ihrm group final !!!!!

ASIA PACIFIC INSTITUTE OF INFORMATION TECHNOLOGY

IN COLLABORATION WITH STAFFORDSHIRE UNIVERSITY UK

BA (Hons) in Business Administration

Group Assignment

Critical Evaluation of Transnational Form advocated by Bartlett and Ghoshal

Module Code & Title

BLB 10025-3 International Human Resource Management

Prepared By

GF 1131BA

Krishnagopi Thangavel CB003499Uma Ramiya Ratnam CB003434Ruchith Jayathilaka CB003427Vishwa Ranatunga CB002676

Date of Submission

06th June 2011

Instructor

Dr. Mahesha Samarathunga

Submitted in partial fulfillment for the

Degree of Bachelor of Arts (Hons) in Business Administration

Word Count: 1647 Words

http://apiit.edu.my/

International Human Resource Management BLB10025-3

1. Acknowledgement

The authors would like to take an opportunity to thank all those who helped to conduct

this study, therefore first the authors thank Dr. Mahesha Samarathunga for the guidance,

attention and the valuable time she spent with us throughout the completion of this

assignment.

Secondly the authors would like to thank all family members, friends and batch mates

who helped us in numerous ways in completing this assignment.

Finally the author would like to thank the institute, APIIT Lanka for providing me with

the necessary laboratory and library facilities in making this project.

The authors would also like to state that we are responsible for any errors made.

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2. Abstract

During 21st Century multinationals Corporations and globalization has become

interconnected due the ever increasing competition and expansion of businesses across

borders. (Pudelko & Harzing, 2007). Harzing and Ruysseveldt (2004) have stated that

growing globalization, divergence in consumer preference and expansion of

transportation gave birth to Multinational Corporations. In order to survive in the

aggressive globalize business environment, Multinational Corporations will have to

harmonize the opposing forces of global integration versus local responsiveness (Pudelko

& Harzing, 2007).

Since multinationals Corporations expanding their businesses across borders to various

countries with different characteristics, MNCs needs to adapt its key management areas

such as international Human Resources management (IHRM) to fulfill the organization

needs in host country or the region. IHRM is “the process of sourcing, allocating and

effectively utilizing human resources in a MNC” (Bhattacharyya, 2010). According to

Bartlett and Ghoshal, (1991 cited in Myloni, Harzing and Mirza, 2004) the HRM policies

and practices act as mechanisms for coordination and control of international operations

therefore become a crucial part in the transfer. Bartlett & Ghoshal (2000) identified that

to achieve a global competitive advantage for MNC’s, it is vital to have a key strategic

objectives. Tayeb (1998) and Liu (2004) have identified the internal and external factors

that impact on the transfer of HRM policies and practices across borders.

Hence according to Bartlett and Ghoshal (2000 cited in Harzing and Ruysseveldt, 2004)

has come forward with key organizational structures of Multi domestic, International,

Global and states three different strategic approaches, namely global approach,

multinational flexibility and worldwide learning compiled together makes the

transnational model.

The report mainly concentrates on the aims and objectives given in the following page.

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To understand the transnational model advocated by Bartlett and Ghoshal and to

discuss the other theoretical perspective of the transnational model.

To understand why transfer of employment practice across border is problematic

To critically evaluate and analyze the transnational model in relation to the chosen

MNC- The Coca Cola Company.

To identify whether the transnational model is the solution to manage across

border and to analyze whether MNCs should adopt the transnational model.

