ihrm m2-the logic of global integration

8/12/2019 IHRM M2-The Logic of Global Integration

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Module 2


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Global integration means centralized control overkey resources and operations that are strategic inthe value chain.

Business advantages/ strategic drivers of Global

Integration1. Economies of scale2. Value chain linkages3. Serving global customer4. Global branding

5. Leveraging capabilities6. World class standardization7. Competitive platforms8. Information advantages


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Five ways of exercising control1. Centralization or personal control

2. Formalized control through standardization

of work rules, procedures and processes3. Output control through performance

contracting

4. Normative control through socialization


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Three ways:1. Alignment of decision-making to ensure

that local decisions reflect a globalperspective, particularly through personalcontrol exercised by expatriates

2. The standardization of processes to achievedesired efficiencies and uniform behavior,

using formalized control.3. Socialization


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Mastering Expatriation Motives for expatriation

1. Fill technical/ managerial position

2. Management development- acquiringinternational experience

3. Organisation development- control andcoordination


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However, as companies pursue internationalizationthe inevitable tensions of expatriation becomeapparent. These tensions, together with thechanging demographics of the expatriate

population

the growing number of women, thirdcountry nationals (TCNs), and younger expatriates,and the added need to adjust to dual careersarechanging the way in which companies approachinternational assignments.


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1. Home/ host tension: The presence of expatriatesmay generate tensions with the local workforcefor a number of reasons -insensitive to localcultural norms, high std of living, costly..

2. Global/ local tensions: When top positions in asubsidiary are continuously occupied by rotating

expatriates, many of the capable local managersbecome discouraged. as foreign operationsincrease in size, an intimate knowledge of localoperations becomes as or more important than

communication and coordination with the parenthead office


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3) Short term/ long term tensions: Expatriates areoften criticized for taking short-term decisionsfrom a perspective limited by the duration of theirassignment. . Expatriates may shrink from takingnecessary actions if the benefits are long term butthe cost or risks are immediate.

4) Cost and investment tensions: the need to reducethe costs of expatriation is often one of the majordrivers of localization. Yet while companies canbenefit from smarter management of expatriatecosts, the expense of expatriation can be seen as

an essential investment in building the linkagesnecessary for managing a transnational firm and inlearning across organizational boundaries.

5) Demand/ supply tensions

ihrm m2-the logic of global integration

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