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Chapter Two

2. (c) 2008 by Nelson, a division of Thomson Canada Limited.. Chapter Learning Objectives. After reading this chapter, you should be able to:discuss how international growth places demands on managementanalyze the effect of responses on human resource management approaches and activities. 3. (c)

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Chapter Two

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    1. 1 (c) 2008 by Nelson, a division of Thomson Canada Limited. Chapter Two The Organizational Context

    2. 2 (c) 2008 by Nelson, a division of Thomson Canada Limited. Chapter Learning Objectives After reading this chapter, you should be able to: discuss how international growth places demands on management analyze the effect of responses on human resource management approaches and activities

    3. Chapter Learning Objectives define factors that impact on how managers of internationalizing firms respond to these management challenges including structural responses to international growth control and coordination mechanisms, including cultural control

    4. 4 (c) 2008 by Nelson, a division of Thomson Canada Limited. Opening Vignette UPS: From Bicycle Messenger Service To $30 Billion Multinational Company internal responses (structure/control/HRM) as firms grow globally

    5. 5 (c) 2008 by Nelson, a division of Thomson Canada Limited. Terms

    6. 6 (c) 2008 by Nelson, a division of Thomson Canada Limited. Management Demands of International Growth (Figure 2.1)

    7. 7 (c) 2008 by Nelson, a division of Thomson Canada Limited. 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.

    8. 8 (c) 2008 by Nelson, a division of Thomson Canada Limited. Stages of Internationalization (Figure 2.2)

    9. 9 (c) 2008 by Nelson, a division of Thomson Canada Limited. Evolutionary Process structural responses control mechanism HRM policies

    10. 10 (c) 2008 by Nelson, a division of Thomson Canada Limited. Export Department Structure (Figure 2.3)

    11. 11 (c) 2008 by Nelson, a division of Thomson Canada Limited. HRM’s Role in Firms Early Exporting unclear and limited training of the foreign agency staffing strategies that focus on the international customers demands

    12. 12 (c) 2008 by Nelson, a division of Thomson Canada Limited. Sales Subsidiary Structure (Figure 2.4)

    13. 13 (c) 2008 by Nelson, a division of Thomson Canada Limited. HRM’s Role in Sales Subsidiary Staffing HCNs knowledge of foreign market, language, needs HR policies for local employees PCNs maintaining control, ethnocentric attitude, expatriation management ( staffing, training, compensation)

    14. 14 (c) 2008 by Nelson, a division of Thomson Canada Limited. International Division Structure (Figure 2.5)

    15. 15 (c) 2008 by Nelson, a division of Thomson Canada Limited. HRM’s Role in International Division Structure ( Foreign Production) expatriate management monitoring subsidiary HR function communicating corporate policies ( i.e compensation) facilitating control of subsidiaries training ( socialization and pre-departure training) supervising transfer of management and technical know how

    16. 16 (c) 2008 by Nelson, a division of Thomson Canada Limited. 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

    17. 17 (c) 2008 by Nelson, a division of Thomson Canada Limited. Global Product Division Structure (Figure 2.6a)

    18. 18 (c) 2008 by Nelson, a division of Thomson Canada Limited. Global Area Division Structure (Figure 2.6b)

    19. 19 (c) 2008 by Nelson, a division of Thomson Canada Limited. HRM’s Role in Global Product/Area Division adapting HRM activities to host countries specific requirements local employee decisions made by subsidiaries monitoring with less intervening in local affairs

    20. 20 (c) 2008 by Nelson, a division of Thomson Canada Limited. As MNE Grows a Global Perspective Accelerates Think global, act local paradox” MNE’s push toward global integration and host stakeholders push for local responsiveness

    21. 21 (c) 2008 by Nelson, a division of Thomson Canada Limited. Global Matrix Structure (Figure 2.7)

    22. 22 (c) 2008 by Nelson, a division of Thomson Canada Limited. 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.

    23. International Matrix Structure is Difficult 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.

    24. International Matrix Structure is Difficult Particular care with staffing focus less on structure and more on developing the abilities, behaviour and performance of individual managers

    25. 25 (c) 2008 by Nelson, a division of Thomson Canada Limited. HRM’s Role in Matrix Structure staffing (interpersonal skills) management development HR planning

    26. Beyond the Matrix (Network of Subsidaries) Organizational structures (decentralized/organic forms) heterarchy transitional networked firm

    27. 27 (c) 2008 by Nelson, a division of Thomson Canada Limited. HRM’s Role in the Heterarchy Structure corporate culture and shared awareness of central goals and strategies organizational success rests solely on the required human resources experienced personnel rewards and performance management use of staff as informal control mechanism knowledge management

    28. 28 (c) 2008 by Nelson, a division of Thomson Canada Limited. HRM’s Role in the Transnational Structure developing global leaders staffing transfers

    29. 29 (c) 2008 by Nelson, a division of Thomson Canada Limited. The Networked Organization (Figure 2.8)

    30. 30 (c) 2008 by Nelson, a division of Thomson Canada Limited. 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.

    31. The Multi-Centered Networked Organization delayering of organizational levels. de-bureaucratization of formal procedures. differentiation of work, responsibility and authority across the networked subsidiaries.

    32. 32 (c) 2008 by Nelson, a division of Thomson Canada Limited. The Culture of Origin and Structural Paths to Globalization (Figure 2.9)

    33. 33 (c) 2008 by Nelson, a division of Thomson Canada Limited. Control Strategies for Multinational Firms (Figure 2.10)

    34. 34 (c) 2008 by Nelson, a division of Thomson Canada Limited. 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?

    35. 35 (c) 2008 by Nelson, a division of Thomson Canada Limited. Case: Globalizing Corporate Culture – “True Believers” in “The Toyota Way” How is Toyota trying to internalize its corporate values and beliefs? What organizational level is Toyota targeting and why? Can you find examples of other multinational companies and their ways to and tools for transferring their organizational values and beliefs to managers and employees.

    36. Case: Globalizing Corporate Culture – “True Believers” in “The Toyota Way” 3. Many national and multinational companies try to create a very strong organizational or corporate culture. Ideally managers and employees should eat and breath Company A and become Company A people. In times of skilled labor shortages and strong competition for management talents how could a strong company culture be contraproductive and represent a barrier in the external recruitment and selection process?

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