Morris Architecturalframeworkglobal 2016

An architectural framework for global talent management
Author(s): Shad Morris, Scott Snell and Ingmar Björkman

Source: Journal of International Business Studies , August 2016, Vol. 47, No. 6, Special
Section: Widening the Lens: Rethinking Distance, Diversity, and Foreignness in
International Business research through Positive Organizational Scholarship (August
2016), pp. 723-747
Published by: Published by: Palgrave Macmillan Journals on behalf of Academy of
International Business.
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Journal of International Business Studies (2016) 47, 723-747 JSj-C
© 201 6 Academy of International Business All rights reserved 0047-2506 'HP*
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An architectural framework for global talent

management
Abstract
Shad Morris1, Scott Snell2 and
A unique characteristic of the multinational corporation is that it comprises a
Ingmar Björkman3 geographically dispersed and culturally differentiated workforce that embodies
both firm-specific and location-specific human capital. This article takes an
1 Marriott School of Management, Brigham Young
architectural approach to describe how different types of human capital develop
University ; Provo , USA; 2Darden School of
from the individual level, to the unit level, and then to the firm level in order to
Business, University of Virginia, Charlottesville ;
USA; 3Aalto University School of Business, build a talent portfolio for the multinational corporation. Depending on the
Helsinki, Finland company's strategy (multidomestic, meganational, transnational), different
configurations of the talent portfolio tend to be emphasized and integrated to
Correspondence: achieve competitive advantage. Implications for theory and practice are dis-
S Morris, Marriott School of Management, cussed and a research agenda is introduced.
Brigham Young University, Provo, 84602, Journal of International Business Studies (201 5), I -25. doi: 1 0. 1 057/jibs.20 1 5.25
USA.
Tel: +801 6361314;
email: morris@byu.edu Keywords: knowledge-based view; HRM strategies; human/knowledge capital; multi-
national corporations (MNCs) and enterprises (MNEs); talent management
INTRODUCTION
How and where do companies concentrate their talent invest
ments in order to globally compete? Companies have addressed
this question in a variety of ways, ranging from developing leaders
in unlikely emerging markets to investing in new technologies for
talent gap assessment (Stahl et al., 2012). However, in a post-
industrial age, what drives talent decisions is the utilization of
knowledge (Kogut & Zander, 1993). Knowledge is embedded in
people, and the question of how to globally develop and integrate
strategic human capital proves to be of both practical and theore-
tical significance.
Scholars have recently begun studying the link between human
capital and knowledge-based competitive advantage (Fey & Furu,
2008; Hatch & Dyer, 2004; Von Glinów, 2005). However, there is a
theoretical gap in the literature that may constrain further empirical
progress in this area of research. Traditionally, the knowledge-
based view (KBV) arguments about advantage have been considered
mainly at the firm level, without addressing more microfounda-
tional parts of the workforce as an input to strategy (Cappelli &
Received: 7 December 2012
Keller, 2014; Foss & Pedersen, 2004). Conversely, most research on
Revised: 29 April 2015
human capital (and human resources, generally) tends to address the
Accepted: 10 May 2015 issue from an individual perspective and ties human capital to the
firm by aggregating the individuals' human capital. Theoretical work
Online publication date: 19 November 2015

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1
724
about human capital at a more macro or strategicemphasizes

