3. Analysis of WNS Global Service’s HRM approach - 3

3.3 Practical managerial lessons and broad implications for HRM practices

Practical managerial HRM implications which can be drawn from the WNS case are the following. WNS’s HRM strategy is based on a best fit approach designed to achieve an optimal vertical fit with the overall corporate strategy with a strong alignment towards the competitive strategic objectives of employee productivity and product quality on the company’s domestic market (Basset 1999). WNS is immensely successful on the SRI LANKA market because it matches HR approaches to corporate, competitive and functional level strategy to achieve a sustainable competitive advantage.

Internationally, WNS is not able to transfer the SRI LANKA model of best fit to its subsidiaries. Environmental factors like legal requirements and cultural differences make it impossible to use a system which is based on individual performance (Björkman&Galunic 2003). WNS is limited in fitting its HR approach to what would be best for reinforcing its efficiency and quality driven competitive advantage.

The WNS case illustrates that in a global context companies are influenced by a multitude of contingences. A universalist HRM approach within a MNC applying a certain bundle of HRM best practices will not render an optimal outcome for the entire organization (Sims 2007). According to Dowling et al (2008) International managers need to take a more detailed approach by identifying individual circumstances of national subsidiaries and fitting HRM strategies to achieve a mutual enforcement between local requirements and corporate strategy. For some a best practice approach might be a superior solution while for other subsidiaries only certain best practice elements (e.g. hiring, training, rewards etc.) might prove to be effective: In Europe WNS fails to develop any sort of HRM strategy which can satisfy the environmental requirements and reinforce its competitive differentiation strategy at the same time. Due to a lack of international knowledge WNS’s managers rely on the status quo (Hastings 1999). In Europe an introduction of best practice methods with a HPWS would have immediately allowed ensuring better control and performance in the newly acquired international subsidiaries through standardized practices (Maloney and Morris 2005). The best fit approach in WNS’s Chinese subsidiary incorporates lessons learned from the European failure: WNS is able to adapt HR strategy to environmental requirements of culture, legal requirements and the market and at the same time introduce best fit approaches in hiring and employee development to support its competitive strategy.

The broader implication is that there is no single best way to approach HRM. Companies should design their approach according to elements of best practice and best fit to achieve the best possible outcomes. Studies conducted by Mendonca&Kanungo (1994) and Cyert& March (1963) show that the adaption of HRM approaches to local international environments is essential for companies leading to and adaption of processes and practices to fit with the local workforce. Successful MNCs like Unilever, Royal Dutch Shell and Nestlé are those that conduct HRM strategies based on localized requirements incorporating elements from best fit and also standardized best practices (Briscoe & Schuler 2004). In this context a localized resource-based HRM approach can be a good possibility to create synergies between internal competences with strategy and performance.