Presentation on theme: "Randall S. Schuler, Peter J. Dowling and Helen De Cieri"— Presentation transcript:
1 Randall S. Schuler, Peter J. Dowling and Helen De Cieri Chapter 17 An Integrative Framework of Strategic International Human Resource ManagementRandall S. Schuler, Peter J. Dowlingand Helen De Cieri
2 IntroductionWhy the global playing field? Costs associated with new products are too great to be amortized only over one market.Need to manage globally (world as one vast market) and locally (world as a vast number of separate and loosely connected markets).MNE--any enterprise that carries out transactions in or between two sovereign entities, operating under a system of decision making that permits influence over resources and capabilities, where the transactions are subject to influence by factors exogenous to the home country environment of the enterprise.
3 Definition of SIHRMStrategic international human resource management-the linkage of international human resource management with the strategic needs of the businessReasons for the development of strategic international human resource management include the recognition:HRM at any level is important to strategy implementation;major strategic components of multinational enterprises have a major influence on international management issues, functions and policies and practices;many of these characteristics of SIHRM can influence the attainment of the concerns and goals of MNEsthere are a wide variety of factors that make the relationship between MNEs and SIHRM complex
4 Integrative Framework of SIHRM Figure 17.1 p. 322Strategic MNE componentsInterunit LinkagesHow these units are differentiated, integrated, controlled and co-ordinatedInternal Operations MNEs. Each unit has to:Work within the confines of its local environmentBe operated as effectively as possible relative to the competitive strategy of the MNE and the unit itself.
5 Integrative Framework of SIHRM SIHRM issuesMNE needs to determine:How to balance the needs for differentiation and for integrationHow much autonomy it can and needs to grant to local unitsHow much to control and how to co-ordinate those unitsHow much control it will exert over the internal operationsSIHRM functionsThree areas:MNE’s human resource orientationTime, energy and financial resources devoted to operating the human resource organization in the MNELocation of those resources and the human resource organization
6 Integrative Framework of SIHRM SIHRM policies and practicesMost relevant to the strategic needs of MNEs include those related to staffing, appraising, compensating and training and developing
7 Integrative Framework of SIHRM Exogenous factors includeindustry characteristicscountry/regional characteristicsIndustry characteristics includetype of business and technology availablenature of the competitorsextent of change
8 Integrative Framework of SIHRM The country/regional characteristics includepolitical conditionseconomic conditionslegal requirementssocio-cultural conditionsEndogenous factors includestructure of international operationsMNE’s headquarters international orientationcompetitive strategy being usedMNE’s experience in managing international operations
9 Integrative Framework of SIHRM Concerns and goalsGlobal competitivenessEfficiencyLocal responsiveness (sensitivity)FlexibilityOrganizational learning (transfer of information)
10 Interunit Linkages in SIHRM See Figure 17.2 p. 328Key objective in interunit linkages appears to be balancing the needs of variety (diversity), co-ordination and control for purposes of global competitiveness, flexibility and organizational learningMajor objectives in interunit linkages for SIHRM: Balancing the needs of autonomy, co-ordination and control for the purpose of global competitiveness, flexibility and learning through the use of the relevant SIHRM policies and practices.
11 SIHRM policies and practices Most directly associated with interunit linkages include:determining and maintaining staffing levels that are an appropriate mix and flow of parent-country nationals (PCNs)third-country nationals (TCNs) and host-country or local nationals (HCNs) and international assigneesdeveloping HR policies and practices that link units but also allow local adaptationusing management development to create shared visions and mindsets to cohere interunit linkages
12 Internal Operations in SIHRM See Figure 17.3 p. 322Major objective is: being responsive to and effective in the local environment, yet willing and ready to act in a co-ordinated fashion with the rest of the MNE units.
13 SIHRM policies and practices Matching and adapting HR practices with the competitive strategy of the unit and the local culture and legal systemCreating a modus operandi whereby these HR practices can be modified to fit changing conditionsCreating a set of SIHRM policies at the MNE level that can encompass and legitimate the HR practices of the local units
14 Exogenous FactorsIndustry characteristics include the following factors:type of business or industrynature of the competitorsextent of changeCountry/regional characteristics include:political environmenteconomic environmentlegal environmentsocio-cultural environment
15 Endogenous FactorsThere are four endogenous factors that are thought to have a significant influence on SIHRM issues and the associated HR functions and policies and practicesStructure of the international operationsInternational orientation of the MNEMNE’s competitive strategyMNE’s experience in managing international operations
16 Implications for academics and HR professionals Implies a need for multidisciplinary knowledgeA cross-disciplinary research effort may be most effective for a complete understanding of strategic international human resource managementUsing these multiple theoretical perspectives can enable the strategic international human resource management researcher to get a better understanding of the phenomenon to be examined enabling a better design to investigate testable and theoretically-based propositions
17 Implications for academics and HR professionals Success of global businesses depends first and foremost on the quality of the MNE’s human resources and how effectively the enterprise’s human resources are managed and developed.There appear to be too many contingencies, too many controllable factors and perhaps even too many unknown factors.