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Media Release

September 5 2011

Multinational approaches to people management

The latest research into human resource management in multinational companies in Australia has shown that people management practices vary according to the nationality of the company itself, says UniSA School of Management lecturer Dr Anthony McDonnell.The latest research into human resource management in multinational companies in Australia has shown that people management practices vary according to the nationality of the company itself, says UniSA School of Management lecturer Dr Anthony McDonnell.
 
The research, A Profile of Human Resource Management in Multinational Enterprises Operating in Australia, which also involved academics from the University of Newcastle, Curtin University, La Trobe University and Victoria University, is the most representative study to date on multinational corporations (MNCs) operating in Australia.
 
Dr McDonnell said while MNCs have much in common in the use of certain HR practices, there is no single model of management.
 
“The study shows some notable differences in people management practices according to the nationality of the MNCs. For example, none of the Japanese-owned MNCs offer employee share ownership schemes or share options to employees,” he said.
 
“US MNCs were most likely to use international HR information systems. More than three quarters of US MNCs use these systems, compared to less than fifty per cent of Japanese MNCs. More than seven in ten German and Australian MNCs indicated they engage with trade unions but less than half of US, Japanese and British MNCs do.
 
“Talent management has been commonly regarded as one of the foremost concerns for organisations globally over the past decade. Ninety per cent of US and 80 per cent of Australian-owned MNCs are engaged in talent management. But Japanese firms were the least likely to report engagement in talent management, with just 60 per cent doing so.
 
“There were further interesting results regarding Asian MNCs. For instance, they had the lowest expenditure on training and development for staff yet were the most likely to report that they offer pay in the highest quartiles of the market. They were also the least likely to have formal appraisals for the largest occupational group.”
 
The study, which was carried out in 2010 and early 2011, showed US-owned firms represent the largest cohort of multinationals operating in Australia. It also demonstrated that although China and India are major trading partners, there are relatively few multinationals from either country with significant operations in Australia. 
 
Dr McDonnell said the research could have important implications for businesses in Australia.
 
“The findings demonstrate that the MNC’s country of origin has a strong influence on people management,” he said.
 
“This is important because it suggests that foreign-owned MNCs operating in Australia may bring with them their own style of employment practices. Some of these may be innovative ‘best practices’ – but some of them may be at odds with the Australian business context.”

 



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