International Human Resource Management-MJ Version

function, it will tend to be more localized than most other functional areas.
However, MNCs do differ in the extent to which they transfer their HR prac-
tices to their overseas subsidiaries. Taylor et al. (1996) distinguish three orien-
tations that reflect the general philosophy underlying the MNC’s international
HRM system: adaptive, exportive and integrative. MNCs with an adaptiveori-
entation design HRM systems for their subsidiaries that are reflective of the
local environment (high local isomorphism, low internal consistency). This is
consistent with Perlmutter’s polycentric orientation. An exportiveorientation
leads MNCs to transfer their parent company HRM system to their subsidiaries
(low local isomorphism, high internal consistency) and is consistent with
Perlmutter’s ethnocentric approach. Finally, an integrativeapproach combines
internal consistency with allowance for some local isomorphism and attempts

60 International Human Resource Management

Three types of HQ orientation

Headquarters orientation

Organization Ethnocentric Polycentric Geocentric
design

Complexity of Complex in home Varied and Increasingly
organization country, simple in independent complex and
subsidiaries interdependent

Authority, High in Relatively low in Aim for a
decision-making headquarters headquarters collaborative
approach between
headquarters and
subsidiaries

Communication, High volume to Little to and from Both ways and
information subsidiaries (orders, headquarters; little between
flow commands, advice) between subsidiaries; heads
subsidiaries of subsidiaries part
of management
team

Identification Nationality of Nationality of host Truly international
owner country company but
identifying with
national interests

Perpetuation Recruit and Develop people of Develop best people
(recruiting, develop people of local nationality everywhere in the
staffing, home country for for key positions in world for key
development) key positions their own country positions
everywhere in the everywhere in the
world world

Source:adapted from Perlmutter, 1969: 12

TABLE 2.5