level the individual level of analysis, while
is less developed (e.g., Campbell, Coff, & Kryscynski,
recognizing the more macro level implications (e.g.,
2012; Morris, Alvarez, Barney, & Molloy, Becker,
2013; 1964). Recent work has focused on unpack-
ing
Ployhart & Moliterno, 2011), especially when wethe phenomenon of macro human capital
"emergence" (cf., Ployhart & Moliterno, 2011). We
consider the scope and complexity of a multinational
corporation's (MNC) global portfolio of talent. build on this literature and extend it toward the
firm-level view of MNCs.
Our purpose is to develop a framework that shows
the overall architecture (or theoretical structure)Third,
of we use our framework to examine how
an MNC's global portfolio of human capital. different
We do types of human capital combine and inter-
this in order to address questions about how act with one another in the context of different
firms
develop and leverage their talent to generate and strategies. In particular, three different strate-
global
giesas- multidomestic, meganational, and transna-
integrate knowledge strategically. We define talent
tional (Evans, & Bjorkman, 2011) - are central to
people who make valuable contributions to organi-
zational objectives (e.g., high-level managers, our
high-
analysis.1 These strategic approaches illustrate
how companies can align their talent portfolios to
potential individuals, and those with rare knowledge
and skills) (Schüler, Jackson, & Tarique, 2011; support their particular needs for knowledge genera-
Scullion & Collings, 2011; Vaiman, Marshall, tion and integration. We build on work from inter-
Napier, Taylor, Haslberger, & Andersen, 2010).national human resource (HR) scholars to discuss
Hence employees may be considered talent regard- ways in which companies may draw upon HR
less of their position or location. Such a framework is management to design and encourage the appropri-
intended to achieve three outcomes. ate human capital integrations and then to
First, we use the framework to explore which types discuss how this plays out at the firm, unit, and
of human capital matter most in the context of a
individual levels (Lengnick-Hall & Lengnick-Hall,
company's talent portfolio. We discuss four different 2006).
types of human capital, using the economic notion We use the term architecture to refer to this frame-
of asset specificity (Riordan & Williamson, 1985). work in order to clarify that the form a global talent
Researchers have noted that assets are potentially portfolio takes has a direct impact on the way talent
more valuable as a source of advantage when they functions in generating and integrating knowledge
cannot be easily transferred from one context to
aligned with strategy. Choices about this configura-
another. Within the MNC, there are two main tion represent an important facet of organizational
contexts that determine the immobility of assets: design, but one for which there is very little research
(a) firm context (i.e., firm specificity) and (b) local (cf., Morris & Snell, 2011). Accordingly, in the
market context (i.e., location specificity). On the one discussion section, we provide a research agenda to
hand, firm-specific human capital is a more likely help scholars assess a firm's human capital architec-
advantage for the firm because it is less transferrable ture for global talent management. Our intent is to
and therefore more difficult for other firms to appro- provide a conceptual lens that encourages future
priate (Lepak & Snell, 1999; Wright & McMahan, scholarship and empirical research in a way that
1992; see Mackey, Molloy, & Morris, 2014 for excep- directly informs managerial practice.
tions). On the other hand, a critical source of
strategic knowledge relates to the local context HUMAN CAPITAL IN THE GLOBAL CONTEXT
because it can be both a source of differentiation to
As a starting point for theory, we recognize that
the MNC locally and of knowledge generation glob-human capital cannot be independent of individuals
or the context in which it is formed. As shown in
ally (e.g., Caligiuri, Lazarova, & Zehetbauer, 2004;
Joshi, Labianca, & Caligiuri, 2002; Reiche, Harzing,
Figure 1, we lay out two dimensions of the human
& Kraimer, 2009). We will discuss how both firm capital context that are unique to the MNC, each
specificity and location specificity influence compe- reflecting the distinction between general and speci-
titiveness of the MNC. fic human capital (cf., Lepak & Snell, 1999; Ployhart
Second, we use our framework to address & Moliterno, 2011). The first dimension refers to the
questions related to degrees of analysis in talent degree of firm specificity of knowledge. Firm-specific
management. Keeping with the microfoundations
human capital is developed and maintained intern-
perspective of strategy, we examine the interplay
ally of
by the firm itself. It is contextually embedded
human capital at the individual, unit, and firm
within the firm, reflecting knowledge relevant to a
levels. Much of the literature on human capital
unique company culture, routine, and system,
Journal of International Business Studies

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725
High
Õ
d)
CL
CORPORATE ģ SUBSIDIARY
il
• Individual: Developed through firm-wide • Individual: Developed through personalized
experience and/or directives. reconciliation of local and firm experience.
• Unit: Gererated inductively and dedudtively • Unit: Gererated through aggregated exchange
through social context of exchange/ combination. and combination of local and firm knowledge.
• Firm: Emerges as variation across business units • Firm: Variety/heterogeneity across multiple
is reduced to a common frame. units in the MNC.
LOW High
Location-
INTERNATIONAL LOCAL
• Individual: Developed through experience or • Individual: Developed through action and

training of cross-border skills. reflection in the local context.
• Unit: Aggregated experience among members of • Unit: Generated through exchange and
the unit that generalizes across contexts. combination among members of the unit.
• Firm: Common experience that provides global • Firm: Variety/heterogeneity among multiple
competitive parity with other firms. units in the MNC.
Low
Figure 1 Global talent portfolio.
which knowledge is not potentially applicable across Local Human Capital

