G L
Employee base pay range L L L L L L L M L
Employee base pay increase M M L L L L L M L
Employee Incentive L L M L M L L M L
Executive pay structure L L G L M G M M G
Executive base pay range L L G L L G M M M
Executive base pay increase L L G L L G M M M
Executive Incentive L L G L M G M M M
Benefit: employee L L L L L L L M L
Benefit: executive L L G L L M L M L
a
Company ID number
b
G: Globally common (following globally common standards), M: Modified (allowing local
modifications on the global standards), L: Localized (allowing subsidiary discretion to respond to
local needs)

41
Table 3
Implementation of the Corporate Headquarters Guidelines at Subsidiaries: Case of
MNE 1

US US US India India India

Category of assessment
Sales Plant R&D Sales Plant R&D

1. Recognition of the corporate-headquarters guideline regarding subsidiary-HRM practices

Yes Yes Yes Yes Yes Yes
2. Subsidiary’s assessment of the degree of implementing the components of HRM practices which
were defined as ‘globally common’ (following globally common standards) by the corporate
headquarters
Job classification: job family M G1 M1 L1 L M
Job classification : job list M G M M M L
Grade: number G G M L L L
Grade: criteria/definition G G M L L L
Grade: title G M L L L L
Promotion: requirement/ criteria G M M M M L
Selection: criteria (core elements)* G M L M M M
Selection: assessor (HR interview)* G G L G G G
Succession planning: executive pool M M M M M M
Learning program: leader M G L G G M
Learning program: Common competency G G M G G G
Performance evaluation factor G G M G G G
Weighting of evaluation factors M G M G G M
Performance rating scale G G M G G G
Evaluation cycle/ frequency G G M G G G
Performance management process G G M G G G
Common competency G G M G G n/a
Leadership competency G G M G G n/a
Competency assessment process G G M G G n/a
Competency assessment rating scale G G M G G n/a
(Pay philosophy - pay for performance)* G G G G G G
1. G: Adopt the global standard guideline; M: Modify the global standard guideline to accommodate local needs;
L: Utilize HRM practices which were developed locally to accommodate local needs; n/a: Not Applicable (not yet
introduced).
( )* . Additional company-specific information which is not included in the Table2.

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 Table 4
Dominant Assumptions versus Key Findings

Dimension Dominant assumptions Key findings

Overall orientation • Standardization or localization • Hybridization
Level of • Overall HRM function • Detailed element within HRM
standardization • HRM practice practice
Major origin of • Parent company practices • “Global best practice”
practices for
standardization

43

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