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The most debatable reason for such transfer can be global competition pressure. Transferring policies and practices across their subsidiaries is looked as an incentive on the basis of competitive advantage (A Review of Theories on Transnational Transfer of HR Practice within Multinationals, Tianyuan Yu, in May 2009). According to Kostova T. (1999) in order to achieve synergy and effectiveness, MNCs often go for transnational transfers of their HR policies and practices that replicate their business proficiency and core competencies, which can be classified as another approach of achieving competitive advantage. A transnational transfer of the HRM policies is considered one of the top sources of competitive advantage as they originate from the national organizational system of a MNC. According to Hall and Soskice (2001), a socio-economic system to a country is responsible of a firm’s comparative advantage. According to the social environment that a firm operates in, it develops and possess such suitable HR policies that drive them to achieve a comparative advantage, and hence they tend to believe in transferring them across their subsidiaries to achieve a comparative advantage, which can be known as ‘country of origin’ effects. Furthermore, the policies that a firm develops are merely firm-related, as it is not important that companies of the same country of origin share
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The stronger the need is, the more the necessity of integrating these policies will grow, and hence there is a probability that the HR practice will resemble the home-country practices. The more dependent a subsidiary is to their parent, the more the firm will try to apply their control over their subsidiaries. Implementing the home-based HR practices is just another way to parent control. Through such approach a MNC tends to believe that the stronger their control is over their subsidiaries, there are fewer chances of them being similar to the region ones around which their subsidiary operates. One of the main purposes behind having this control on their subsidiaries is of the anxiety a MNC carries that their subsidies might adapt local policies, and they might lose their grip on their subsidiaries. Ultimately, the level of transition depends on the level of control a MNC exerts on their
The stronger the need is, the more the necessity of integrating these policies will grow, and hence there is a probability that the HR practice will resemble the home-country practices. The more dependent a subsidiary is to their parent, the more the firm will try to apply their control over their subsidiaries. Implementing the home-based HR practices is just another way to parent control. Through such approach a MNC tends to believe that the stronger their control is over their subsidiaries, there are fewer chances of them being similar to the region ones around which their subsidiary operates. One of the main purposes behind having this control on their subsidiaries is of the anxiety a MNC carries that their subsidies might adapt local policies, and they might lose their grip on their subsidiaries. Ultimately, the level of transition depends on the level of control a MNC exerts on their