Narrowing the gap between strategic HRM plans and Effective Implementation
A firm’s HRM practices can be affected by a globalized strategy. As a globalized firm delves into a different HRM practice so thus the creation of new issues and problems. The organizational units of a modern multinational must be configurable into a business-unit dimension to create new products or into a geographical unit able to speak with one voice. Organizational units that are distributed around the world must be capable of integration along a number of dimensions, the priority of which is determined by the firm’s strategy (Cox 1997). A network representation of the organization appears to be the one that is most effective; it is the best basis on which to conceive of the constant balancing of the strategic forces and organizational dimensions. One of the factors influencing the choice of organization is the level of international development that a company has attained, which is itself a combination of factors. The first is the mode of participation in a country’s economy whether the firm participates with exports, joint ventures, or wholly owned subsidiaries. Another factor is the role assigned to subsidiaries. A third is the percentage of assets and management located outside the home country. The proportion of a company’s activities conducted in other countries is regarded as the best measure of how internationally developed, or global, the company is (Galbraith 2000).
Often companies claim to be global based on the percentage of sales outside the home country, but it is quite possible to be a national company with a high level of exports. The real management and organizational challenges arise when fully functional subsidiaries are created in other countries. Thus, a better measure of the level of international development includes the percentage of assets, employees, and, particularly, management that are located outside the home country, along with highly valued activities like R&D. Once a company creates fully functional subsidiaries and develops into a multidimensional network, the other factors come into play to influence the type of organization. Where does such expertise come from? Perhaps from those firms’ deterritorialized, fully internalized capabilities, but just as likely from the territorial contexts in which they are inserted (Sisson & Storey 2000). Clearly, the deployment of advanced technology and knowledge, especially if it is firm-specific and where access is subject to significant legal or economic barriers to entry, means major developmental power in today’s world, and the global business organization seeks such power of deployment. There are major effects on receiving economies. But the search for this power, again, says little about territorialization or deterritorialization of technology and knowledge generation in the world economy, and much more about corporate supply of such knowledge and technology once developed. Indeed, in place of the model of the international firm as vertically integrated worldwide business hierarchy, much recent reflection about the organization of global business has turned on the notion of the firm as the central node in a variety of global linkages. Imagine the extreme case of a fully realized global supply oligopoly (Kamoche 2001).
Resources would flow between parts of a firm, between places, without having any particular dependence on any particular place. Such assets whether goods or information would be producible in so many different places as to constitute a true perfect market in locations for their production. It matters little whether they are actually produced at many locations; one could imagine the extreme case of global supply from a single place, but where that place has no specificities that render it immune to substitution by another place. One can even imagine the extreme case where the only international flows of resources are financial and intellectual, but where, in the presence of few scale economies, a global firm administers many local production systems as opposed to a few that serve broad territories; in this case, the possibility of switching from local to centralized systems would be critical to enforce the condition of substitutability, in concert with the absence of locally specific assets (Debrah & Smith 2002).One could imagine a pure market version of a globalization process, where numerous local economies, characterized by relatively small firms, competed with each other on global markets. Purchasers armed with perfect information and highly developed and very flexible marketing networks, could switch from one locality’s product to another almost instantaneously. Hierarchy is not necessary, then, to the flow economy’s definition, in contrast to the image of oligopoly. In reality, however, this ability to switch tends to be associated with scale in marketing and ability to coordinate supplies from different, substitutable sources. What should be clear from the preceding is that global capitalism is being constructed through interactions between flow economies and territorial economies (Cappelli 1999). A gap between strategic human resource plans and their effective implementation is created once internal and external factors change. A change in the internal and external environment would mean a change in the plans and the delay in implementation. To counter the gap the best thing to do is to make sure that the strategic human resource plans would be adaptable to the changing environment so that there would be no delay in implementation.
References
Cappelli, P (eds.) 1999, Employment practices and business
strategy, Oxford University Press, New York.
Cox, KR (eds.) 199, Spaces of globalization: Reasserting the
power of the local, Guilford Publications, New York.
Debrah, YA & Smith, IG (eds.) 2002, Globalization, employment,
and the workplace: Diverse impacts, Routledge, London.
Galbraith, JR 2000, Designing the global corporation, Jossey-
Bass, San Francisco.
Kamoche, KN 2001, Understanding human resource management, Open
University Press, Buckingham.
Sisson, K & Storey, J 2000, The realities of human resource
management: Managing the employment relationship, Open
University Press, Philadelphia.
Credit:ivythesis.typepad.com
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