In addition, transaction costs may be too high to implement HR practice that is different from the HR policies being practice at the headquarter. Thus, to lower costs, it is critical for MNC to adopt HR standardization. (Dickmann,2008).

Despite the argument in support of standardization of HR, there are challenges that a global company may face while implementing standardized HR practice on a global basis.

The challenge in practicing standardization is that MNC needs to develop a HR resources strategy to attract, retain, and motivate talented employee that is well suited to a particular setting. With cultural difference among different countries, integration of HR practice from the headquarter may not be suitable to the company subsidiaries. Typically, it is critical for a global company to assess the strategy that could be employed as well as identifying main mechanisms that the company could use to facilitate integration and knowledge transfer. Cultural...
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