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3. Table of Content

1. Acknowledgement........................................................................................................ii

2. Abstract.......................................................................................................................iii

3. Table of Content...........................................................................................................v

4. List of Figure...............................................................................................................vi

5. List of Table...............................................................................................................vii

6. List of Abbreviation..................................................................................................viii

7. Introduction..................................................................................................................9

8. Section 01...................................................................................................................10

9. Section 02...................................................................................................................13

10. Section 03...............................................................................................................16

3.1. Strategy and structure in Multinational Company (MNC).....................................16

3.2. Limitations of Multidomestic, global and international model...............................19

3.2.1. Multidomestic model........................................................................................19

3.2.2. Global model....................................................................................................20

3.2.3. International model...........................................................................................21

3.2.4. Transnational model.........................................................................................23

3.3. Transnational model in relation to the CCC...........................................................25

3.3.1. Positive outcome from transnational model in relation to the CCC.................26

3.3.2. How the CCC achieve the strategic objectives................................................27

3.4. Draw backs in transnational....................................................................................28

3.5. Successful MNC which adopt the transnational model..........................................29

11. Recommendation....................................................................................................30

12. Conclusion..............................................................................................................31

13. Appendix.................................................................................................................32

14. References...............................................................................................................35

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4. List of Figure

Figure 1 Strategic Objectives...........................................................................................16Figure 2 MNC Organizational Model..............................................................................17Figure 3 Disadvantage of Multidomestic.........................................................................19Figure 4 disadvantage of Global model...........................................................................20Figure 5 Disadvantage of international model.................................................................21Figure 6 Dilemma............................................................................................................22Figure 7 MNC strategy and structure...............................................................................23Figure 8 Characteristic of transnational model.................................................................24Figure 9 integrated model of the CCC.............................................................................25Figure 10 successful MNCs.............................................................................................29Figure 11 Different between home and host country.......................................................32Figure 12 Industry level factor.........................................................................................34

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5. List of Table

Table 1Justification of critical factors...............................................................................14Table 2 Characteristic of MNC model...............................................................................18Table 3Performance of the CCC........................................................................................26Table 4 CCC's performance...............................................................................................27

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6. List of Abbreviation

HRM – Human Resource Management

The CCC – The Coca Cola Company

MNC – Multinational Company

HQ- Head Quarters

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7. Introduction

The transfer of employment practices across borders is problematic and complex.

(Bartlett and Ghoshal, 1998). MNCs need to meet the challenge of achieving the three

objectives; Multinational Flexibility, Global Efficiency and World-wide learning

simultaneously. It is important to achieve all three pressures to survive in the competitive

environment (Bartlett & Ghoshal, 2000 cited in Harzing & Ruysseveldt, 2004: p36).

Therefore, it was argued by Bartlett and Ghoshal, that the transnational model is the

solution for managing across borders. (Bartlett and Ghoshal, 1998). Thus, the report is

providing a broad analysis of transnational model and will critically evaluate whether it

would be best for most MNC to follow the transnational model. The aims and objectives

of the report are follows,

1. To understand the transnational model advocated by Bartlett and Ghoshal and to

discuss the other theoretical perspective of the transnational model.

2. To understand why transfer of employment practice across border is problematic

3. To critically evaluate and analyze the transnational model in relation to the chosen

MNC- The Coca Cola Company.

4. To identify whether the transnational model is the solution to manage across

border and to analyze whether MNCs should adopt the transnational model.

To accomplish the above aims and objectives, information gathered from secondary data

such as, corporate website, online search, text books and journal articles to conduct a

comprehensive analysis. This report is categorized into three sections and each section

deals with the aims. The structure of the report is as follows,

Section 1 deals with aim 1

Section 2 deals with aim 2

Section 3 deals with aim 3 & 4

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Finally the report ended with recommendation and an in-depth conclusion of the whole

report.

8. Section 01

To understand the transnational model advocated by Bartlett and Ghoshal and to

discuss the other theoretical perspective of the transnational model - Theoretical

Framework

According to Bartlet and ghoshal (1986 cited in Edwards and Rees, 2004:p40) Transfer

of practices across borders is problematic. Multinational Companies constantly try to

transfer their human resources practices to their subsidiaries. Due to cultural and

institutional factors of the home and host countries, the transferring process becomes

more difficult. Multiculturalism makes managing across borders more challenging and

problematic (Harzing and Ruysseveldt, 2004:p90; Myloni, Harzing & Mirza, 2004). Most

of the Multinational Companies face the dilemma whether to be locally responsive or to

be globally integrated in the host country (Rosenzweig and Nohria, 1994 cited in Myloni,

Harzing & Mirza, 2004:p519; Jain et al. 1998). MNCs find it difficult to achieve all three

pressures - global efficiency, multinational flexibility and worldwide learning

simultaneously. In order to achieve the strategic objectives, organizations need to meet

these three pressures simultaneously (Bartlett and Ghoshal , 2000 cited in Harzing and

Ruysseveldt, 2004:p36).

