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External influences on compensation systems in multinational enterprises : some comparisons of subsidiaries and companies in Australia and Singapore


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Wright, Ken,1925- 1999 , 'External influences on compensation systems in multinational enterprises : some comparisons of subsidiaries and companies in Australia and Singapore', PhD thesis, University of Tasmania.

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Accompanying the world-wide growth of multinational national enterprises (MNEs)
has been an increasing interest in the broad issues of international human resource
management (IHRM) and the management of people in MNEs. The uniqueness of
managing human resources in an MNE is the need for the organisation to operate in
more than one national context, possibly with three different categories of employees
— host country, parent country, and third country nationals. Taking into account the
unique elements of the external environment in each country of operation presents
particular challenges for the design of human resources policies and practices,
including compensation (remuneration) systems.
This thesis focuses on the compensation systems of MNE subsidiaries, and uses the
guiding question: 'How does the external environment of an MNE subsidiary
influence the design of its compensation system?' Adopting a case study
methodology, the thesis examines the compensation systems of five MNEs (over the
period 1992-95) by studying pairs of subsidiaries and companies based in Australia
and Singapore. Two of the MNEs were European owned, and three Australian
owned. The Summary Profile of Experiential and Algorithmic Compensation Patterns
of Gomez-Mejia and Balkin (1992) is applied to each pay system, and the similarities
and differences analysed. Possible key external environmental differences and some
internal characteristics that might have caused those similarities and differences in
compensation design are then suggested for each MNE. In addition, the roles of the
corporate and national head offices in the compensation design of their subsidiaries
are explored. While not usually included as an external influence on human resource
management of MNEs, the MNE head office does form part of the integrated
organisational network within which MNEs operate.
The external factors receiving specific attention for their impact on subsidiary
compensation design are employment legislation, industrial relations systems,
economy and incomes policies, and national culture. While the thesis analyses these
attributes separately for simplicity, it is recognised that they are largely interdependent
(Jackson & Schuler, 1995), and that it is impossible to rigorously determine the
impact of each variable and its interaction with others. The main outcome of the
thesis is, therefore, a discussion leading to an explanatory framework on the influence
of the external environment and the MNE head office on MNE subsidiary
compensation systems, together with some propositions grounded in the existing
literature and case study findings. The thesis concludes with a consideration of the
implications of the findings for strategic IHRM theory and practice, and further

Item Type: Thesis - PhD
Authors/Creators:Wright, Ken,1925-
Keywords: International business enterprises, International business enterprises, International business enterprises, Corporations, Foreign
Copyright Holders: The Author
Copyright Information:

Copyright 1999 the Author - The University is continuing to endeavour to trace the copyright owner(s) and in the meantime this item has been reproduced here in good faith. We would be pleased to hear from the copyright owner(s).

Additional Information:

Thesis (Ph.D.)--University of Tasmania, 2000. Includes bibliographical references

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