People Management and Emerging Market Multinationals

There is a very extensive body of literature on how multinationals manage their people in different national contexts. However, the bulk of this literature focuses on the case of multinationals from the advanced industrial economies, and to a considerable extent, the United States. Very much less has been written on multinationals with their country of origin being an emerging market, and what there has focuses on a very limited number of preferred cases. The growing importance of emerging economies has lead to an upsurge of strategy research on the topic (Wright, Filatotchev, Hoskisson and Peng, 2005); however, research on HRM has not paid enough attention to Emerging Market Multinational Enterprises (EMNEs). Many EMNEs tend to be smaller in size with considerably lesser resources and international experience than their counterparts from developed markets limiting their ability to transfer management practice across their subsidiaries (Thite, Wilkinson, & Shah, 2012), although there are important exceptions to this rule. This introductory article seeks to contribute to the emerging body of literature in this area, through seeking to encourage fresh insights particularly on the varieties of people management encountered in different national contexts. Correspondence to: Geoffrey Wood, Professor of International Business, Warwick Business School, University of Warwick, Coventry, CV4 7AL UK, Phone: +44 (0)24 765 24502, Email: [email protected]. Emerging market MNCs have become increasingly prominent – and at times, controversial – within both the developing and developed world. This has encompassed such a diverse range of activities such as takeovers of failing Western firms, the buying up of land and mineral resources in Africa, and the establishment of (often) low cost manufacturing companies in target markets (or in countries with which such markets enjoy free trade agreements) in order to circumnavigate remaining tariff barriers. Whilst the diversity of such activity makes it difficult to draw out general trends, a few issues are of particular importance. The first is the political dimension of MNC activity, an issue relatively neglected in the business and management literature. Where MNCs originate in less democratic countries, relations with parent country governments and senior 2 politicians may be closer and/ or more opaque. And, if pressures toward public accountability at home are weaker, this gives such firms more room for maneuver in reaching deals with repressive or corrupt political elites abroad. Secondly, whilst the existing literature on managing people in MNCs primarily focuses on the challenges of managing locals and a relatively small number of skilled expatriates, Chinese MNCs have increasingly brought semiand unskilled labor with them into developing countries in Africa; this development has far reaching organizational, developmental, political and, even, demographic dimensions. Thirdly, decisions to enter markets appear often not to be prompted either by the prospect of low cost labor or particular skills sets, but rather, to secure access to consumers and to raw materials in an age of peak oil and generally escalating minerals prices. There are a number of different classifications with regard to emerging countries (for example, World Bank, UNCTAD, 2006; 2010; FTSE index, 2012; MSCI Barra Index, 2012; Hoskisson, Wright, Filatotchev, & Peng, 2013) but there is no consensus between them. Emerging countries are commonly defined as “low-income, rapid-growth countries using economic liberalization as their primary engine of growth” (Hoskisson, Eden, Lau, & Wright, 2000). Although many commentators focus on the BRIC countries (i.e., Brazil, Russia, India, and China) or VISTA countries of Vietnam, Indonesia, South Africa, Turkey and Argentina (Hennart, 2012), others such as Mexico and Thailand has also increased their respective outward foreign direct investment (OFDI) (Deng, 2012). FDI by developing country firms is not a new phenomenon (Wells, 1983; Lall, 1983, Lecraw, 1993; Kumar and McLeod, 1981) but their global reach and the pace and pattern has recently attracted a great deal of attention from academia (Khanna and Palepu 2006;