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MNCs’ HRM Strategy and Country of Origin Effect: Do North American, European and Japanese Firms Really Differ?

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  • Gyu-Chang Yu

    (Hanyang University, School of Business)

  • Woo-Sung Park

    (Kyunghee University)

  • Yung-Ho Cho

    (Ajou University)

Abstract

Based upon the sample of 419 MNCs’ subsidiaries in Korea, we examined the country of origin effect in the choice of MNCs’ HRM strategy: transplantation, localization, and mixed. A multinominal logit regression analysis showed that there is an important country of origin effect in the choice between a localization strategy and a mixed strategy. North American MNCS tended to implement mixed strategy, while Japanese MNCs tended to adopt localization strategy. European MNCs were in the middle. The estimated log odds of choosing a localization strategy over a mixed strategy by Japanese subsidiaries were 1.79 times higher than European subsidiaries and 2.85 times higher than N. American subsidiaries; those by European subsidiaries were 1.59 times higher than N. American subsidiaries. However, the country of origin was not significantly related to the choice between a transplantation strategy and other strategies. We also examined two alternative factors influencing the HRM strategy of foreign subsidiaries: investment strategy and entry strategy. The implications of this and directions for future research are discussed.

Suggested Citation

  • Gyu-Chang Yu & Woo-Sung Park & Yung-Ho Cho, 2007. "MNCs’ HRM Strategy and Country of Origin Effect: Do North American, European and Japanese Firms Really Differ?," management revue - Socio-Economic Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 18(4), pages 392-409.
    • Handle: RePEc:nms:mamere:doi_10.1688/1861-9908_mrev_2007_04_yu
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    File URL: https://www.nomos-elibrary.de/10.5771/0935-9915-2007-4-392
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    References listed on IDEAS

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    3. Anthony Ferner & Matthias Varul, 2000. "‘Vanguard’ Subsidiaries and the Diffusion of New Practices: A Case Study of German Multinationals," British Journal of Industrial Relations, London School of Economics, vol. 38(1), pages 115-140, March.
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    Cited by:

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    2. Cerar, Jelena & Dimitrova, Mihaela & Nell, Phillip C., 2022. "Fostering operational management “Best Practices” in subsidiary plants in the Western Balkans: The role of MNC home-country environment and resource allocation," Journal of International Management, Elsevier, vol. 28(2).
    3. Dash, Rupanwita & Ranjan, Kumar Rakesh, 2019. "An Effectual–Causal View of Managerial Decisions in the Internationalization of Indian MNEs," Journal of International Management, Elsevier, vol. 25(1), pages 101-120.

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    More about this item

    Keywords

    Country of Origin; HRM Strategy; Localization; MNCs; South Korea;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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