National Level, Company Level and HRM Practice Level are the factors influencing the

cross national transferability of HRM practices (Liu, 2004:p501). Company and Industry

Level Factors, cultural and institutional factors of the home and host countries and the

nature of individual HRM practices may constrain the HRM transfer (Myloni, Harzing &

Mirza, 2004:p522).

It can be argued that, the cultural and institutional environment becomes even more

crucial for HRM transfer to host countries that are in a transitional state (Clark et al 1999

cited in Myloni, Harzing & Mirza, 2004:p520). Cultural and institutional factors of the

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home country differ from cultural and institutional factors of the host country (Myloni,

Harzing & Mirza, 2004). Therefore, transfer of HR policies and practices to different

countries can be quite problematic (Bae et al., 1998; Hofstede, 1980; Kovach, 1994;

Rosenweig and Nohria, 1994; Yuen and Kee, 1993 cited in Myloni, Harzing & Mirza,

2004:p520). Certain HRM practices are more localized and affected by the host country’s

cultural and institutional environment, while other practices are more globalised and

affected by the home country’s cultural and institutional environment (Myloni, Harzing

& Mirza, 2004:p529). Therefore HR practices and organizations cannot be isolated from

their particular cultural environment (Laurent, 1991 cited in Khilji, 2002:p232). Lesser

the cultural and institutional distance, it is easier to transfer HR practices to host countries

which results in convergence, ethnocentrism and forward diffusion. Industry Level

factors which affect the HRM transferability are identified as follows.

Multinational companies can operate in segmented industry or in standardized industry

which are identified as Industry Level Factors. Muller (1994, cited in Elkassrawy, 2006:

p3) as stated that for segmented industries it is difficult to transfer HR practices form

home country to host country. For instance, the FMCG industry is segmented, whereas in

standardization, it is easy to transfer the HRM practices. An example for a standardized

industry is electronics industry. Nature of Individual HRM practices also affects the

HRM transferability from home country to host (Kostova, 1999 cited in Liu, 2004:p505).

Some HR practices are deeply culture rooted which results in difficult transfer while the

less culture rooted practices are easily transferable. The Company Level factors affecting

the HRM transfer are discussed below.

According to Li and Liu (2002 cited in Liu 2004:p501) “Theoretical approaches to

analyze transferability at company level exist in two main categories: organizational

cultural compatibility and resource dependency”. Cultural compatibility between the

parent company and the subsidiary is recognized as an important factor to influence the

transfer of management practices (Kostova, 1999; Taylor et al., 1996 cited in Liu,

2002:p503). An organization is unable to generate all of the resources which it needs to

operate its business therefore dependent on other actors. Researchers have argued that

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because subsidiaries rely on their parent company for resources, they are dependent to

varying degrees on the parent company (Aldrich, 1976; Pfeffer and Salancik, 1978 cited

in Liu, 2002:p503).

Under company level factors, Bartlet and Ghoshal discussed four organizational

structures namely Multi-domestic, Global, International and Transnational models to

achieve those three pressures at varying degrees at different structures (Harzing and

Ruysseveldt, 2004). Bartlet and Ghoshal argued that, the Transnational from as a solution

for manage all three pressures simultaneously (Edwards and Rees, 2006:p93). Also they

see transnational form as necessary for all organizations operating in global environments

(Bartleet and Ghoshal, 1998:p20 cited in Edwards and Rees, 2006. P: 94).

The next section will discuss the reasons due to which Bartleet and Ghoshal identified the

Transnational Form as a solution to managing across borders and the reasons due to

which it would be best for most companies.

