discussion+ 2+ihrm+in+org.context

8/8/2019 Discussion+ 2+IHRM+in+Org.context

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MBA (Human Resource Management)

International Human Resource Management

Discussion 02: IHRM in Organizational Context

ByShahid Adil


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Contents

Introduction to organizationRole of HR in Organizations

Internationalization of Organizations

Types of Organizations

Modes of InternationalizationHR functions in International context

Issues in Control and coordination for HR in International

organizations

Exercise


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Organizational Structures in the Context

of

Internationalization

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Organizations

Organization is a body of persons brought together forsome work or for a particular end. It has its own purpose,interests, reputation, personality and values, each of whichdifferent from those of many individuals in it. It has more

power than individuals. Organizations have several supporting layers, individualsform small group, small groups aggregate to form largergroups or departments, departments aggregate to formdivisions and so on. Each layer has its own culture whichcombined to form organizational culture.


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Learning organization

A learning organization is skilled in creating,acquiring, interpreting, transferring, and retainingknowledge, and at purposefully modifying itsbehavior to reflect new knowledge and insights.

Individuals engaged in both single loop anddouble loop learning and transfer both tacit andexplicit knowledge.


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Stages of internationalization


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Stage 1: Domestic Operations

Firms offer products or services that are designed to

primarily serve consumers in the domestic market (e.g., law

firms)

Stage 2: Export Operations

Products and services are opened up to markets in other

countries, but production facilities remain in the country

(e.g., McCain Foods).

HRM: Provides sales force with skills and motivation to

succeed in these foreign markets.

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Stage 3: Subsidiaries or Joint Ventures

Some operational facilities (e.g., parts assembly) are

physically moved to other countries. Corporate headquarters in home country has high

control over foreign operations.

HRM: Provides expatriates and local employees withknowledge and skills to succeed in the foreign

country.

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Stage 4: Multinational Operations

Much more prevalent international dispersion ofproduction and service provision facilities.

Decentralization of decision-making more prevalent,but major personnel decisions still made withinhome country.

Expatriates still primarily manage foreign facilities.

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Stage 5: Transnational Operations

Little allegiance to the firms country of origin.

Large-scale decentralization of decision-making.

Dominant role of expatriates is removed.

Each business unit across the globe has the freedom

to make and implement its own HRM policies andpractices.

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Modes of internationalization

Modes of internationalization include:

Licensing A business arrangement in which the manufacturer of aproduct (or a firm with proprietary rights over certain technology,

trademarks, etc.) grants permission to some other group or individual tomanufacture that product (or make use of that proprietary material) inreturn for specified royalties or other payment. Often does not involve aheavy committment of human resources

Management Contracts Involve the transfer of experienced managerial

and technical staff to another organization for a fee and for a specifiedperiod of time. Management contracts usually involves training theorganizations employees


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Modes of internationalization cont

Alliances A collaboration between organizations underwhich their resources are pooled, exchanged or integrated formutual benefit. The committment of human resources dependson the level of inter-organizational interaction

Projects and Joint Ventures Potentially considerablechallenges on the human resource management function due tothe usually close and sustained inter-organizational interactionwhich is necessary for such collaborative ventures, and theconsequent varying management styles and philosophies,work ethics and cultures


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Types of International Organizations.

Bartlett and Ghoshal identify the following types of corporateorganizations:

Multinational Characterized by decentralization of many of the organizations

key assets, responsibilities and decisions. Management regards overseasoperations as a portfolio of independent businesses. For example,Siemens has many different lines of business around the world, but it isnot really consolidated into one whole, and each country of operation is

autonomous. Bayer, ADP and Levi also fit into this category


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Types of International Organizations.Cont.

Global It has a central hub where most of the strategic assets, resourcesand decisions are centralized. The management views overseasoperations as a pipeline to a global market place.

Treat the entire world as though it were one large country; may be theentire company or one or more of its product lines; may operate with amixture of two or more organizational structure simultaneously.

Examples include British Airlines, Deutsche Bank and NCR


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International - Sits midway between the decentralized andcentralized models. Many of the key assets, responsibilitiesand decisions are decentralized, but controlled fromheadquarters. Management regards overseas operations as

appendages to a central, domestic corporation. Transports itsbusiness outside home country; each of its operations is areplication of the company's domestic experience; structuredgeographically; and involves subsidiary general managers

Companies offering multiple products often find it

challenging to remain organized e.g. need to have acommon information systems for accounting, financial andmanagement controls, and marketing. Most evolve to

become multinational companies.

Johnson & Johnson fits this description16

Types of International Organizations.Cont.


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Factors that affect HRM Practices in the

International Arena

Country Culture

Political Policies and other Regulations

Economic Factors

Managerial, Educational and Technological Development inthe Host country

International experience of the organization

How the subsidiary is established

International staffing policy

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