Page 63 - DMGT548_GLOBAL_HRM

Global HRM

Notes
Figure 3.9: Integrated Strategic Framework

Exogenous factors
- industrial characteristics
- country/regional
characteristics
Strategic MNC Strategic IHRM SIHRM functions MNC concerns
components issues and goals
 orientation
 inter-unit linkages Inter-unit linkages-  resources  competitiveness
control/variety  location
 internal operations s  efficiency
 local
SIHRM policies/
practices
s responsiveness
s
 flexibility
 staffing  learning and
 appraising
internal operations transfer
local sensitivity  compensation
strategic fit  developing
Endogenous factors
 structure of international operations
 headquarters’ international orientation
 competitive strategy
 experience in managing international
operations

Source: Schuler, Dowling and De Cieri’s (1993)
Some companies have large centralised human resource functions for selecting many
functions and repatriating expatriate staff, training and compensation. Others devolve many
functions to the subsidiaries either as well as this central function or instead of it. If general
guidelines are formulated by the centre that refer only to the need to develop a system for
rewarding individual performance, subsidiaries may then be free to develop their own incentive
schemes.
Functions and policies are aimed ultimately at meeting the concerns and goals of the multinational
organisation. These include global competitiveness, efficiency, local responsiveness, flexibility,
and organisational learning and transfer of information.
These concerns vary from company to company. By studying the various factors which
are pressing hard for international integration against those factors which point towards
local differentiation, it is possible to discuss an optimum instance for managing
people in subsidiary operations. This should be achievable by charting a course through these
two opposing forces and by drawing on the contributions that can be made from the parent and
the different subsidiaries. This requires consideration of the strategic factors that should be
addressed to provide the optimum balance between integration and differentiation, a
consideration of cultural differences that exist among the different national operations and the
relative contributions which can be made by people in the different national organisations to
the global operation.

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