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9. Section 02

To understand why transfer of employment practice across border is

problematic

According to Schuler & Rogovsky (1998, cited in Harzing, 2004) it has been argued that

human assets are an emerging source of competitive advantage for MNCs. Bartlett &

Ghoshal (1991, cited in Harzing, 2004) have argued that HRM policies and practices are

becoming crucial because they can act as mechanisms for co-ordination and control of

international operations. Values and HR systems help to shape organizational culture and

the people who operate within and also influence that culture; and MNCs therefore

attempt to transfer their HRM practices abroad. (Adler and Bartholomew, 1992, cited in

Harzing, 2004).

According to Harzing et al, (2004) the critical factors that need to be taken in to account

when MNCs engage in the transfer of HRM practices across border are as follows.

Company level factors

Cultural factors between home and host country (Refer appendix 1 & 2)

Institutional factors between home and host country

Industry level factors (Refer appendix 3)

Nature of the individual HRM practice transferred.

HRM practices, like most management practices, are based on cultural beliefs that reflect

the fundamental values and assumptions of the national culture in which the organization

is embedded (Harzing and Ruysseveldt, 2004). National differences are major factors that

complicate the process of HRM transfer to subsidiaries. Differences in the economic

development phase, disparities in national culture and institutions can be problematic

issues, while characteristics of business systems and HRM practice can either facilitate

the absorption of best practice (Zhang, 2003 cited in critical analysis, 2011). As shown on

the following page (Table 1), the critical factors are briefly explained.

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Critical factors Why transfer is problematic?

Company level

factors

The transfer will be problematic due to the strategy and

structure of MNCs, resource dependency and MNC’s

culture.

(Harzing et al, 2004)

Cultural factors

The transfer will be problematic when the cultural

difference between home and host country is high.

The HRM practices influence by the home country

culture, norms and values. Also when the MNC’s willing

to transfer the HRM practices, it will be reject or block

by the subsidiaries.


Institutional factors

The transfer will be problematic due to political and

educational institutions of the country and legal

framework of the home and host country.


Industry level

factors

The transfer will be problematic due to characteristics

and the nature of the industry in which the MNC’s

originate.


Nature of the

individual HRM

practice

transferred.

The transfer will be problematic due to some HRM

practices (such as recruitment and selection) which are

influenced by the home country cultural and institutional

factors.

If the necessary background is not in the host country,

the HRM practices will be appose by the subsidiary.


Table 1Justification of critical factors

Source: Authors work

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When the home country transfer the HRM practices to various host countries, there are

some options to host countries whether,

To accept HRM practices directly from home country

To ignore home country HRM practices and to adopt local practices developed by

host country.

To accept partly from home country practices and rest from local/ host country

practices

To adopt local practices partly and rest from home country but before implication

the HRM practices will be adjusted according to host country cultural and

institutional factors.

The next section will critically analyze the transnational model with relevant scenarios.

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10. Section 03

To critically evaluate and analyze the transnational model in relation to

the chosen MNC- The Coca Cola Company.

3.1. Strategy and structure in Multinational Company (MNC)

Transfer of HRM practices is problematic due to handing the three pressures as shown in

figure 1 and which leads MNC to the dilemma of Local Responsiveness and Global

Integration (Bartlett & Ghoshal, 2000 cited in Harzing, 2004: p36).

Figure 1 Strategic Objectives

Source: Author’s work according to Bartlett & Ghoshal (2000 cited in Harzing, 2004).

Bartlett and Ghoshal (1998 cited in Edward & Reese, 2006: p91) identified 4 types of

organizational models to achieve the above pressures as show in figure 2. The MNC’s

need to achieve all three pressures simultaneously in order to survive in the competitive

environment.

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Strategic Objectives

Global Efficiency Multinational

FlexibilityWorldwide Learning


Figure 2 MNC Organizational Model

Source: Author’s work according to Bartlett & Ghoshal (1998 cited in Edward & Reese, 2006)

The characteristics of organization models are given below in the table 2.

