Subsidiary’s Perspective

Although a subsidiary’s perspective in international HRM has received little research attention (Briscoe et al. 2009), the subsidiaries should not be treated as passive recipients of the headquarters instructions. Local people can always find a way to avoid policies and procedures which act contrary to their deeply-held values or legal and other social institutions. Local HR professionals make efforts to convey the employees’ voices to the headquarters as a “mediator” and modify the policies so that they are relatively tension-free or compatible with the local conditions.

In general, compared to the headquarters, subsidiaries are in a better position to judge the local political and legal situations and to make appropriate decisions (Tayeb 2005). Moreover, the local HR function as an “interpreter” involves the integration of corporate philosophy and organizational culture into the local operations. Particularly, for subsidiaries operating in countries where their language is different from that of the headquarters, the role of the interpreter is incredibly important. Language, however, tends to be overlooked in the international business management literature (Welch et al. 2005).

In practice, the interpretation of corporate policies by subsidiaries may mislead, which could result in dilution or distortion of the headquarters’ true intention. For example, as seen in Medtronic, when the worldwide performance appraisal systems were applied to employees in foreign subsidiaries, the local HR professionals strived to interpret the performance criteria set by the headquarters into their local language while reading between the lines, because mistranslation of the terms used in the performance criteria could create potential risks leading to rating errors. In various situations, the local HR professionals are required to understand more about the context of the corporate strategies, including HRM, from both the headquarters’ and the subsidiary’s perspectives, than the headquarters’ HR.