Page 55 - DMGT548_GLOBAL_HRM

Global HRM

Notes In this structure, there are pressures from horizontal matrix managers for equal allocation of
resources and the vertical managers are supposed to balance this by taking into account the
relative importance of products or projects based on organisational priorities and other long-
term considerations.

Disadvantages of Matrix Structure

1. As the design complexity increases, coordinating the personnel and getting everyone to
work towards a common goals often becomes difficult.
2. Some employees experience dual authority, which is frustrating and confusing. So, managers
need excellent interpersonal and conflict-resolution skills.

Notes New Types of Multinational Structures
Mergers, takeovers, joint ventures strategic alliances give way to newer variations in
organisational structure design and these can be of four types:
1. Hierarchy: It is a structure that recognises a multinational have a number of different
kinds of centres apart from headquarter. Each subsidiary centre may be
simultaneously a centre and a global coordinator of discrete activities, thus
performing a strategic role for itself and for MNC as a whole. Control is less realist
on the top-bottom mechanisms of previous hierarchical modes and more reliant on
normative mechanisms. HRM rests solely on the ability of the multinational to
formulate, implement, and reinforce the required human resource elements. It
demands skilful and experienced personnel as well as sophisticated reward and
punishment systems in order to develop the normative control mechanisms necessary
for effective performance.
2. Transnational: It is a structure that describes a new organisational form which is
characterised by an interdependence of resources and responsibilities across all
business units regardless of national boundaries. It tries to cope with the large flows
of components, products, resources, people, and information among its subsidiaries
and simultaneously recognises the distributed specialised resources and capabilities.
It demands a complex process of coordination and cooperation involving strong
cross-unit integrating devices, a strong corporate identity, and a well-developed
worldwide management perspective. Staff transfers play a critical role in integration
and coordination.
3. Networked Firm: The management of a multi-centred networked organisation is
complex. Apart from the intra-organisational network (comprising of headquarters
and the numerous subsidiaries), each subsidiary also has a range of external
relationships (involving local suppliers, customers, competitors, host governments,
and alliance partners). The management of both the intra-organisational and inter-
organisational spheres, and of the total integrated network, is crucial to global
corporate performance. It involves a less-hierarchical structure, featuring five
dimensions: delegation of decision-making authority to appropriate units and levels;
geographical dispersal of key functions across units in different countries; de-layering
of organisational levels; de-bureaucratisation of formal procedures; and
differentiation of work, responsibility, and authority across the networked
subsidiaries.
Contd...

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