n South African Journal of Labour Relations - Management of human resources by foreign-owned banks in Tanzania : the impact of country of origin

Volume 29, Issue Issue-2-3-4
  • ISSN : 0379-8410
  • E-ISSN: 2520-3223



Following the collapse of the Russian socialist economic model there has been an immense growth in privatisation in post-socialist countries. Being reluctant to embrace privatisation policies, such countries have turned to Foreign Direct Investment (FDI), specifically Multinational Companies (MNCs), to provide employment, technology and training opportunities (Dunning 1998; Smart & Smart 2005). MNCs have been in the forefront of transferring their country-of-origin business practices across nations. However, when MNCs implement their home policies in host countries, they largely ignore the employment policies of local institutions (Horwitz, Kamoche & Chew 2002). There are number of reasons: Firstly, MNCs often claim that their practices are superior. Secondly, local institutions are reluctant to intervene in MNCs' activities for fear of provoking job losses. Thirdly, the nature of the services MNCs offer to customers, shareholders and their employees may complicate localisation. Fourthly, the nature of their long-term operations may depend on influences in the country of origin. The conclusion drawn in this article is that, despite the need to learn about and adapt to certain elements of localisation, MNCs are largely embedded in their country-of-origin policies. A further complication is that most MNCs are sector and globally oriented in their operations, and are therefore likely to implement global HRM practices across their operations, thus disregarding localisation. Two Anglo-Saxon financial institutions operating in a similar sector and country were studied to determine the influence of their country of origin on their HRM policies. <br>The response of the institutions and people in the host countries to the behaviour of the MNCs was also studied. A proposal on incorporating the HRM practices of the MNCs and the host nation is presented.

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