When in Rome …? Human resource management and the performance of foreign firms operating in India

Abstract

Purpose

The purpose of the paper is to examine the kind of HRM practices being implemented by overseas firms in their Indian subsidiaries and also to analyze the linkage between HRM practices and organizational performance.

Design/methodology/approach

The paper utilizes a mixture of both quantitative and qualitative techniques via personal interviews in 76 subsidiaries.

Findings

The results show that while the introduction of HRM practices from the foreign parent organization is negatively associated with performance, local adaption of HRM practices is positively related with the performance of foreign firms operating in India.

Research limitations/implications

The main limitations include data being collected by only one respondent from each firm, and the relatively small sample size.

Practical implications

The key message for practitioners is that HRM systems do improve organizational performance in the Indian subsidiaries of foreign firms, and an emphasis on the localization of HRM practices can further contribute in this regard.

Originality/value

This is perhaps the very first investigation of its kind in the Indian context.

Citation

Björkman, I. and Budhwar, P. (2007), "When in Rome …? Human resource management and the performance of foreign firms operating in India", Employee Relations, Vol. 29 No. 6, pp. 595-610. https://doi.org/10.1108/01425450710826104