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What are the implications for the HR Strategy of an organization of operating on a multi-divisional , multi-national basis ?

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Introduction

What are the implications for the HR Strategy of an organization of operating on a multi-divisional , multi-national basis ? Before I start examining any of the implications I must explain what is meant by a firm operating on a multi-divisional and multi-national basis. Note that in this essay I am looking at a firm that adopts both of these principles not just one which does exist. Firstly a multi-divisional firm is split into several divisions which all operate as separate businesses, but still all report back to corporate headquarters. When this is put together with a multi-national company which is were a company operates in at least one more country than their own. The result is a firm where divisions are based in each country they operate in or in regions and report back to corporate HQ, shown below is a diagram which shows a typical multi-divisional, multi-national firm. Chief Executive Officer Corporate Office Spain France Germany Portugal Product Product Product A B C The process of internationalisation and globalisation has multiplied in the last two decades as firms try and gain a competitive advantage perhaps through cheaper labour, better access to raw materials or even closeness to its markets. There are said to be four stages of globalisation the first stage of internationalisation is were a company operates in a foreign country but its operation is just a replication of its domestic business, multi-divisional multi-national firms are said to be in the second or third stage of globalisation. ...read more.

Middle

This approach allows people to work towards common goals so they can identify each other and hopefully work together in harmony because the uncertainties and differences have been transformed into a common organizational culture. However to get these workers to operate in teams is more complex and depends on the firm's ability to achieve a 'fit' between these various cultures. The term fit refers to the extent that cultures are brought into a working relationship that allows tension and misunderstanding to disappear within the relationship. Cultural fit does not imply an integration of cultures but merely provides a mutual acceptance from all parties involved .Perhaps one of the most difficult elements in culture is those cultural attributes that are more deeply rooted than others if individuals can not lose these beliefs than a cultural fit will be unlikely to be achieved. I have talked about some of the main issues regarding culture and how to deal with it , but it all depends on how far HQ want to accept local cultures to fit in with their own. DEPENDS ON DECENTRALISED One of the biggest problems for firms is the problem of expatriate failure and it is up to the firm to try and prevent this. Expatriates leaving not only cost the company in terms of salary wasted but when combined with personal and family training, travel and relocation can cost the company nearly three times as much as they spend on a HCN. ...read more.

Conclusion

The issue of appraisal must also be incorporated into ones international HR strategy, however in doing this firms often encounter many problems. When workers are working in several different countries it is very hard to compare and comment on their success as the environments and the economies are completely different. This non-comparable data makes appraisal extremely difficult especially when it comes to financial data due to currency conversions. Despite these problems there are certain methods open to the firm one being the use of transfer pricing and other financial tools to try and reduce the complexities of the international environment. Another approach used by firms is to ignore the financial implications and try and assess the workers of a division by the achievement of long term goals such as market share growth or health and safety improvements. Many firms even just carry out their domestic appraisal methods although they can not always be applied to HCNs and TCNs as they cannot be linked to their jobs. Whatever method firms choose they must be careful not to upset workers as performance appraisal itself conflicts the issue of cultural applicability. Unfortunately appraisal can be interpreted as a signal of distrust or even an insult in some cultures for example the Japanese never directly talk about failure but just mention the possible implications. Firm's must remember that evaluation requires cultural sensitivity which can be overcome by devising a suitable system with the guidance of HCNs. ...read more.

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