11.1 The strategic role of international HRM
In Chapter 7 we discussed strategy; Chapter 9 dealt with structure and one of that topic's sub-topics was control systems. These three components - strategy, structure and control systems - were brought together in Table 13.2 from page 468 of your textbook (Hill, 2005). We begin this chapter by again reproducing that table as Table 11.1.
Table 11.1 Strategy, structure and control systems (Source: Hill 2005, p. 468)
|
International strategy | |||
Structure and controls |
Multidomestic |
International |
Global |
Transnational |
Vertical differentiation |
Decentralised |
Core competency centralised, the rest decentralised |
Some centralised |
Mixed centralised and decentralised |
Horizontal differentiation |
Worldwide area structure |
Worldwide product division |
Worldwide product division |
Informal mix |
Need for coordination |
Low |
Moderate |
High |
Very high |
Integrating mechanisms |
None |
Few |
Many |
Very many |
Performance ambiguity |
Low |
Moderate |
High |
Very high |
Need for cultural controls |
Low |
Moderate |
High |
Very high |
A successful international company needs an appropriate structure and controls to put its strategy into effect. Since their introduction in Chapter 7 we have referred frequently to the four international strategies - multidomestic, international, global and transnational. Take another look at Table 11.1 to remind yourself of six aspects of control which vary accordingly to the strategy chosen.
The word congruent is used to indicate the degree of matching of strategy, structure and controls. So, the aim of the HRM policies of a firm is to match people with the firm's strategy, structure and controls. We may find, for example, that the CEO and staff required to effectively manage a multi-domestic company are quite different from the team required to effectively manage a transnational company. In the following sections we will discuss the role of various HRM activities in matching people to strategy, structure and control systems.
The management process is often described as consisting of planning, organising, staffing, directing (or leading) and controlling. In the context of HRM, our concern is with staffing and that is the focus of the next section.
Turn now to Hill (2005) for an introduction to IHRM and the reading by Rance (2003) for discussion on current IHRM issues. Note how the reading comments that in some cases IHRM is changing from managing expatriates on three-year assignments to managing shorter overseas duties that are 'an add-on to their domestic work' (Rance 2003, p. 36). With this in mind, also work through the article by Cherrington (2004) that highlights the necessity of having good travel management policies and/or substituting travel with technology.
In your text
Hill 2005, Chapter 18, pp. 617-620.
Reading 11.1
Rance, C. 2003, 'Managing a global workforce', HRMonthly , August, pp. 34-36.
Reading 11.2
Cherrington, J. 2004, 'Business travel: Make it work for you', Management Today , July, pp. 40-43.
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