HR Strategy Lecture 3

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HR Strategy Lecture 3

• SHRM in a changing and shrinking world
  internationalisation of
• Business and the role of SHRM

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SHRM in a changing and shrinking world
internationalisation of businessand the role of
SHRM

• Learning Outcomes
• By the end of this lecture you should be able to
• identify some of the key background issues
  relevant to the internationalisation of business
• analyse the significance in the growth of
  multi-national companies
• define strategic international human resource
  management
• identify the key components of strategic
  international human resource management
• explain the significance of the capability
  perspective on strategic international human
  resource management
• evaluate the importance of the cultural
  perspective on strategic international human
  resource management.

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Mapping the international strategic human
resource management territory
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Background to the internationalisation of business

• Defining international business
• Why do companies wish to develop their
  international business
• The desire to access international markets
• The desire to access production advantages
  offered by other countries
• To grasp opportunities in developing markets
• To take advantage of financial inducements
• Following the example of competitors
• To avoid host country protectionism

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Principal international business activities

• Import and Export (World Trade Organisation)
• Foreign direct investment (key countries and
  companies)
• Expansion of services and concentration of
  manufacturing bases in developing economies
• Licensing and Franchising

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The importance of the multinational company

• The case for MNCs,
• The case against MNCs
• The worlds top multination companies
• New form of MNCs
• The development economies and their MNCs
• The impact of the domestic economy and employment
  globalisation

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SIHRM definition and analytical framework

• Defining SIHRM
• Strategic MNC components
• Inter-unit linkages
• Internal operations
• External factors
• Internal factors
• The MNCs competitive strategy
• The MNCs experience of international operations

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Integrative framework of SIHRM in MNCs
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SIHRM issues functions, policies and practices

• Inter-unit linkages
• Establishing a mix of employees in local
  operation which is a mix of PCNs, HCNs and
  TCNS.
• Establishing HR policies and practices that link
  units but allow local adaptation
• Using management development to ensure
  organisational coherence

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Internal operations

• Matching and adapting HR practices with the
  competitive strategy of the unit and the local
  cultural and legislative system
• Creating a modus operandi whereby these HR
  policies can be modified to fit changing
  conditions
• Developing global HR policies flexible enough to
  be adapted for local HR practice

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MNC concern and goals

• Global competitiveness
• Efficiency
• Local responsiveness
• Flexibility
• Learning and transfer of knowledge

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The capabilities needed to devise and implement
SIHRM

• Organisational capability
• Line management competencies
• The competencies of HR professionals
• The importance of communication
• The cultural perspective

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The cultural perspective on SIHRM

• What is national culture
• How can differences in national culture be
  measured
• Hofstede (1980, 1991,2001) five dimensions of
  national culture
• Trompenaars (1993) seven distinct cultural
  factors
• Groupings of national cultures

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How can differences between national cultures be
managed

• Ignoring cultural differences
• Minimising cultural differences
• Utilising cultural differences

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What are the effects of national cultural
differences on SIHRM

• Selection
• Training
• Performance management
• Pay Rewards

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Strategic Integration

• The Integration of HR Strategy and Corporate
  Strategy
• The Concept of Strategy Storey and Sisson (1993)
  note that central to the very idea of HRM is the
  notion that it entails a more strategic approach
  to the management of people than do traditional
  personnel
• Strategy can be viewed at three levels
• 1) Corporate Strategy
• 2) Business or Competitive Strategy
• 3) Functional or Operational Strategy

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Strategic Decision Making

• Purcell (1989) distinguishes between upstream
  and downstream strategic decisions.
• Johnson and Scholes (1993) define strategy as
  the direction and scope of an organisation over
  the long term ideally, which matches its
  resources to its changing environment, and in
  particular to its markets, customers or clients,
  so as to meet stakeholder expectations
• Responding to intensified competition
• Managing International operations

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Human Resource Strategy

• Riding the Waves of Technological Innovation
• Meeting the Expectations of the Law
• Managing with or without trade unions
• Ethical Questions
• Best Practice v Best Fit
• Linking Organisational Strategy HR Strategy
• Three theoretical approaches
• 1) Universalist 2) Fit or Contingency Approach
• 3) Resource-based Approach

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The role of the HR Function

• The HR Specialist as a Strategic thinker
• The Shift towards professionalism (CIPD)
• The advantages and disadvantages of shifting the
  responsibility to line management
• Strategic Human Resource Management or Strategic
  Human Resource Manipulation
• Key Factors Internal Technology, Organisational
  Structure, Size, Life Cycle Stages, Strategic
  Drive and Vision. External Legal, Social and
  Political Environments, Unionisation, Labour
  Market Conditions, Industry Characteristics,
  National Culture

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Evaluating HR Strategy

• Head of P/HR with a seat on the Board of
  Directors
• Evidence of Formal Strategy Development
• Role of the HR Function in Strategy Development
• Translation of HR Strategy into work programmes
• Performance of the HR Function Systematically
  Evaluated
• Criteria on which the HR function is Evaluated
• Primary responsibility for Major Policy Decisions
• Changes in Line Management Responsibility

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Evaluating HR Strategy

• Data Collected by the HR Function
• Recruitment of Professionally qualified staff
• Towards a Strategic HR agenda
• Checklist of the role of HR (From operational to
  strategic)
• Expectations of the role of HR
• Adding Value, Changing the focus of HR, the
  influence of HR
• Summary and Discussion