312MKT International Marketing Lecture Seventeen

Learning objectives Explore approaches in defining of human resources management Identify key drivers for international human resources strategy. Explore standardization versus adaptation in international human resources management Define the factors involved in globalization of HRM Explore organizational learning – - Lessons from IKEA

Defining the Concept Generalist Approach (HRM) The pool of human capital under the firm’s control in a direct employment relationship (Write et al, 1994) People who work for an organization (Fisher et al, 2006). People who work in an organization also called personnel (Gómez Mejía et al, 2007) Source: Kazlauskaitė and Kazlauskaitė (2008)

Defining the Concept Distinctive Approach (RBV) All the experience, knowledge, judgement, risk taking propensity, and wisdom of individuals associated with a firm (Barney, 1995). Productive services that human beings offer to the firm in terms of their skills, knowledge, and reasoning and decision-making abilities. (Grant, 1998) Accumulated stock of knowledge, skills, and abilities that the individuals possess, which the firm has built up over time into an identifiable expertise (Kamoche, 1999) Source: Kazlauskaitė and Kazlauskaitė (2008)

Defining the Concept Key Drivers for International Human Resources Strategy (IHRM) Feature Key Part of HR Strategy Key Part of International HR Strategy Maximizing Shareholder Value 70.5 42.4 Crating Core HR Processes 59 51.9 Building a Global Presence 54.8 45.5 Rationalization of Costs 46.6 38.9 Foreign Strategic Partnership 45.0 18.0 Source: Sparrow et al (2004)

Defining the Concept Key Drivers for International Human Resources Strategy (IHRM) Feature Key Part of HR Strategy (%) Key Part of International HR Strategy (%) Knowledge Management Initiatives 39 44.6 E-enabling business or HR processes 37.1 30.2 Creating centres of excellence on a global basis 33.3 24.5 Industry-wide convergence 9.3 4.3 Decentralization 9.1 13.5

Defining the Concept Key Drivers for International Human Resources Strategy (IHRM) Feature Key Part of HR Strategy (%) Key Part of International HR Strategy (%) Outsourcing Business or HR Processes 8.8 12.6 Centralization 1.8 10.2 Source: Sparrow et al 2004

International HR Strategy Standardization Versus Adaptation The most centrally determined areas of HR were as follows: Expatriate management Management development Succession planning Performance management (CIPD, 2001; Brewster et al., 2002)

International HR Strategy Standardization Versus Adaptation Equal opportunity/diversity Health and safety HR planning Compensation (CIPD, 2001; Brewster et al., 2002)

International HR Strategy Standardization Versus Adaptation In line with the need to be sensitive to local environments, regional HR managers were most responsible for the following: Non-managerial level recruitment and selection (with business unit HR managers) Training and Education Communication processes (CIPD, 2001; Brewster et al., 2002)

International HR Strategy Standardization Versus Adaptation Employment contracts/employment law Employee involvement/work councils Industrial relations (with business unit HR manager) (CIPD, 2001; Brewster et al., 2002)

A model of factors involved in the globalization of HRM Organisational Drivers Global Themes and HR Processes Efficiency Orientation Core business process Building rapid global presence Information Exchange organizational learning and partnership Localization of decision making HR Enablers Evaluation/ Contracting of HR HR Affordability Central HR philosophy/ global themes HR excellence & knowledge transfer Globally managed competencies Employer Branding Talent Management Organizational outcome Organizational capability Managing international workforce International assignment & Expatriates (Model of processes globalizing HRM – (Source: Sparrow et al (2004 )

Organizational Learning Happens when acquired knowledge is somehow shared with the internationalizing firm (Jonsson and Foss, 211)

Organizational Learning “Internalization process is not only a matter of learning about foreign markets and institutions. Knowledge must also be gained on the internal resources of a firm, and what the firm is capable of when exposed to new and unfamiliar conditions. ... a firm must develop structures and competence, and that can guide the search for experiential knowledge about foreign markets and institutions” (Eriksson et al. (1997: 353) (Jonsson and Foss, 211)

Organizational Learning “For understanding how internalization progresses, we need to understand how knowledge flows within an MNC, and how MNCs can deploy administrative machinery to influence such flows in desired directions and at desired levels” (Eriksson et al. (1997: 353) (Jonsson and Foss, 211)

IKEA The Idea Concept is a set of overall guiding principles that, while replicated across the IKEA network, offers only general instructions on store design, HR management, etc. As a manager at Inter IKEA Systems explains: “Everything shall not be clear and in detail. Because then it will not move. We are an organism that takes the opportunity. If we should have clear definitions then it would turn into a lubricated machine and it would not be IKEA any more” (Jonsson and Foss, 211)

IKEA Concept in Practice - that is, the current embodiment of the Idea Concept in terms of product offering design and location, pricing policy, and so on - is frequently modified. In the words of another IKEA manager: “The Concept in Practice relates to our latest proven solutions regarding how to run an efficient home furnish ing business, the size of the stores, range, etc. All of those things need to change over time - but it has to be in line with the Idea Concept” (Jonsson and Foss, 211)

IKEA Stories "IKEA stories" are also told online via the IKEA toolbox or in printed booklet versions. The idea is to share “A Stories of co-workers who helped form the IKEA concept, and gathers and shares stories from today's IKEA organizations. The ultimate goal of IKEA Stories is to help maintain a strong IKEA culture, which is a crucial factor for the continued success of the IKEA concept” (Inter IKEA Systems B.V., 2006) Examples? (Jonsson and Foss, 211)

IKEA Group A Great Place to Work Web-link https://www.youtube.com/watch?v=c_FgjtHdfxw

Other Stories Other Examples? Web-link

Jobs of the future What will yours be? Web-link: https://www.youtube.com/watch?v=l4IQEbbiSGk Web-link

Selected References Jonsson, A., & Foss, N. J. (2011). International expansion through flexible replication: Learning from the internationalization experience of IKEA. Journal of International Business Studies, 42(9), 1079-1102. Kazlauskaitė, R., & Bučiūnienė, I. (2008). The role of human resources and their management in the establishment of sustainable competitive advantage. Engineering economics, 5(60), 78-84. Sparrow, P., Brewster, C., & Chung, C. (2004). Globalizing human resource management. Routledge.