1. International Human Resource Management The organizational context
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International Human Resource Management
Managing people in a multinational context
The organizational context

2. Chapter Objectives We learn:
Structural responses to international growth
Control and coordination mechanisms, including cultural control.
Effect of responses on human resource management approaches and activities.
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3. Terms M&A born global matrix structure heterarchy structure
transnational structure
multinational network
chaebols
greenfield building approach
bamboo network firm
clan control
social capital
corporate culture
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4. Management demands of international growth
Figure 2-1
Management demands of international growth
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5. The path to global status
Organizational structures change due to:
Strain imposed by growth and geographical spread.
The need for improved coordination and control across business units.
The constraints imposed by host-government regulations on ownership and equity.
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6. Stages of internationalization
Figure 2-2
Stages of internationalization
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7. Export department structure
Figure 2-3
Export department structure
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8. Sales subsidiary structure
Figure 2-4
Sales subsidiary structure
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9. International division structure
Figure 2-5
International division structure
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10. MNEs’ two major issues of structure
The extent to which key decisions are to be made at the parent-country headquarters or at the subsidiary units (centralization versus decentralization).
The type or form of control exerted by the parent over the subsidiary unit.
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11. Global product division structure
Figure 2-6a
Global product division structure
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12. Global area division structure
Figure 2-6b
Global area division structure
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13. Global matrix structure
Figure 2-7
Global matrix structure
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14. International matrix structure is difficult
Matrix is all but unmanageable because of:
Dual reporting, which leads to conflict and confusion.
The proliferation of communication channels which creates informational logjams.
Overlapping responsibilities, which produce turf battles and a loss of accountability.
The barriers of distance, language, time and culture, which often make it very difficult for managers to resolve conflicts and clarify confusion.
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15. The networked organization
Figure 2-8
The networked organization
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16. The multi-centered networked organization
Management involves less hierarchical structure and features 5 dimensions:
Delegation of decision-making authority to appropriate units and levels.
Geographical dispersal of key functions across units in different countries.
Delayering of organizational levels.
De-bureaucratization of formal procedures.
Differentiation of work, responsibility and authority across the networked subsidiaries.
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17. The role of MNE culture of origin
Figure 2-9
The role of MNE culture of origin
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18. Control strategies for multinational firms
Figure 2-10
Control strategies for multinational firms
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19. Discussion Questions
What are the stages a firm typically goes through as it grows internationally and how does each stage affect the HR function?
What are the specific HRM challenges in a networked firm?
Country of origin influences the firm’s approach to organization structure. As MNEs from China and India internationalize, to what extent are they likely to differ from that observed for Japanese, European and US MNEs?
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