over subsidiary.
All the findings above can be illustrated by the cases of Taiwanese MNC in the US and
depicted as Table 5.
Table 5
Two cases of illustration
To illustrate our findings further, we would like to supplement our findings with two real
cases of world famous MNCs originated from Taiwanese, Trend Technology and Acer
computer.
In 1996, when Acer planned to launch the US market with its own brand name on the product,
Acer hired a Caucasian CEO to head this project from marketing to sales and the designed of
the prototype for Aspire in its US Subsidiary. The engineering team in the headquarter
Taiwan soon discovered the incompatibility of internal motherboard modules from the design
layout of the prototype presented by the Caucasian CEO of US subsidiary, and brought up
such incompatibility issues in the internal production design . In stead of relying on the
competitive advantage from the headquarters engineering team for production design to
modify and take care of the incompatibility problems, the top management of Acer
headquarter went along with the original prototype presented by the US subsidiary for
production due to the resistant from the US subsidiary to modify the design for US market.
Consequently, Aspire was pushed to launch the US market with one year delay due to the
internal defects brought about more than one hundred million losses within the first two years
since the launch of Aspire in the US market resulted from the countless customer complaints
and product defects. It seems to be reasonable for Acer to insist its competitive advantage
on production design from engineering team at home country on modifying the original
prototype to take care of the incompatibility problems. On the other hand, Acer should have
asked for the collaboration from the US subsidiary to accept the normative integration in the
production function by marketed the modified Aspire in the US.
In contrast, Trend Technology has given a successful example by executing appropriate IHR
controls in the cross-cultural context. Trend utilizes the competitive cultural advantage of
different countries to set up its global control over various value-added activities and employs
host nationals as global functional leaders. For example, Trend Technology sets up its global
financial center in Japan and hired an Indian-Japanese to be its CFO, taking full competitive
cultural advantage of its Indian born CFO for his arithmetic and analytical background whom
was trained for a long period of time in the Japanese company for transparent in corporate
finance. Trend, in addition, sets up its global administrative operation center in the US and
hired a German born American to be the COO, taking full competitive cultural advantage
from the German born COO for his strong management background from IBM and the
German culture in respecting professional norms and building good organizational
infrastructure. Furthermore, the center for detecting virus is set at the Philippines to take full
competitive cultural advantage of the hard-working nature and inexpensive labor costs; the
leading R& D center is setup in the US to obtain the leading technology in the filed, while the
process R&D center is located in Taiwan to take the cultural advantage of the quality
engineers. Other than these, host nationals are hired as the regional marketing CEOs for
market penetration at different geographical regions. To achieve full cultural integration, the
top management of regional and global heads meets once every quarter for a week long
brainstorming workshop to facilitate cross-cultural communication. Since 1998 for five
consecutive years, Trend enjoyed a handsome growth of sales and net profit. In the year of
2004, Trend obtains total sales second to Microsoft globally in the software industry.
CONCLUSION
It is expected that Taiwanese FDI toward USA will continue growing due to its
market attraction. This study investigated Taiwanese companies operating in the USA and
from this study we are able to provided a cross-cultural framework of strategic international
human resource control. Our findings also offer insights to USA subsidiaries of MNCs
contemplating investing in USA markets.
In order to perform subsidiary’s value-added activities, MNCs need to identify the value
and capabilities need of this activity. At the same time, subsidiaries also need to compare the
cultural advantage of home country in terms of these activities. In general, general
management leadership and adaptive R&D require higher capabilities of subsidiary and have
higher home advantage which directed to both high integration and adaptation. Alternatively,
marketing and leading R&D require high capabilities of subsidiary and have low comparative
advantages of home which will direct to low integration and high adaptation. Apparently
production and repairing maintenance require low capabilities and have higher home
advantage which directed to high integration and low adaptation. Finally, administrative
supports require low capabilities and medium comparative advantage of home which direct to
medium integration and adaptation.
In addition, from the perspective of cross-cultural influence input control is designed to
respond to high integration and high adaptation; output control is executed in the case of low
integration and high cultural adaptation; while behavioral control is used to respond to high
integration and low adaptation, simultaneously in the case of low value of subsidiary’s
activities.
