Assignment 1: HRM in an MNE
Nicole Boehm (Coveley)
Global Human Resource Management (Bus 325)
Professor Sandy Hughes
July 24, 2014
1. Compare and contrast two (2) main differences between domestic and international HRM. Human resource management refers to all activities undertaken by an organization to effectively utilize human resources. The activities included for HRM is planning, performance management, staffing, development, compensation, and employee relations. Over the past couple of years organizations have been identifying the link of HRM with organizational strategy in order to develop a strategic approach to HRM and to also offer an understanding of how single country or domestic human resource management practices can contribute to organizational performance by leveraging people's capabilities (e.g. Schuler, et al., 1993). In order to understand which activities change when HRM goes international, we have to define IHRM first. Broadly speaking, the consensus is that IHRM is about the worldwide management of human resources (Brewster, 2002). In other words, the purpose of IHRM is to enable the multinational enterprise (MNE) to be successful on a global level. Strategic international human resource management (SIHRM) focuses on strategic HRM in MNEs and recognizes the importance of linking HRM with organizational strategies in order to achieve sustainable competitive advantage (Schuler & Tarique, 2007: 718). 2. Examine two (2) of the factors that drive standardization of HRM practices. Determine whether or not it is advantageous for an MNE to adopt a worldwide corporate culture for each of its subsidiaries. The two factors that drive standardization of HRM practices are having a multinational or transnational corporate strategy and also have an organizational structure that is reinforced by a shared worldwide corporate culture (Dowling et al 2013). A multinational strategy is when a firm's subsidiaries is in the foreign countries enjoying strong local autonomy of business decision-making. Transnational strategy enables the firm to simultaneously achieve local flexibility while rapidly absorbing and differing parent company's innovations. Transnational strategy implies seeking global integration, operational efficiency and performance on a continuous basis. 3. Examine the role of the subsidiary. Compare and contrast global innovators, the integrated player, implementers, and local innovators as subsidiaries. Determine the best role for a company that is just beginning to expand internationally. Provide a rationale for your response. Now I will examine the role of the subsidiary. A subsidiary is the reflection of purchase of a controlling interest that differs from a merger and the parent corporation. It can acquire the controlling interest with a smaller investment. Additionally, stockholder approval is not required in the formation of a subsidiary as it would be in the event of a merger. The subsidiary role specifies the position of a particular unit in relation to the rest of the organization and defines what is expected of it in terms of contribution to the efficiency of the whole MNE (Dowling et al 2013). Subsidiaries can take of different roles. These roles consist of global innovators, the integrated player, the implementers, and the local innovators. The global innovators role assists with the parent firm and helps develops HRM policies and practices which are then transferred to its overseas subsidiaries. The integrated player creates knowledge but at the same time is the recipient of knowledge flows. The implementers rely on the knowledge from the parent or peer subsidiaries and create a relatively small of amount of knowledge themselves. Lastly, there are the local innovators. These subsidiaries engage in the creation of relevant country and region specific knowledge in all key functional areas. For a company that is just starting to expand internationally in my opinion...
References: Brewster, Chris (2002) Contemporary Issues in Human Resource Management: Gaining a Competitive Advantage Oxford University Press.
Schuler, R.J.; Dowling, P.J.; and De Ceiri, H. (1993) An Integrative Framework of Strategic International Human Resource Journal of Management pg. 419-459
Schuler, R.J., and Tarique, I.(2007) ‘International Human Resoure Management: a North American Perspective, a thematic update and suggestions for future research’. International Human Resource Journal of Management pg. 714
Dowling, P. J., Festing, M., and Engle, A. D. (2013) International Human Resource Management Ohio. Cengage Learning pg.49-54
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