firms (cf., Becker, 1964). Local human capital represents knowledge, skills,
The second dimension is the degree of location abilities, and other attributes that reflect the loca-
specificity (cf., Krupka, 2007). In the research on tion-specific experiences of employees in a particular
MNCs, location-specific human capital has been country or market. Such knowledge includes an
identified by scholars as a distinct form of knowl- understanding of customer needs, cultural tradi-
edge that is relevant or applicable in a particular tions, institutional barriers, and political processes
country (cf., Isobe, Makino, & Montgomery, 2000; that may differ across countries (Doz & Santos,
Rosenthal & Strange, 2008). The local context 199 7).2 This knowledge is found within a firm's
represents the most salient factor (even over thetalent base as well as within the local market net-
regional context) in examining MNCs (Shenkar, works, associations, and organizations outside the
2004). In the case of location-specific human firm.
capital, the embedded contextual knowledge per-
tains to a particular geographic, cultural, political,Individual level
or economic system rather than to a particular firmAt an individual level, host-country nationals may
(Cantwell & Mudambi, 2005; Inkpen, 1997; be the most likely to develop local knowledge, but
Schulz, 2001). this comes from their familiarity with the host
Putting the dimensions of firm specificity and market, rather than solely their nationality or loca-
location specificity side by side, we identify four tion (Caligiuri, 2013). From the firm's perspective, it
critical types of human capital within the MNC: can either acquire local human capital by hiring
local, subsidiary, corporate, and international. Each individuals who already have the experience the
of these types develops differently, is typically man- firm needs or allow the knowledge to develop
aged differently, and contributes differently to the internally. Individuals gain local human capital as
overall strategic posture of the firm. they engage in meaningful interactions with local

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1 An architectural framework for global talent management Shad Morris et al
726
constituencies (Caligiuri, 2013). Companies may The process of combining experience as well as
help individuals gain these experiences by encoura-
acting together in the local context helps both to
refine unit-level human capital and to create a
ging employees to reach outside their offices to talk
more with local clients. These experiences create broader, collective, cospecialized asset for the MNC
tacit forms of knowledge that make individual (Teece, 1986). Managers frequently refer to their
employees strategically valuable to the firm and "human capital" in a country and conceive of that
irreplaceable by routines, processes, or systems. capital more broadly than the mere sum of knowl-
edge and experience of individual employees.
However, firms and units with high levels of local
Human capital is a construct that transcends the
human capital embedded within the routines, pro-
individuals and, in this sense, represents a key
cesses, and systems may be more effective at devel-
oping local human capital at the individual level. inflection point between individual and organiza-
Because of its contextually unique and often unspo-tional learning. Any individual may have partial or
unique knowledge, unique to his or her experience.
ken characteristics, local human capital is not easily
transferable to other country contexts. However, it
Butis when combined with the knowledge of others in
potentially transferable to other firms within thetheunit, the aggregated knowledge may represent a
same locale. For that reason, firms that are new far more robust, socially complex, and path-depen-
entrants into a region are typically very interested
dent form of human capital (cf., Kozłowski & Klein,
in acquiring or developing local human capital 2000). Hence local human capital at the unit level is
because it provides a foundation for doing business
neither independent of individuals nor the context
there. Firms frequently lament that their invest-
in which it is embedded. Instead, it is collectively
ments in local human capital are negated when held by a unit and its employees.
other firms poach talent in the area. In addition to
Firm level
the direct cost of human capital loss, a firm's compe-
If we expand our perspective to the firm level,
titive potential can also be affected. A new firm's
capacity to acquire local human capital reduces we
thecan recognize that the global talent portfolio
entry barriers to new markets and decreases of thethe MNC comprises various stocks of local
competitive edge of incumbent firms. human capital in different areas of the world. The
degree of variety at the overall portfolio level
represents an important strategic choice for firms,
Unit level since there are clear benefits and costs inherent in
Unit-level local human capital reflects the aggre-
this decision.
gated knowledge and experience that emerge amongOn the one hand, both the resource-based view
individuals as they interact with one another and
andthe knowledge-based view of firms emphasize
with people in the local environment. This collective
the importance of knowledge variation as a founda-
asset can be influenced by both individual- and firm-
tion for organizational learning (Almeida, Song, &
level forms of human capital. For example, MNCs
Grant, 2002). The extent of local human capital in
with strong levels of local human capital embedded
the firm's overall talent portfolio represents numer-
across the organization may push local units topoints of connection with and learning about
ous
better understand their local environment. the different local environments in which the MNC
In fact, while individuals can possess human operates. Similar to Conant and Ashby's notion of
capital, it is often developed collectively - embedded requisite variety, the local human capital represents
within a social network and difficult to disaggregate the complex and varied stocks of knowledge that
back to the individual level. As a socially embedded serve as a catalyst for knowledge generation.
resource, unit-level local human capital may not On the other hand, heterogeneity brings with it
be interchangeable with individual-level human challenges of control and coordination. Firms will
capital (Ployhart & Moliterno, 2011). For example, sometimes make difficult tradeoffs between the
Groysberg, Lee, and Nanda (2008) found that high- degree of heterogeneity and homogeneity they seek
level talent hired by competing firms have struggled at this level. For example, Andersson, Björkman, and
to apply their human capital in a new setting. One Forsgren (2005) found that firms generally use
explanation is that some of their experience is expatriates and other headquarters personnel in key
embedded in a collective unit- or firm-level context positions to maintain more direct control in an
that becomes difficult to transfer from one context international location. This practice may constrain
to the next (Somaya & Williamson, 2008). the local integration of units and individuals
journal of International Business Studies

