the recruitment and selection practices utilized by aWrm. LargerWrms tend to use
more standardized and formal processes.
Similarly, some aspects of performance appraisal are argued to be strongly
inXuenced by culture. Aycan ( 2005 ) suggests that what is considered ‘good per-
formance’ is culture bound. Individualistic cultures tend to emphasize objective
and quantiWable measures that focus more on productivity, quality of work, and
eYciency. In contrast, collectivist cultures are more likely to emphasize group
harmony and relationships. Culture also aVects the type of performance evaluation
and the ways in which performance feedback may be given. Moreover, institutional
factors such as industry characteristics inXuence performance appraisal. For
example, private sector, manufacturingWrms tend to emphasize productivity and
work outcomes.
Diversity management initiatives are argued to be an important part of trans-
national HRM practices, as they enhance appreciation of socio-political and
cultural diVerencesandsimilarities (see this Handbook, Chapter 13 ). Diversity
management initiatives are speciWc activities, programs, policies, and any other
formal processes designed to improve management of diversity via communica-
tion, education and training, employee involvement, career management, account-
ability, and cultural change. For example, diversity initiatives may include practices
such as training programs to reduce stereotyping and to improve cross-cultural
sensitivity and skills (Wentling 2000 ). Some transnationalWrms have developed
global approaches to diversity initiatives. For example, Thomas ( 2004 ) reports that
IBM is developing a global strategy to better address diversity issues facing the
company around the world. However, researchers have suggested that diversity
management initiatives typically require a decentralized approach (Egan and
Bendick 2003 ), because diversity initiatives are required to be responsive to local
cultural and institutional factors, such as equal employment opportunity laws.
Further, Egan and Bendick’s ( 2003 ) research shows that diVering attitudes to
diversity management across national contexts have led some MNCs to emphasize
local responsiveness for diversity management initiatives.
- 2 HRM Structure
In addition to HR practices being inXuenced by culture and institutional factors,
the structure of the HR function itself is an enduring and important concern for
transnationalWrms (De Cieri and Dowling 1997 ). Research has shown that trans-
nationalWrms with a variety of modes of operation, including, for example, joint
ventures and/or wholly owned subsidiary units, across a diverse range of national
contexts, are likely to have network structures. Network structures provideXex-
ibility by giving autonomy to local/country operations that are quite independent,
while also facilitating communication between these separate activities to enable
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