The Organizational Context
The purpose of this chapter has been to identify the Human Resources implications of the various option and responses that international growth places on the firms.
The major elements encountered as a result of international growth that place demand on management:
Management demands of international growth: size of firm, structure, geographical dispersion, control mechanism, national culture and language, host country demand, operation modes, and flow and volume information. All of these elements are related to the managerial of the firm that responses that international growth place on the firms, and to support to connections between organizational factors, management decisions and Human Resources consequences.
The path to global status
Most of firms pass through several stages of organizational development as the nature and size of their international activities growth. They go through these evolutionary stages, the organizational structure changes, typically due to:
The strain imposed by growth and geographical spread
The need improved coordination and control across business unit
The constraints imposed by host-government regulation on ownership and equity
To internationalization organizations, every organization useful different stages, this process is not exactly same for all of organization, it must be stressed that this process of the stages is not exactly the same. Some firms may use licensing, subcontract or other operational modes, instead of establishing own foreign production or facilities.
Stages of Internationalizations
1.Export
The stage for manufacturing firms entering and international operations. An export manager may be appointed to control foreign sales and activity seeks new market. Exporting lead to establishing of an export department at same level as the domestics sales department, as the firm become committed to, or more departments upon.
2.Sales subsidiary
The success organization in sales subsidiaries must have greater control and must have support with good decision regarding the coordination with sales subsidiary, including staffing in management to the supporting export activity.
3.International division
This step may be considerate small if the firm already assembling the product abroad to take advantages of cheap labor or to save shipping cost or tariffs. In this step marketing program is important to take advantage on host-government incentive and control in foreign imports by established foreign production facilities. HRM is important to comply host-government and concern with expatriate management.
4.Global production/ area division
Corporate top management concern to international division and has enjoy too much autonomy ,acting become independently from the domestic operation that it operates as the separate unit a situation that cannot be tolerated as the firm’s international activities become strategically more important.
5.Network of subsidiaries
Control Mechanism
In control mechanism is divided in to two aspect of control there are formal control and informal control. In formal control including structure of organizations, system of reporting, beget and performance target, and formal communications. In the informal control is including personal relationship and corporate culture.
Control through personal relationship
Network of communications is important in here to build and maintained through personal contact, organization need process and forum where staff from various unit that can developed types of personal relationship that can be used for organizational purposes.
Control through corporate culture
Cultural control is as an effectives informal control mechanism. It refer to a process of socializing people so that they come to share a common set of values and beliefs that then shape the behavior and perspective. In mutual imperialism, corporate culture is super-imposed upon national culture in subsidiary operations.
Modes of operation
The organizational forms illustrated are primarily concerned and integrating wholly owned subsidiaries. Internationalizing firm may also adopt contractual (such as licensing, franchising, management contract, and project) and cooperative (such as joint venture) modes in order to enter and develop foreign market. Naturally, these modes are not mutually exclusive: a firm may have licensing arrangement with a foreign joint venture, or have general strategy of growth through international franchising, but combine this with a wholly owned subsidiary or a joint venture some markets.
Modes operation link and influence with relationship with IHRM in context international strategy, such as of IHRM like staffing placement, simultaneously link and influence the mode of operation utilized to support an international strategy.
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