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727
required for knowledge creation. The challenge for

The upshot is that converting location- and firm-
specific human capital into subsidiary human
firms is to balance the advantages of local autonomy,
capital takes place within the organization's social
differentiation, and heterogeneity against the needs
for control, consistency, and global integration. context, and, as a result, it frequently gathers at the
Hence we propose the following: unit level. Individuals benefit from the process
recursively, because they are better able to blend
PI: Developing local human capital helps a firm
firm and local experiences. However, shared experi-
interact with local clients and governments.
ence is a byproduct of the knowledge-combination
process. Repatriation programs, for example, when
Subsidiary Human Capital done effectively, establish the basis for a shared
At the nexus of location-specific and firm-specificunderstanding that benefits both the firm and the
knowledge, subsidiary human capital represents individuals (Lazarova & Tarique, 2005).
knowledge relevant to the company in a specific
country context. For example, when companiesUnit level
When local knowledge is exchanged and com-
adapt their practices for the needs of a local market,
bined among individuals with firm-specific knowl-
they are creating the basis for generating subsidiary
human capital (cf., Reiche et al., 2009). Such forms
edge, it becomes something that is both unique to
of human capital help to adapt knowledge for the the unit and less transferable to other firms. At the
local environment in ways that both support the same time, if subsidiary knowledge is an important
goals of the firm and provide new insights to drivecomponent to the firm, this higher level of sub-
innovation. sidiary human capital will positively influence the
development of subsidiary human capital at the
Individual level unit level. For example, local sales and marketing
At the individual level, subsidiary human capital is units will improve their market share if they
the personalized combination of firm and local can effectively integrate their knowledge of the
experience. It may be both unstated and stated local client base and government regulations with
because it is developed through an iterative process their knowledge of all the firm's products and
that occurs "bottom-up" as individuals reconcile services.
local knowledge against firm-specific requirements As a result, subsidiary human capital at the unit level
and that occurs "top-down" as individuals adaptis one of the strongest sources of competitive advan-
firm-specific knowledge to their local environment. tage for firms (Foss & Pedersen, 2004). As noted above,
Also, subsidiary human capital does not supplant orthis collective knowledge - or understanding - repre-
replace local human capital. They are qualitativelysents an asset that has been "transformed" and cannot
different, and they coexist as complementary assets. be (fully) divided up again. When firm-specific
This view of subsidiary human capital is in line resources shape collective knowledge - such as prac-
with the work of Reiche et al. (2009), who argue tices, norms, data, and the like - the knowledge
that knowledge from international assignees can becomes further embedded in the unit. Experiences,
be more effectively leveraged when it is developed databases, communities of practice, after-action
through relationships embedded in both their reviews, and so on, are all methods for embedding
home and host countries. In this regard, indivi- subsidiary human capital in the unit. These methods
dual-level subsidiary human capital is influenced highlight the interplay of the individuals' knowledge
by unit and firm levels of firm-specific knowledge, with social relationships, and that interchange
combined with their individual knowledge of the enhances and complements both the human capital
market. The result for individuals is a potentially and organizational assets within the subsidiary.
proprietary asset that provides both competitive
differentiation and local adaptation. From the Firm level
individuals' view, this asset may simultaneously Just as with local human capital, MNCs make strate-
increase their value to the organization and gic decisions about how they manage subsidiary
decrease the likelihood that they will (or can)human capital for the overall talent portfolio. There
transfer their experience to other firms. In this is the question of degree: How much knowledge
sense, subsidiary human capital acts as an isolating
remains unique to the local units? And, therefore,
mechanism for the firm (Hatch & Dyer, 2004), how much heterogeneity is desired in the overall
thereby restricting employee mobility externally. system? Firms may choose to allow some subsidiaries

