The Transfer of Human Resource Management Practices within MNC Subsidiaries: The Case of Taiwan and China

In this paper, we try to explore the impact of socio-contextual variables on the transfer of human resource management (HRM) practices between a dyad of subsidiaries within multinational corporations (MNCs). The sample is composed of eighty-nine multinational corporations' manufacturing affiliates in Taiwan. The results show that subsidiary's leveragability of human resources is positively associated with HRM practice transfer. Availability of appropriate human resources is found to have a significantly correlation with the transfer of HRM practices. Asymmetry of human resource quality between Taiwan and China is negatively associated with HRM practice transfer. This study suggests that headquarters should design incentive mechanisms to weaken the effects of agency problem and foster the transfer of HRM practices. In addition, headquarters should also try to close the gap of human resource quality among subsidiaries in order to facilitate the transfer of HRM practices.