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Lookup NU author(s): Dr Parth PatelORCiD
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In the past few decades, a significant amount of research has been conducted on examining the control mechanisms that headquarters of multinational corporations (MNCs) from developed countries deploy and exert to manage the activities of their subsidiaries in developing countries. However research is sparse in terms of understanding how multinational corporations from emerging economies (EMNCs) control their subsidiaries in developed countries. This study explores the control mechanisms and especially the people-centric controls used by Indian MNCs from the information technology (IT) sector and the consequences they have on the use of and discretion over, a variety of Human Resource Management (HRM) practices in their Australian subsidiaries. The research draws on data collected through 12 in-depth case studies incorporating interviews with top directors and HR managers at the subsidiary-level. The findings reveal that Indian MNCs use high degrees of output (information-based) and behaviour (people-based) controls and moderate degrees of cultural (people-based) control at their Australian subsidiaries. This was possible due to the global staffing practices adopted by Indian MNCs that facilitated people-based control (through transfer of expatriates) across their Australian subsidiaries. Consequently, these control mechanisms influenced the subsidiary’s discretion over HR policies and practices due to their close alignment with them. This allowed Indian MNCs to replicate their parent-country HRM practices to their subsidiaries in Australia. These findings indicate that people-centric control mechanisms play a very important role in managing the activities of foreign subsidiaries in EMNCs. They also explain the unexplored link between normative controls and their influence over the subsidiary’s HR policies and practices. In doing so, they help us understand the means by which EMNCs manage their HQ-subsidiary relationships in developed countries. This study thus makes a significant contribution to the under-developed but growing field of research on multinational corporations from emerging economies.
Author(s): Patel P
Publication type: Conference Proceedings (inc. Abstract)
Publication status: Published
Conference Name: Academy of International Business Australia and New Zealand Chapter (AIB-ANZ) Annual Symposium
Year of Conference: 2014
Acceptance date: 01/11/2014
Series Title: Changing and Leading International Business: A Cross Disciplinary Perspective
Sponsor(s): Charles Sturt University
