Impact of Emerging Markets on Global Staffing

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Journal of International Management
5 (1999) 167–186

The impact of emerging markets on staffing the
global organization:
A knowledge-based view
Michael G. Harvey a,*,1, Cheri Speier b,1, Milorad M. Novicevic a,1 a

Michael F. Price College of Business, University of Oklahoma, 307 West Brooks, Norman, OK 73019-4006, USA
b
Management Information Systems, The Eli Broad Graduate School of Management, Michigan State University, East Lansing, MI 48824, USA

Abstract
As organizations become more global in their strategic orientation, the need for developing global managers becomes imperative. One of the distinguishing features of global organizations is to effectively manage global operations in a consistent manner but at the same time allow flexibility at the country level to effectively compete. Acquisition and sharing of tacit social knowledge necessary to work globally but with a contextual understanding of local markets require a unique set of management skills. The process of inpatriating host and third country nationals into the home country organization appears to hold significant potential in developing a pool of future global managers. This article presents a theoretical perspective to analyze the contextual factors influencing the staffing choice when to utilize expatriate and inpatriate managers in global organizations. © 1999 Elsevier Science Inc. All rights reserved.

Keywords: Global; Staffing; Knowledge-based; Expatriation; Inpatriation

1. Introduction
Many experts thought that globalization was “approaching” the status of a strategic norm in the early 1990s, more recent evidence suggests that it is a strategic necessity in today’s business environment. Almost a decade later, there is a strong belief that markets and compe* Corresponding author: Tel: 1-405-325-3376; fax: 1-405-325-7688. E-mail address: mharvey@ou.edu (M.G. Harvey)

1
Michael G. Harvey is a Puterbaugh Chair of American Free Enterprise. Milorad M. Novicevic is a PhD student at the Michael F. Price College of Business, University of Oklahoma. Cheri Speier is an Assistant Professor at the Eli Broad Graduate School of Management, Michigan State University. 1075-4253/99 $–see front matter © 1999 Elsevier Science Inc. All rights reserved. PII: S1075-4253(99)00011-3

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M.G. Harvey et al. / Journal of International Management 5 (1999) 167–186

tition are viewed within an increasingly global context and that in the future much of this context will coexist in developing and emerging economies (Minehan, 1998). This increasing business globalization will necessitate significant adaptation of human resource processes and people, identifying those who can facilitate organizational adoption of global strategies while simultaneously responding to local markets/competition. The more geocentric the organizational strategic orientation, the more likely the need for a mixture of home, host, and third country nationals to compete successfully in a hypercompetitive global marketplace (Edström and Galbraith, 1994). Therefore, organizations must develop globally competent managers and protect them as core competencies, which allow the company to compete effectively in the global competitive arena (Minehan, 1998). There is a growing consensus that organizations that compete globally will be dependent on the architecture of their human resources to differentiate their efforts against global and local competitors. The organization’s global Human Resource Management (HRM) architecture, reflecting the quantity and quality of global managers, may be one of the most critical resources of an organization’s capability to compete globally (Bartlett and Ghoshal, 1994, 1995; Pfeffer, 1994; Ghoshal and Bartlett, 1997). Therefore, developing an adequate supply of “transnational” managers, who can effectively manage across national and subsidiary boundaries, becomes paramount to global organizations (Gregersen et al., 1998). These sophisticated global...
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