Strategic Global Human Resource Management:Its Role in Global Networks

Michael Harvey & Milorad M. Novicevic

Presented By

Muhammad Usman

Purpose The purpose of this paper is to develop a theoretical framework

for flexible modes of strategic human resource management within a global network organization configuration.

Scheme of StudyIntroductionProposed theoretical framework Specific barriers and competencies. Practical implications of the SGHRM system. various approaches and challenges of SGHRM systems Conclusion

Introduction An important function of a global human resource manager is

to shape a culture of developing external linkages (i.e., to local organizations and critical stakeholders) for a global organization

Global human resource manager facilitates the integration of internal functional (i.e., international human resource management) and cross functional (i.e., global marketing, R&D and operations)

Theoretical framework Existing SIHRM frameworks describe policies and practices

focused on aligning the strategic initiatives of the organization with the development of global managers.

Within these frameworks, a SIHRM system is viewed “as a way for MNCs to effectively manage and control their overseas operations.

The primary focus is on explaining the practices and policies that MNCs use to coordinate and control the hierarchy of their dispersed global operations

Cont….. Whereas The global network construct can be used to examine

not only the tangible network design elements of the global organization (i.e., webs of facilities and product development ties and activities) (Mabert & Venktarmanan 1998), but also to emphasis the social infrastructure and human activities and relations envisioned, built and maintained by global human resource managers.

Global human resource managers are required to perform HRM systems within socially rich cross-border network structures

Role of Managers in Global OrganizationsThe primary activities of a global human resource

manager involve selecting appropriate global human resource strategies.

Providing a leadership role in the cultural change of the organization under conditions of accelerating strategic ambiguity.

Global human resource managers are required to possess multiple competencies that are both relational and contingent in nature (Henderson & Clockburn 1995).

Cont….The global human resource manager is

encouraged to promote a spirit of multicultural interpersonal and inter organizational trust, within which members of the networked organizations can learn to cooperate (Barney & Hansen 1994).

Role of SGHRM in Global NetworksGlobal strategic HRM augments theImportance of resource flexibility, Strategic leadership, Human capital,Technological and manufacturing advances Cooperative synergies between

organizational culture and structure

Leadership in Global Network

Implications for International Research SGHRM system requires that the theoretical developments in

global assignment research go beyond the standard economic (agency, transaction cost, and control) and social (institutional and political) theories of the firm.

New theoretical perspectives should extend and supplement the current integrative SIHRM frameworks based on resource-based, resource dependence, and human capital theories.

Toward global leadership role, a SGHRM system is to be designed to provide all employees across the globe an equitable access to success in the MNC

Barriers to SGHRM in Global Networks Frequent ambiguity about human resource management

authority, Multiple interdependencies among subsidiaries, Increased uncertainty about sustainability of network

flexibility and efficiency, Possible discontinuities in securing top level support for

changes in human resource management systems, and Difficulties in acquiring the multiplicity of skills and

competencies required for effective SGHRM in knowledge sharing.

Cont…….Multiplicity of network units.Global network instability.Discontinuities in internal organizational

support.Multi-dimensionality of strategic human

resource leadership task.Multi-skill leadership demands for global

network human resource management.

CompetenciesRelational competence to navigate the global network

knowledge base through consensus building, accountability charting, conflict management, performance contracting and innovation management.

Managerial competence to design creative human resource allocations, negotiate concerted strategies, and structure multiparty relationships.

Cont…..Motivational leadership in incentivising units to

demonstrate and share skills at joint human resource management problem solving.

Cross-functional competence in auditing managerial loss of control and difficulties in assessing network accountability in terms of human resource management adaptations

Managerial IssuesManagerial issues like the leadership of the

organization is dispersed throughout the global system top management must recognize the impact on the organizational hierarchy.

The top management of the organization must recognize that strategic initiatives may be generated by subsidiaries and shared with other subsidiaries rather than having to come from headquarters.

The governance and control mechanism of the global network organization will need to be modified to allow localized decision-making.

The selection process for subsidiary management must be modified to align it with the role of the key subsidiary managers and the modified independence of the subsidiaries

ConclusionTransformed role of HRM managers within

global networks must be clearly defined.The SGHRM system will increase in importance

as hypercompetitive, regulatory and technological changes taking place in the global environment drive more companies to adopt a global networks organization.