The transfer of Japanese‐style HRM to subsidiaries abroad

PurposeThe purpose of this research is to empirically examine the extent to which the Japanese‐style human resource management (HRM) model is being transferred to subsidiaries, given the contextual characteristics of the Malaysian environment.Design/methodology/approachThe transferability of Japanese‐style HRM is examined through an analysis of the policies and practices of 69 Japanese subsidiaries and focuses on the following specific areas of HRM: employment policies and practices, remuneration systems and career development policies and practices; and management strategies and workplace industrial relations practices.FindingsOverall, the findings suggest that the key elements associated with the Japanese‐style HRM as described in most of the literature are either present to a very limited degree or completely absent. It seems clear that the transfer of the distinctive Japanese‐style HRM, and especially the “four pillars” is not a priority of management. To a certain extent, most companies seem uncomfortable with the characteristics of the local labor. However, the HRM policies and practices in the companies surveyed are not simply the result of the limitation of the local environment and resources; rather they are “opportunist” management strategies which, by taking account of these contextual limits, seek to control the subsidiaries' operations.Originality/valueBy confirming many of the findings of research on the HRM policies and practices of Japanese subsidiaries, especially in other developing countries and, to a certain extent, some developed countries, this study demonstrated that while “technical” elements (the hardware) of the Japanese model are readily being transferred, most of the HRM elements (the software) are adapted in significant, and not always subtle ways. Thus, the issue of the transfer of Japanese‐style HRM abroad in general and in Malaysia particularly is not so much a question of whether the Japanese want to transfer their distinctive policies and practices as of whether they need, or indeed are able, to do so. The findings of this study also demonstrate that what most Japanese subsidiaries achieve is a system of labor control – this is the essential purpose of the HRM practices under considerations: to make the production methods work and enable the company to make and sustain profit – and indeed what the Japanese have achieved and secured in Malaysia is a highly effective system of control (given local conditions).