Page 250 - DMGT548_GLOBAL_HRM

Unit 13: GHRM Trends and Future Challenges

Very few companies come close to achieving this. Most multinational companies do not have Notes
the leadership capital they need to perform effectively in all their markets around the world.
One reason is the lack of managerial mobility. Neither companies nor individuals have come to
terms with the role that managerial mobility now has to play in marrying business strategy
with HR strategy and in insuring that careers are developed for both profitability and
employability.
Ethnocentricity is another reason. In most multinationals, HR development policies have tended
to concentrate on nationals of the headquarters country. Only the brightest local stars were
given the career management skills and overseas assignments necessary to develop an
international mindset.
HR directors rarely have extensive overseas experience and their managers often lack business
knowledge. Also, most HR directors do not have adequate information about the brightest
candidates coming through the ranks of the overseas subsidiaries. “HR managers also frequently
lack a true commitment to the value of the multinational company experience,” notes Brian
Brooks, group director of human resources for the global advertising company WPP Group Plc.
The consequent lack of world-wide multi-cultural managerial talent bites into companies’ bottom
lines through high staff turnover, high training costs, stagnant market shares, failed joint ventures
and mergers and the high opportunity costs that inevitably follow bad management selections
around the globe.
Companies new to the global scene quickly discover that finding savvy, trustworthy managers
for their overseas markets is one of their biggest challenges. This holds true for companies
across the technology spectrum, from software manufacturers to textile companies that have to
manage a global supply chain. The pressure is on these newly globalising companies to cut the
trial-and-error time in building a cadre of global managers in order to shorten the leads of their
larger, established competitors, but they are stymied as to how to do it.
The solution for multinationals is to find a way to emulate companies that have decades of
experience in recruiting, training and retaining good employees across the globe.

Example: Both Unilever and the International Business Machines Corporation, leverage
their worldwide HR function as a source of competitive advantage.
Anglo-Dutch Unilever has long set a high priority on human resources. HR has a seat on the
board’s executive committee and an organisation that focuses on developing in-house talent
and hot-housing future leaders in all markets. The result is that 95 percent of Unilever’s top 300
managers are fully homegrown. Internationalisation is bred into its managers through job
content as well as overseas assignments. Since 1989, Unilever has redefined 75 percent of its
managerial posts as “international” and doubled its number of managers assigned abroad, its
expatriates, or “expats.”
The strategy demands global HR leadership with standard systems but local adaptation. The
key underlying ideas are to satisfy your company’s global human resources needs via feeder
mechanisms at regional, national and local levels, and to leverage your current assets to the
fullest extent by actively engaging people in developing their own careers.

Example: IBM, with 80 years’ experience in overseas markets, reversed its HR policy in
1995 to deal with the new global gestalt and a new business strategy. Instead of cutting jobs
abroad to reduce costs, IBM. is now focusing on its customers’ needs and increasing overseas
assignments. “We are a growing service business — our people are what our customers are
buying from us,” explained Eileen Major, director of international mobility at IBM.

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