The transfer of Japanese human resource management in the Indian automotive industry

The transfer of Japanese production methods overseas, which involves the transference of personnel as well as production systems is well documented (Koike, 1998; Legewie, 2002; Kiyokawa and Oba et al., 2006; Abo, 2007; Rose and Kumar, 2007; Itagaki, 2009). However, little is known about the transfer of Japanese HRM in India. This research fills the gap in the literature by examining the transfer of Japanese HRM practices in the Indian automotive industry. Two research questions were designed to provide an in-depth exploration of the issues. Firstly, what are the challenges faced by Japanese firms in India when they transfer established HRM practices from Japan? Are they exacerbated by the diverse institutional and cultural environment in India? Secondly, have Japanese firms adapted their HRM in India in response to the challenges they face there? If so, are these adaptations specific to the challenges they face in different regions?

Data from over 40 interviews conducted 2011-16 at six Japanese automotive firms indicate that time and experience have alleviated the culture shock and risk of operating there. However, they have struggled with antagonistic Indian trade unions which contrast with the traditional conciliatory enterprise union at Japanese firms. India is a dynamic if sometimes boisterous society (Khanna, 2009) which can be challenging for foreign firms. This diverse cultural landscape led to firms developing strategies appropriate to the locality they operate in. For example, two firms have incorporated the role of national automotive unions in negotiating pay rises leading to the highest pay rise ever awarded in the Indian automotive industry in June 2016 (Times of India, 11 June 2016). This indicates that Japanese firms can adapt their established way of operating. The experiences of firms in this study are relevant for firms who set up operations in emerging markets with heterogenous business environments.