The Motivation, Facilitation and Limitations of HRM Practice Diffusion: A Study of Chinese Multinationals

With the increasing global integration, diffusion of “best practice” is a critical activity in an MNC, in particular, MNCs from countries who have recently joined in global markets to learn the best practice in their international operations. In the current research on MNCs’ HRM diffusion, ‘reverse diffusion’ is argued to be an important approach in the internationalision of managements. However, there is little empirical evidence in support of this argument. This paper uses the UK subsidiaries of Chinese MNCs as an example to explore the nature of the diffusion activities in these companies and its impact on the whole MNC. The paper explores that ‘reverse diffusion’ played a positive part in the internationalisation process of these companies, although the impact on the home firms is limited. It has also been found that some new forms of the international learning are emerging in these Chinese MNCs. This suggests that diffusion in MNCs can be varied with different national and organisational characteristics.