Human resource management practices in subsidiaries of Western multinational enterprises in Ghana: The interplay of standardisation and localisation

Abstract

Western multinational enterprises (MNEs) often face specific challenges when seeking to transfer their human resource management (HRM) practices to their operations in Ghana. The host context exhibits peculiar cultural and institutional environments, different from the West, and these pose significant challenges to the implementation of western-centric HRM practices. Within a diverse and complex context such as Ghana, corporate headquarters of MNEs seek to implement practices which are consistent with the practices that they use at home while host context institutions prefer to utilise local practices. This requires managing the interplay of standardisation and localisation of HRM practices in the host context. Despite the increasing presence of foreign subsidiaries in Ghana, the International Business literature has so far paid limited attention to transfer of HRM practices in relation to this country, and Africa more generally. In this thesis I explore how western MNEs apply their HRM practices in Ghana. In particular, using institutional theory, I investigate how the normative institutional distance between the home countries of western MNEs and Ghana as a host country influences the standardisation and localisation of HRM practices. I employ a qualitative multiple case study approach using semi-structured interviews with employees and managers in purposefully selected foreign subsidiaries in Ghana and triangulate interview data with document analysis. The results suggest that the normative institutional distance does have an influence on the standardisation and localisation of HRM practices. The interplay is as a result of negotiations between subsidiary managers in Ghana and unions/employee representatives and local Ghanaian stakeholders – chiefs and community leaders – with consideration given to both the goals of subsidiaries and the Ghanaian context. This thesis contributes to the theoretical scholarly debate over whether aspects of both localisation and standardisation are implementable concurrently and it explains methodologically how and why interplay occurs. Practical implications associated with my study involve MNEs making decisions about which practices to transfer and which not. Local companies can collaborate with subsidiaries of MNEs and learn innovative HRM practices.