TRANSNATIONAL HR SYSTEM

Nowadays, globalization affects every industry. To cope with the challenges of increasing globalization, many multinational enterprises (MNCs) are developing transnational strategies and structures, which mean that they create strategies within the interplay between global standardization and local adaptation. The increasing of the transnationality also reflected in the transnational orientation of their human resource management system (HRMS) as HRM is often interpreted as a support function which can help to transfer the strategic orientation of the firm to the level of employees in an organization. Transnational HRMS can be defined as the sum of HRM policies and practices that MNCs uses to attract, develop and maintain its human resources including globally standardized and locally adapted structures and processes. There are some reasons why an organization especially the multinational transfer the HR practices. The reasons are international competition pressure, international integration and strategies, and organizational politics.

For the purposes of efficiency and the effectiveness of their system, organizations often engage in cross-unit transfers of business practices that reflect their core competencies and superior knowledge and that, they believe to be a source of competitive advantage. HR policies and practices are often considered by top management to be one of those sources. Its need to be address that transfers of HR practices can occur in various directions within the MNC, including transfers from main companies to foreign subsidiaries, from subsidiaries to main companies, or from one subsidiary to another. Firms may look to 'reverse-transfer' policies associated with companies and countries that are dominant in the global economic system, since such policies are likely to be seen to be linked with international competitive advantage. A second reason for transfer is that the degree of international integration and the corresponding strategies of MNCs largely determine the extent to which MCs are likely to transfer their HR practices. The transfer of HR practices is often linked to certain industry sectors. For example, those sectors such as automobiles, IT services and pharmaceuticals, with a high degree of international integration, are easy to transfer HR practices across borders.  The third reason is at political relationships within organizations. The political approach, indicating that actors in organizations can be willing to engage in the process of transfer as a way of obtaining legitimacy and to advance their own interests.  So,  this transnational should transfer effectively especially by the top management in order to get the positive outcome.

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http://www.sciencedirect.com/science/article/pii/S1053482211000039