Human Resource Management

Human resources are considered to be a potential source for competitive advantage. It is seen as the accumulation stock of knowledge; skills and abilities that individual possess which the firm has built over years through identifiable expertise (Cappelli and Singh, 1992). The success of firms can be measured from the ability to synthesise the firm’s HR with strategic objectives of the organisation. According to Klein et al. (1991:11), ‘If expertise manifestation behaviour is consistent on the formation of skills, it becomes a basis for competitive advantage’. The scholar further argues that a dedicated skill comes from employees’ continuous application of skills to a particular tasks, product and project. Through learning and strategic combinations of dedicated skills, skills are then transforms to core skills which then can promote new product and new market (). These resource capabilities are indeed helpful for MNC exploiting developing market to gain competitive advantage and hereby increasing market share. However, there have been various strategic plans by MNC to successfully gain competitive advantage in developing market taking into account theoretical frameworks and issues emanating from parent company and host county-specific.

The field of international human resources management has been characterised by three broad approaches which gives an insight on cross-cultural management issues (Laurent, 1986), comparative HRM research (Brewster, 1998; Hendry, 2003), and international HRM in multinational corporations. The latter is commonly recognised as international HRM which involves diverse complexities due to diversity of national contexts and different national categories of employees (Dowling and Welch, 2004). An impor...

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...n et at. (1991), specifically and critically view IHR strategic relationship between the parent company and its subsidiaries. This relationship can be viewed in two ‘fits’. The first fit is the external-outside organisational fit which encompasses the level of fit between the subsidiaries IHR undertakings and the cross-national and cross-cultural environment that is operating in which includes across it boundaries. On the other hand, internal-outside fit is viewed as IHR activities of the subsidiary and the IHR activities across other MNC within its boundaries. In summary, this business strategy possess that a subsidiary needs to put into consideration its roles and standing within the MNC and well as its place amongst the local, national and global environment when developing IHR strategies. This business strategy consideration is illustrated on Figure 2.