International Human Resource Management Essay

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International Human Resource Management

Over the last several years, the issue of multinational corporations (MNCs) and transnational organizations has been increasingly brought to the forefront. Part of the reason for this, is because of shift that is taking place in the way many businesses are addressing the needs of customers around the globe. Simply put, an MNC is when you have a corporation that makes at least 25% of its revenues from outside of its home country. There are several different categories to: include: country focused, globalized and international. The country focused entity will derive its revenues from select countries outside of its own (such as: a British company making over 25% of its profits in Canada). A globalized corporation is when they will have operations in areas that can provide them with specific economic advantages. An example of this would be when an organization establishes manufacturing operations in Mexico and they sell their fished products in the United States. An international corporation is one that will build off the innovations that were developed by various subsidiaries through: the use of research and development. The basic idea is to use the advancements that were made by these divisions to: help build new markets for the company. These different elements are important, because they would provide a variety of organizations with a number of options in: determining how to structure their corporation in line with their business model. (Multinational Corporation 2011)Get full Download Microsoft Word File access
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Essay on International Human Resource Management Assignment

However, the shifts that have been taking place in the world economy have meant that many of these entities have been slowly evolving towards a new organizational structure (the transnational enterprise). This is when you are taking all of the different approaches and are combining them into one. The key concept is to use these various elements, to take an approach that will address specific cultural factors that are relevant in local markets. Then, augment them with select aspects of the different theories, to help maximize the underlying profit margins. This is significant, because it is showing how the way that corporations are structuring their businesses is evolving. (Horn 1999, pp. 125 -- 129) to fully understand the changes that are occurring requires: looking at the research on MNCs, how global firms are becoming national organizations with international operations, the role of maintaining legitimate businesses and the effectiveness of a voluntary code of ethics. Together, these different elements will provide the greatest insights, as to the how the structure of many corporations is changing.

Much of the international management literature suggests that the traditional MNC has been replaced by the "transnational" enterprise. Using research on international HRM in MNCs, discuss whether you agree or disagree with this view.

When you look at what is taking place, it is clear that the overall nature of the MNCs has been constantly changing. The reason why, is because the competitive pressures of globalization have meant that many organizations must adapt their business models. This is a part of an effort, to maximize their profit margins and to be able to adjust to the changes they are seeing. Since the late 1980's, this has meant that a shift has taken place in how a variety of businesses are structuring themselves. (Horn 1999, pp. 125 -- 129)

Evidence of this can be seen with observations from Horn (1999), who said, "The transnational organization seeks to overcome the weaknesses of more traditional models by moving beyond global integration / local responsiveness tradeoffs implicit in international models. To be globally competitive requires both." This is significant, because it is showing how the overall nature of this business model is changing. As a result, the way: companies are structuring themselves and focusing on achieving these different objectives has given rise to this new kind of thinking. (Horn 1999, pp. 125 -- 129)

To achieve this objective means that businesses must be embracing three different elements to include: there must be excellent coordination / communication, they need to effectively manage the flow of funds and it must link the different ideas / strategies together. This has translated into a number of different entities facing a variety of challenges. As a result, they have begun to use different forms of technology to help achieve these different goals. Where, executives have been forced to make radical adjustments to: their basic strategy and how they can be able to reach out to customers in numerous markets. The below diagram illustrates the shift that has taken place in this basic structure over the last 20 years. (Horn 1999, pp. 125 -- 129)

The Change that has taken place in the way Corporations are structured

Multi-Domestic

International Exporter

Transnational

Global Entities

(Horn 1999, pp. 125 -- 129)

What this is showing is the shifts that have taken place in how these organizations are adjusting to changes from globalization. as, most companies were: following a standard formula for many years. However, once international exports began to increase, is when this would have an impact upon the overall bottom line of an entity. as, they began to see the tremendous profits that they could make in the long-term by: going into markets where labor costs were cheaper and exporting their products into countries with high amounts of domestic consumption. These two factors meant that the basic structure was changed. Where, a variety of corporations began to integrate their operations together to achieve these different objectives. This caused the line between the different types of structures to become a combination of all of these activities. These elements are significant, because they are highlighting the overall changes that have taken place in how a variety of businesses are organized. (Horn 1999, pp. 125 -- 129)

As a result, based on: the literature that was examined and using some logic, it is obvious that this kind of change is taking place. This means that we agree with the fact that the MNC is evolving into various forms of transnational entities. However, it is important to note that select corporations will continue to maintain some kind of structure that is similar to many traditional MNCs. This is because, they could be focused on earning the majority of their profits in: a particular region and have no interest in changing their strategy. In this aspect, one could argue that the role of MNCs has shifted for a variety of businesses. Yet, the overall scope of these changes will depend upon: the kind of industry and what their strategy is for increasing their overall bottom line. These different elements will mean that there will be a certain number of companies that will follow the new transnational structure, while others will embrace the traditional role of MNCs.

Global firms are national firms with international operations' (Hu, 1992, California Management Review, Vol. 34). Discuss with reference to MNCs from specific countries and drawing on the relevant international HRM literature.

Like what was stated previously, depending upon the industry and the business model of the company. The development of transnational corporations will vary from one region of the world to the next. This means that there has been continuous growth in the number of entities that are becoming more transnational in nature. Evidence of this can be seen with the fact that there are 773, 019 companies that are organized in this fashion. This is important, because it shows how the overall nature of the shift, will mean that many business models are changing. (Transnational Entities 2007)

There are a wide variety of corporations around the world that have been embracing this new business model. At the heart of this strategy, is ensuring that there are effective controls in place for the supply chain. The reason why, is because they use this tool, in conjunction with select aspects of technology. This allows managers to understand what is taking place in a particular region. Where, they will utilize a basic formula to: know the precise activities of their different operations around the world and streamline their approach for each market they are located. The below diagram illustrates how most transnational organizations have structured their supply chain to achieve these different objectives.

The Supply Chain of Transnational Organizations

Materials

Supply Network

Integrated Enterprises

Market Distribution

Sourcing, Logistics, Operations

End Consumers

(Sauvant 2008, pp. 34 -- 41)

This diagram is showing how there is increased communication and collaboration that is occurring inside transnational organizations. This means that all of the different departments of an entity will use various forms of technology to: improve communication between the different divisions. This helps to increase the control of the supply chain by: ensuring that the right amount resources and products are sent those markets where demand is the highest. This is significant, because it is illustrating how the overall structure of many corporations has been constantly changing to address these challenges. (Sauvant 2008, pp. 34 -- 41)

An example of how many businesses are embracing the transnational model can be seen with Coca Cola. During the 1980's the company was able… [END OF PREVIEW] . . . READ MORE

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