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Multi-domestic organizational model

International organizational model

Global organizational model

Transnational organizational model


Multidomestic model

McDonalds

Global model

Apple Company

International model

Microsoft Company

Network structure

Dilemmas Locally responsive Globally integrated Globally integrated

Strategic objective Multi flexibility Global efficiency Worldwide learning

Structure Decentralized federation Centralized hub Coordinated federation

Application of Perlmutter’s Theory

Polycentric strategy Geocentric strategyCombination of polycentric and

ethnocentric structure

Convergence/Divergence/ cross vergence

Divergence Convergence Convergence and divergence

Table 2 Characteristic of MNC model

Source: Author’s work

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3.2. Limitations of Multidomestic, global and international model

3.2.1. Multidomestic model

McDonald is considered as a multidomestic company because they adjust to the cultures

of their host countries. The figure 4explains the disadvantage of adopting the multi

domestic model to McDonald’s. (Corporate website, 2011)

Figure 3 Disadvantage of Multidomestic


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It only achieves multinational flexibility. So it reduces the possibility of improving competitive advantages.


It has less awareness for and faces greater difficulty in transferring HR practices and knowledge across countries

Transfer HR practices

It leads to an elimination of originality of the activity or a product and reduce the economies of scale.

Locally responsive


3.2.2. Global model

Apple Inc adopted global model because it produces and supplies standardized product

worldwide. The figure 5 explains the disadvantage of adopting the global model to Apple

Inc. (Corporate website, 2011)

Figure 4 disadvantage of Global model


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It only achieves the global efficiency. So it creates a thread to the company in the competitive environment.

Strategic Objective

All key decisions are made at home country (HQ) and transfered to subsidiaries. Due to host country cultural and institutional factors, tranfer will get rejected

Transfer HR practices

It is only concern about the international intergration and its ignores the local responsive ness.

Global Integration


3.2.3. International model

Yahoo Inc is adopted the international model and it transfers all HR practices from head

quarters where it develops the core architecture. The figure 6 explains the disadvantage of

adopting the international model to Yahoo Inc. (Corporate website, 2011)

Figure 5 Disadvantage of international model


After the evaluation of above MNC models, it is clearly identified that the above models

do not successfully achieve the three pressures (refer figure 1) simultaneously. Therefore

in order to obtain the strategic objectives the transnational model has to be applied.

Shown on the following page is the dilemma of local responsiveness versus global

integration of the organizational model.

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It only achieve worldwide learning . So it reduces the possibility of improving competitive advantages.


Lack of local responsiveness and inability to realize location economies. Also failure to exploit experience curve effects

Globally integreated

Globally Integrate

Locally R

esponsive

High

HighLow

TransnationalGlobal

Multidomestic

Multidomestic


Figure 6 Dilemma

Source: Author’s work according to Bartlett & Ghoshal (2000 cited in Harzing, 2004)

An organization that uses both global integration and local responsiveness is said to be

using the transnational model, which is further explained in the following page.

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Transnational

Multinational Flexibility Worldwide LearningGlobal Efficiency

InternationalMultidomesticGlobal

The Coca Cola Company


3.2.4. Transnational model

According to Bartlett & Ghoshal, 2000 cited in Edward & Rees (2006: p94) the

transnational model is offering the solution to competing the pressures by obtain all three

pressures simultaneously. Thus, according to Bartlett Ghoshal (1998 cited in Edwards &

Rees, 2006) the Coca-Cola Company pursues a ‘transnational organizational model’.

(Refer figure 8)

Figure 7 MNC strategy and structure


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Characteristics of transnational model

Figure 8 Characteristic of transnational model

Source: Author’s work according to Bartlett & Ghoshal (2000 cited in Harzing, 2004)

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Transnational Model

Integrated network

Acheive 3 strategic objectives

simultaniously

Locally responsive and globally

intergrate

Regeocentric approachPresence of centers

of exellence Allows forward

diffusion and reverse diffusion

Cross vergence

The Coca Cola CompanyAtlanta

uni

The Coca Cola CompanyEurasia

The Coca Cola CompanyPacific

uni

The Coca Cola CompanyEurope

uni

The Coca Cola CompanyLatin America

uni

The Coca Cola CompanyNorth America

uni

The Coca Cola CompanyAfrica

uni


3.3. Transnational model in relation to the CCC

According to the corporate website (2011) the Coca Cola Company is a global business

that operates on local scale in every community where they do business. Coca-Cola

