Our writers can help get your essay back on track, take a look at our services to learn more about how we can help. Human resource management as such refers to a rational and strategic approach to managing people who work in an organization to achieve the goal of the organization collectively armstrong, 2003. The successful diffusion of hrm practices across subsidiaries by the mncs either makes or breaks them. They strive to strike a balance between home country and host country practices by prioritising what needs to be adopted from each. To a large extend they try to converge their best practices so that coordination and management is easy.

They also try to integrate the practices of host countries so that there is acceptance in those countries, but the degree of this integration varies from one mnc to another. Multinational corporations multinational corporations or mncs are known by different names transnational companies, multinational enterprises, global corporations or international corporations. The origin of mncs could be traced back to the 1860s, but it was only after the second world war that the world has seen such a rapid growth in their numbers cherunilam, 2006. The british east india company and royal africa company are examples of some earlier mncs. The ilo defines mnc as a company having head quarters in the home country and operations in several other countries. The main reason why firms chose to go global could be attributed to the uneven distribution of factor endowments and failures in the market.

Mncs generate almost 50% of the globe's industrial output and about 67% of the world trade gooderham amp nordhaug, 2003. Now a day's mncs are present in all parts of the world but the bulk of them belong to the triad nations of usa, european union and japan. Some of the points to consider for a company to be called an mnc are as given below saleem, 2006.

A types of mncs caves, in his book multinational enterprise and economic analysis, divides mncs broadly into three groups caves, 1996. Horizontally integrated companies are those which sell the same kind of goods across nations, for example, soft drink companies, confectioneries etc. In the case of vertically integrated enterprises, the output in some of their plants in one country serves as input in some of their plants in other countries. The reason for the dispersal of the units could be attributed to the geographical reasons. An industry known for its vertical integration is the oil industry where the crude oil is dug in one location and its processing done in another location.

The third and last group described are mncs that show no evidence of either vertical or horizontal integration caves, 1996. The companies belonging to the third group concentrate on spreading business risk, especially systemic risks. Mncs can be further classified as financial controllers and integrated international companies tempel, 2001. Financial controllers are companies where there is very strong control of the subsidiaries by the head quarters and there is also a great degree of dependence on the parent country by the subsidiaries for resources.

The integrated international company also has a high degree of authority over its subsidiaries and also there is a high degree of resource dependence. The factor that distinguishes the financial controllers from the integrated companies is that there is a certain degree of independence when it comes to resource. B foreign direct investment it is seen that the more the foreign direct investment fdi , the bigger the population of mnc subsidiaries in that country.