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Table 1 Subsidiaries IHR Control and IHR Practices
IHR Control Type IHR Practices
Input
Behavior
Output
1.Same selection procedures or expatriates 2.Approval of staffing managers by headquarters 3.Headquarter provides training and socialization
1.Use of explicit monitoring
2.Frequent feedback to headquarters 3.Centralization by headquarters
1.Use of results-based criteria of appraisal 2. Presence of performance-rewards link 3.Use of monetary incentives
Table 2 Company information
Variables/Co Company A Company B Company C Company D Company E Subsidia-ry’s role 1.Notebook
Table 2 Company information (continued)
Variables/Co Company F Company G Company H Company I Company J Subsidia-ry’s role 1.Computer sales,
ware-
Table3 Taiwanese subsidiaries’ cross-cultural management
Variables/Co. Company A Company B Company C Company D Company E
Comparative Cultural Advantage (Home)
Low-cost OEM Governmental-owned R&D aid
Low-cost Assembly And OEM
Low-cost OEM Low-cost Assembly
Employee Composite 1.80% Vietnamese worker
2.CEO is Taiwan expatriate from HQ
1. 4 from Taiwan (including CEO ) 2. 2 local hired Chinese Americans
3. 2 with technical&
expertise in field
4. 3 Chinese administ- erative support ort work are Chinese descendents from other
skilled workers are stable, willing to cooperate with corp. needs (OT) and
being 2nd largest monitor supplier worldwide
1.American style of management but emphasis on a good interactions/ balance with Taiwanese management mentality
Normative integration Medium-High in operation administration
High in leadership High in leadership Medium in administration Medium-High in leadership Cultural Adaptation Low in operation Medium in R&D High in
Marketing
High in Marketing
Low in administration
Table3 Taiwanese subsidiaries’ cross-cultural management (continued)
Variables/Co. Company F Company G Company H Company I Company J
Comparative Cultural
Low-cost ODM Low-cost ODM Low-Cost ODM &
Advance R& D (Driver IC)
Employee Composite 1.80%non-Chinese (White predominate in sales function, Hispanic in the assembly lines) 2.20%Chinese staffing on
3. 10engineers in India
1. 5 from
Taiwan(including CEO) 2. 3 White predominate on sales and customer service
1. 5 from
Taiwan(including CEO) 2. 12 predominate on sales and customer of corp. culture (respect professional expertise & Normative integration High in leadership
Medium in assembly
Medium-High in leadership
High in leadership High in leadership High in leadership
Cultural Adaptation High in R&D and Marketing
High in Marketing Medium –High in R&D and Marketing
High in Marketing High in Marketing
Table4 Taiwanese’s subsidiaries’ IHR control
Variables/Co. Company A Company B Company C Company D Company E
Input Control 1.emphasis on expertise
&teamwork
2.management are highly identified with corporate goals and being open -minded
3.strong in-house training on professional development
4. mgmt in strict practice to involve in line of work & daily working life of subordinates.
1.similar to government official post off shore 2.management are mostly expatriates from Taiwan
1..take advantage of White people locally for its sales &marketing activities
2.warehousing & repair work are mostly 3. Asian cultures tech support & engineers are mostly Chinese orientation (1-2 days) to train with in-house technical personals.
1. job offers are given to individuals that have good working attitude with high competence of professional capability (local value)
2..placed little emphasis on in-house trainings.
if business needs call for, corp. is willing to hire from else where for strong calibers on sales (obtain talents from rivalry).
1. require good team work to coordinate rush orders; hard work comes second.
2. management level are Taiwanese concentrated plus some Asian American.
3.No in-house training for its own staff.
4. host training camps on product for clients.
5.send out engineers to outside conferences, seminars, workshops for technical updates.
Behavior Control 1.individual appraisal (peer competition)
1. White culture are traditionally placed heavy focus on personal &
family leisure needs and so the corp. will take strong initiative to communicate
individually to retain individual focus on job performance.
1. no formal appraisal done – due to small scale in number of employees 2. do conduct annual face-to-
face interview with employee for his/her annual performance.
Output Control 1.lower than industry standard but very stable.
2.employees need not worry about being layoff.
3.bonus paid out to the Mgmt: 30-40%
4.bonus paid out to employees: 10-15%
2. Asian descendents are traditionally resembled better loyalty to the company and much more willing to cooperate with corp. goals.
1.compensate by sales com- mission.
2.handsome pay scheme to attract White sales force.
3. result-appraisal
1.holding industry standard in compensation 2.give out annual pay raise and bonuses.
Table4 Taiwanese’s subsidiaries’ IHR control (continued)
Variables/Co. Company F Company G Company H Company I Company J
Input Control 1.emphasis on performance, work &
product quality; strong orientation on team work
& proactive working attitude and value hard working spirit.
2.training is not as easily accessible as in Taiwan.
generally go through outsourcing for talent needed in order to obtain real time performance (in stead of training in-house – too slow)
1.secondary mgmt (at WOS level) are decided by HQ
2.White population are employed at all functional areas.
3. placed no emphasis on trainings,corp. is incline to recruit needed talents from else where rather than in-house training.
1.open-minded & respect integrity
2.required approx. 18 months of in-house training on its engineers 3.techni-cal core- competence rely on from Chinese with US education.
4.adapt “mentor” system to guide the young and the new.
5.using “beer burst” to escalate channel of 2. US educated managers are expatriated from HQ
Behavior Control 1.well-documented in corporate recruit
3. placed equal emphasis on individual & group/
team performance.
1.An on- going of once every 2 month the corp.
will call for a
“Development” interview to talk with employees.
Output Control 1.holding industry standard.
2.offering American style of welfare package.
3.bonus paid-out is tied with sales revenue of the year.
1.Corp.has a systematic
“Key Performance Index”
in place to evaluate business operation
3.adapt “fixed” paid on financial compensation.
1. Compensate by sales commission.
2. Handsome pay scheme to attract white sales force.
3.result-appraisal
1. Compensate by sales commission.
2. Handsome pay scheme to attract white sales force.
3.result-appraisal
Table 5 Relationships of Taiwanese MNCs Subsidiary’s Capability and Cross-cultural Management with IHR Control
Subsidiary’s
High High High Integration
High Adaptation
High Low Low Integration
High Adaptation
Low High Medium Integration
Low High Medium Integration