Company is one of the most successful transnationalized MNCs, headquartered (HQ) in

Atlanta, USA and it is the world’s leading and the largest manufacturer and distributor

which operates in 206 countries, markets more than 500 brands, 3500 beverage products

and 300 bottling partners, and sells 1.7 billion servings a day. (Corporate website, 2011).

Figure 9 integrated model of the CCC

Source: Authors work (2011)

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3.3.1. Positive outcome from transnational model in relation to the CCC

Characteristics Performance of the CCC

Integrated network

Due to this integrated network the CCC can have forward

diffusion as well as reverse diffusion

(Bartlett & Ghoshal (2000 cited in Harzing, 2004)

strategic objectives

The CCC achieves three pressures through transnational model

in order to gain competitive advantage to survive in the

competitive environment.


Locally responsive

and globally integrate

Employees and resources move freely and act locally where the

structure of a MNC is neither locally responsive nor globally

integrated.


Regiocentric approach

CCC enables its subsidiaries to make their own decisions

regarding recruitment & selection and wages which describe

their decentralized and Regiocentric structure.


Presence of centers of

excellence

The company becomes a kind of network with different centers

for different activities and each center can have a strategic role

of particular area.


Crossvergence

Through this the CCC share knowledge and transfer best

practices to and from subsidiaries worldwide.


Table 3Performance of the CCC


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3.3.2. How the CCC achieve the strategic objectives

Strategic objectives The CCC’s performance

Global efficiency

CCC is the trend towards greater integration of

global tastes.

The product trends , as is the demand for the same

consumer product by CCC around the world

(Jackson, 2002)

Multinational flexibility

All subsidiaries are decentralized and independent

Allows subsidiaries to work as local companies.

It implements product variety widely according to

the host country market (customer needs and

interest)

(Jackson, 2002)

Worldwide learning

Worldwide sharing of best practices with

subsidiaries.

Respond to the rapidly changes of the market

through new products and technologies.

(Jackson, 2002)

Table 4 CCC's performance

Source: Author’s work (2011)

With the analysis given above on CCC, it can be said that CCC utilizes the transnational

model to its utmost potential.

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To Access whether transnational model is a solution for managing across borders.

With the explanation given on the page before on CCC, it can be said that the

transnational model is the best solution in managing across borders. However there are

some issues that exist within this model, this is explained below.

3.4. Draw backs in transnational

Even though Bartlett and Ghoshal argued that transnational model is a solution for

managing across borders, still there are some drawbacks which question the success of

this model. Most MNCs known as transnational organizations are not 100 % successful.

Their operations are not worldwide and operation is limited to regional basis (Rugman

and Verbeke ,1993). According to Ghoshal & Nohria (1989 cited in London & Hart,

2004:p5) “Researchers, using data from MNC practices, have explored which country-

level strategy is the best fit for a subsidiary”. With organizational politics taking place in

transnational organizations, situations occur where subsidiaries are not willing to work or

align with the HQ’s decision. (Edwards & Rees, 2006). According to London and Hart

(2004) “transnational model of national responsiveness, global efficiency and worldwide

learning may not be sufficient in emerging markets in the developing world”. They also

stated that Western-style patterns of economic development may not occur in these

business environments.

Even thought transnational firms have some limitation, it would be the best solution when

compare to the other organizational models. (Refer figure). According to E- notes,

(2011) transnational strategy allows for the attainment of benefits inherent in both global

and multidomestic strategies. The subsidiaries are integrated into the overall corporate

structure across several dimensions, and each of the subsidiaries is empowered to become

centers of excellence. It is a management approach in which an organization integrates its

global business activities through close cooperation and interdependence among its HQ,

operations, and international subsidiaries, and its use of appropriate global information

technologies (Zwass, 1998 cited in e-notes, 2011).

