DAVIS 1

William R. Davis

HRM 540

9 June 2023

Discussion Topics - Week 2

QUESTION 2: What are the issues of standardization and localization in general for MNEs

and how do they particularly manifest themselves in IHRM activities?

Multinational firms seek both standardization and localization, as each has its own unique

place and advantages. Standardization of HRM procedures allows for consistency, transparency,

and aligns geographically separated international locations to defined standards and principles.

Standardization of HRM practices are heavily dependent on guidance and direction from

corporate headquarters. Localization allows for rapid responses based on local culture, traditions,

and government policies. Localization of HRM practices are far more independent, and are

driven by local managers and circumstances.

The issues of standardization and localization in general for MNEs is finding the exact

balance of HRM practices concerning strategy structure, firm size, and maturity. Depending on

the size and strength of the entire organization or the influence of the local cultural and

institutional environment, one or the other will typically take the lead in whether a firm has more

standardization or localization. HRM practices are one item that many MNEs make an effort to

standardize. An example provided in our textbook explains about a standardized compensation

and bonus system for top executives. This strategy was aimed at strengthening the performance

culture throughout the entire company and facilitating a common orientation for all managers.

(Dowling et al., 2017).

 DAVIS 2

Works Cited

Dowling, P. J., Festing, M., Engle, A. (2017). International Human Resource Management, 7th
Edition. Pearson Higher Education