International Human Resource Management in Japanese Firms: Their Greatest Challenge

International Human Resource Management in Japanese Firms: Their Greatest Challenge

International Human Resource Management in Japanese Firms: Their Greatest Challenge

International Human Resource Management in Japanese Firms: Their Greatest Challenge

Synopsis

This book examines one of the greatest challenges facing Japanese multinationals as they continue to expand foreign direct investment: how to integrate local managers into the management process of overseas subsidiaries, as well as in that of the parent companies themselves. In the majority of Japanese subsidiaries, management control has remained in the hands of Japanese managers at extremely high cost, but now Japanese firms are considering integrating local nationals into the management process of their companies, a process that may yield significant competitive advantage.

Excerpt

Perhaps the greatest challenge Japanese companies face in expanding their foreign direct investment (FDI) is how to integrate host country national (HCN) managers into the management process of their overseas subsidiaries as well as that of the parent companies themselves. I examine the problems associated with HCN integration in Japanese companies and seek to clarify the extent to which HCN managers are actually integrated. As an integral part of this process I explore a number of important related topics such as: Japanese management in general, the transferability of Japanese management practices to their foreign subsidiaries, international human resource management (IHRM) issues, as well as cross-cultural management and multinational management issues. Investigating the role of HCN managers provides insights into Japanese IHRM through the eyes of the HCN managers themselves and reveals how Japanese multinational corporations (MNCs) actually manage their foreign subsidiaries. I also address numerous misunderstandings concerning Japanese management in general and the management of Japanese foreign subsidiaries in particular.

There are four underlying assumptions that substantiate the importance of effective integration of HCNs. First, globalization of human resource management policies and practices is a positive and prevailing trend among the world's MNCs and those MNCs that do not effectively globalize their operations may find themselves at a competitive disadvantage. Second, effective IHRM offers competitive advantages that are only fully exploited by employing the talents of HCN managers. Third, MNCs must learn to develop and retain talented HCN managers in order to enjoy long-term prosperity. Fourth, HCN managers should play a key role in the management of foreign subsidiaries in their country, at the parent company, or in a third country when the talents they possess warrant such arrangements.

Employing HCNs in management positions offers numerous advantages for the MNC and benefits to the host country. HCN managers usually have an inherent understanding of the local language(s) and culture(s). They are more likely than a parent country national (PCN), on his/her first assignment in the host country, to be familiar with the local business and regulatory environment. The costs associated with employing HCNs are usually much lower than those associated with

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