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3.5. Successful MNC which adopt the transnational model

Following are the successful transnational organization worldwide. (Refer table 6)

Figure 10 successful MNCs

Source: Rugman and Verbeke, 1993

According to foundation (2011) with over 53% of the world's largest economies today

being Trans-national Corporations (TNCs) their impact and responsibilities are global

and it is crucial in order to gain a competitive advantage over other MNC’s.

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11. Recommendation

According to the above analysis and critical evaluation, it is evident that other

organizational models namely global, international and Multidomestic models do not

achieve the strategic objectives successfully. Transnational model is the only way for

companies to achieve all three pressures simultaneously. So in favor of Bartlett and

Ghoshal, it is recommended to adopt transnational model as a solution to managing

across border for MNCs and it should be adopt by the MNCs in order to achieve global

competitive advantages while managing the dilemma of locally responsive and globally

integrate.

Transnational firms have higher degrees of coordination with low control dispersed

throughout the organization and under the transnational model; a MNC’s assets and

capabilities are dispersed according to the most beneficial location for a specific activity.

Simultaneously, transfer across border is interdependent, and knowledge is developed

jointly and shared worldwide.

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12. Conclusion

The objectives of this report was to critically discuss and evaluate the transnational form

which advocated by Bartlett and Ghoshal as a solution to managing across border. The

report of the three sections is well analyzed and provided with a clear and critical

recommendation on whether the transnational model is a solution to managing across

border and it would be best for most MNCs to follow the transnational model.

The report identifies the section one to understand the transnational model advocated by

Bartlett and Ghoshal and to discuss the other theoretical perspective of the transnational

model.

The second section identifies the critical factors that influence the transfer across border

and it explains why transfer across border is problematic.

The third section distinguishes the four types of MNC’s organizational model and it is

founded the success story of the transnational model in relation to the CCC. Finally the

section argues in favor of transnational model as it is the solution to managing across

border.

So therefore recommendations are provided in the end of the report as the transnational is

the solution to managing across border and MNCs should adopt this model in order to

survive in the competitive environment.

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13. Appendix

Appendix 1

Distance between Home and Host country factors.

Figure 11 Different between home and host country

(Source: Authors’ work, 2011)

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Appendix 2

Cultural and institutional factors- how it affects transfer of chosen MNC

Cultural Factors

Compared to other Asian countries the cultural factors between Sri Lanka and US are

relatively low. According to Chandrakumara and Sparrow, (2003) and Nanayakkara

(1993) it is highlighted that Sri Lanka been a colony under many western nations, it has a

major control on the life style of the Sri Lankans. Also the management practices adopted

by westerners are still extensively employed in Sri Lanka.

In addition to that Sri Lanka is following a westernized education system where most

students are doing their studies in international languages and in foreign universities. Sri

Lankans tend to work in foreign countries and this gives MNC to have experience,

innovative and flexible work force to work with, this was discussed by Myloni et al

(2004)

Language gap between Sri Lanka (Sinhala, Tamil) and USA (English, French,

Spanish) has a greater effect on certain decision making.

Tayeb, (1998) considered Language as an important factor when entities or MNC

transfer its existing practice and policies to subsidiaries.

According to theories by scholars the cultural distance between SL and USA is high, but

the foreign influence in Sri Lanka during Last Five centuries has enable to mitigate

certain barriers in transferring foreign firm’s practices and policies to Sri Lanka. Since

CCC’s global strategy is to localize its global practices in the Host country, “Think

globally acts globally “CCC (2010) allows to minimize the distance between host country

and home country through utilization of better practices such as transnational model.

Appendix 333 | P a g e


Industry Level Factors

Analysis of the segmented and standardized has an effect on transferring Practices & policies from home country.

Figure 12 Industry level factor

Source: Compiled by Authors (2011); Rugman and Verbeke (1993); Bartlett and Ghoshal (1998)

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Industry level factors

Easy to transfer-Electronics

Ex: LG, Cannon, Sony

StandardizedSegmented industries

Difficult to transfer-Fast food

Ex: McDonalds, Pizza hut, star bucks.

