Latest Research: Knowledge Transfer of HRM Practices Between Parent-country and Subsidiary

imagesCA10N3V7Corporate expatriates have always been an important group of globally mobile employees, because they can serve various organizational aims by fulfilling either practical or more strategic roles. For example, an employee can be sent on an international assignment to share important knowledge and optimize certain processes in a new company subsidiary, or on the other hand, learn how processes in a foreign subsidiary work and gain some important knowledge to be brought back home. Indeed, in the field of international HRM research expatriates are seen as an important link between the parent organization and its foreign subsidiaries, especially in terms of knowledge transfer (Reiche, Harzing, & Kraimer, 2009).

Further developing the topic, recent research by scholars Chang and Smale (2013) explores the role of expatriates in the transfer of parent HRM knowledge to a company’s foreign subsidiaries. Given their role as ‘ linking pins’ between the parent organization and its subsidiaries, the authors argue that expatriates are also highly involved in exchanging HR-related practices. For example, the presence of expatriates can lead to standardization, i.e., making the practices of the parent and subsidiary organizations more similar. In addition to such standardizing practices, expatriates also play a role as ‘cultural carriers’, which means they promote organizational values and norms. Finally, expatriates can also deal with the implementation of corporate strategy at different levels in the subsidiary, all of which is closely related to HRM. However, as the study authors highlight, expatriates typically do not posses enough knowledge of HR, and HR professionals rarely have expatriate experience themselves. As such, the authors’ research aimed to look at how this lack of HRM knowledge influences expatriates’ ability and motivation to receive and transfer new HRM knowledge from the company’s parent organization to its foreign subsidiaries.


Study results

Based on interviews with 60 expatriate managers located in British subsidiaries belonging to four Taiwanese multinationals, the authors conclude that non-HR functional background and lack of HR experience inhibit knowledge transfer, both from the perspective of expatriates as a knowledge receiver and a knowledge source.

In terms of knowledge acquisition, expatriates’ non-HR functional background and lack of knowledge in the area turned out to be a barrier to understand the best practices, their importance for the subsidiary and their links to business objectives. Moreover, this lack of understanding also translated into reluctance for seeking help or advice from corporate HR. All in all, lack of understanding and hence little value attributed to corporate HRM practices translated into a general demotivation and frustration of international assignees.

In regards to knowledge sharing, when coming to the foreign subsidiary, expatriates found it difficult to convince local colleagues of why the corporate practices were better and needed to be implemented. Moreover, the local managers questioned the HR competencies of expatriate managers, and thus were reluctant to implement the corporate know-hows.


Practical Implications

Naturally using international assignees is a good way of transferring HRM practices between headquarters and subsidiaries. However, in light of the study’s results, some measures for overcoming possible knowledge transfer barriers should be implemented.

First of all, it is suggested to complement the use of international assignees with other formal and informal mechanisms of HRM transfer. For example, corporate values and norms can be transmitted at the organizational level by means of trainings and other promotion materials.

Second, the ability and motivation of international assignees could be supported and enhanced through pre-departure trainings and assignee selection procedures. Indeed, if the chosen assignee does not understand and acknowledge the importance of HRM practices and the need for their transfer, the process is very unlikely to work.

Lastly, the authors suggest ensuring a sufficient degree of mobility of HR professionals between HQ and subsidiary, in either direction. This will help raise awareness of HRM realities on both sides, and hence can help in harmonizing HRM practices, so that it would fit the business needs on both sides. Echoing this notion, my own research on knowledge transfer by inpatriates argues that it is not only the ability and motivation of inpatriate managers that matter, but also the motivation for knowledge sharing and exchange of the HQ employees.


Further reading:

Chang, Y.-Y., & Smale, A. (2013). Expatriate characteristics and the stickiness of HRM knowledge transfers. International Journal of Human Resource Management, 24(12), 2394-2410.

Reiche, B.S., Harzing, A.-W., & Kraimer, M.L. (2009). The role of international assignees’ social capital in creating inter-unit intellectual capital: A cross-level model. Journal of International Business Studies, 40(3), 509-526.