Easy to transfer –Motor vehicles

Ex: Toyota, BMW, Jaguar

Pharmaceutical

Ex: Johnson & Johnson, GlaxoSmithKline, Roche

Difficult to transfer- FMCG

Ex: P& G, Uniliver

Food industry

Ex: Cadbury, Nestle, Kraft,

http://en.wikipedia.org/wiki/GlaxoSmithKline


14. References

Bartlett, A.C, and Goshal, C. (1998) Managing across borders: The transnational solution, 2nd edition, Boston: Harvard Business School Press.

Chandrakumara, A. and Sparrow, P. (2004), “Work orientation as an element of national culture and its impact on HRM policy-practice design choices: lessons from Sri Lanka”,

Critical analysis, (2011) Globalization and HRM, [Online], available at: http://www.criticalanalysis.net.au/content/Globalisation-and-HRM.pdf [Accessed on 03rd June 2011]

Edward, T. & Rees, C. 2006. International Human Resource Management. India, Pearson Education.

Edwards, T., and Rees, C. (2006) International Human Resource Management, 3rd edition, India: Dorling Kindersley

E-notes, (2011) transnational organization, [Online], available at: http://www.enotes.com/management-encyclopedia/transnational-organization [Accessed on 28th June 2011]

Foundation for GAIA, (2011) transnational corporation, [Online], available at: http://www.foundation-for gaia.org/index.ph?option=com_content&view=article&id=59&Itemi [Accessed on 05th June 2011]

Harzing, A.W. & Ruysseveldt, J.V. 2004. International Human Resource Management.2nd Ed, London, SAGE Publication Ltd

Harzing, A.W., and Ruysseveldt, J.V. (2004) International Human Resource Management, 2nd edition, London: SAGE Publication Ltd

Jackson, T., (2002) International HRM; a cross culture approach, Delhi: SAGE publication.

Khilji, S.E., (1999). “Modes of convergence and divergence: an integrative view of multinational practices in Pakistan”, International Journal of Human Resource Management, vol. 13, no. 2, pp. 232–253.

Liu, W. (2004). “The cross-national transfer of HRM practices in MNCs: An integrative research model”, International Journal of Manpower, vol. 25, no. 6, pp. 500-517.

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http://www.enotes.com/management-encyclopedia/transnational-organization

http://www.criticalanalysis.net.au/content/Globalisation-and-HRM.pdf


Myloni, B., Harzing, A. W. & Mirza, H. (2004). “Host Country Specific Factors and the Transfer of Human resource Management Practices in Multi National Companies”, International Journal of Manpower, vol. 25, no. 6, pp. 518-534.

Pudelko, M. & Harzing, A.-W., (2008), 'The Golden Triangle for MNCs: Standardization towards Headquarters Practices, Standardization towards Global Best Practices and Localization, International Human Resource Journal, Vol. 1, pp. 01-19

Rugman, A., and Verbeke, A. (2004) Regional transnational and Triad strategy, United Nations, New York and Geneva.Tayeb M. H. 2005, International Human Resource Management, Oxford University Press, New York

Tayeb, M., (1998), Transfer of HRM practices across cultures: An American company in Scotland, The International Journal of Human Resource Management, Vol 9, No. 2, pp. 332-358

The Coca Cola Company, (2010) Our company, [Online], available at: http://www.thecoca-colacompany.com/ourcompany/index.html [Accessed on 01st June 2011]

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http://www.thecoca-colacompany.com/ourcompany/index.html


Work Load Matrix

TasksRuchith

(CB003427)Vishwa

(CB002676)Uma

(CB003434)Krish

(CB003499)

Abstract

Introduction

Chapter 1

Chapter 2

Chapter 3

Conclusion

References

Appendix

Signature

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ihrm group final !!!!!

Documents

human resource

industry level

coca cola

individual

transnational

competitive

worldwide

management