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/*w An architectural framework for global talent management Shad Morris et al
728
to develop their own talent pools, work methods, whose value transcends any one particular location.
and opportunities for localized cultures, processes,
Despite the connotation of the term "corporate" as
and the like, while placing constraints on other synonymous with "headquarters," we view this type
subsidiaries. These localization strategies potentially
of human capital as that which is collectively shared
within the MNC (cf., Latin, corpus, "united body,
allow for more creativity, customization, and inno-
vation across the firm as a whole, generating new collection"). We not only conceive of corporate
best practices that other units may adopt or adapt to
human capital as a top-down exposition of the firm's
way of doing business, but we also view it as a
solve their own problems or capture opportunities
(cf., Bartlett & Ghoshal, 1989).3 bottom-up derivation of collective knowledge and
However, unlike the situation with local human experience that is applicable to the firm as a whole.
capital, firm-level decisions about subsidiary human When such derivation occurs, there are substantial
capital must consider their human capital's degree of opportunities for economies of scope in which learn-
firm specificity as well. On the one hand, some firm- ing investments from one part of the MNC are
specific human capital may apply exclusively within applicable in another. This opportunity for knowl-
a single subsidiary: for example, experience in adapt- edge transfer also highlights a potential advantage of
ing a firm's unique processes for a particular loca- the MNC as an organizational form - to leverage and
tion. On the other hand, some firm-specific transfer learning more efficiently than the market
knowledge from the subsidiary may transfer to alternative (Almeida et al., 2002).
others in the company as whole. The challenge for
firms in this particular area is that the firm-specific Individual level
aspect of the human capital is inseparable from the Individuals acquire and develop corporate human
location-specific aspect. The translation process that capital from knowledge embedded within social and
needs to occur to make unique knowledge transfer- organizational contexts. In other words, corporate
able globally often dilutes the firm-specific aspect of human capital not only emerges from individual to
the human capital as well. The goal for the MNC in firm levels, but it also flows down from firm to
this context is to maximize local adaptation and individual. Without clear directives, distant subsidi-
global integration. ary employees often struggle to gain corporate
The paradox of integrating these unit-level forms knowledge and often feel conflicted in reconciling
of human capital frequently takes the form of (a) corporate knowledge with local experience.
global policies and (b) local practices. The result is a As individuals rotate across international loca-
set of processes that are customized to a subsidiary tions, they may also develop corporate human capi-
and a market. From resource and knowledge-based tal inferentially because they accumulate experience
perspectives, the extent of subsidiary human capital iteratively and recognize which knowledge sets are
in the firm's overall talent portfolio represents an generalizable to other locations. This type of corpo-
integrated network of semiautonomous units that rate human capital often takes the form of specific
possess knowledge unique to the firm and different guidelines for action rather than policies or proce-
from that of competitors in the local market but dures handed down by executive command. Leader-
adapted so they can maintain their local relevance. ship-development programs within MNCs are often
This combined location and firm specificity makes explicitly designed to achieve this kind of corporate
the special case for the MNC. If all knowledge human capital synthesis (cf., Caligiuri & Lazarova,
elements existed everywhere, the knowledge of a 2001). Rather than dictating protocols top-down,
"local" company and of a "global" company would leadership-rotational programs attempt to develop
be the same (Doz, Santos, & Williamson, 2001). corporate human capital bottom-up. The advantage
Hence we propose the following: for the firm is that the derived corporate human
capital is both informed by local experience and
P2: Developing subsidiary human capital helps
relevant to global concerns. Even though the
to develop products, services, and practices that
uniqueness of location-specific knowledge may be
are unique to both the firm and the countries in
lost, the elements that are generalizable are more
which it operates.
likely to be firm specific.
In other instances, corporate human capital
Corporate Human Capital is developed as individuals contextualize best prac-
Corporate human capital is composed of firm-speci- tice by synthesizing it with knowledge of firm-
fic knowledge, skills, abilities, and other attributesspecific methods. For example, transferable expertise

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An architectural framework for global talent management Shad Morris et al 1
729
customization of knowledge across business units.

(e.g., engineering) may be augmented by the specific
ways the MNC uses the expertise. However, the formation of corporate human capital
also involves reducing variation by generalizing
Unit level those experiences to arrive at a knowledge set that is
Similar to the subsidiary human capital discussed
shared across the firm. In most cases, this process is
earlier, the emergence of corporate human capital
done by contrasting firm-specific experience against
at the unit level occurs in a social context as norms or standard practice.
interdependent individuals exchange their unique
Importantly, the emergence of corporate human
experiences against knowledge base ofcapital
the does
whole.not need to negate or displace subsidiary
or local the
However, unlike subsidiary human capital, human capital. Though managing these
emergence process of corporate humandifferent
capital typesdoesof human capital as a set may be
not need to be restricted to a particular region.
difficult, Inproportions of each may constitute
and the
this case, the unit of shared experiencea strategic
could choice,
also it is important to reinforce the
idea
include global functions, business units, that they are qualitatively distinct and serve
leadership
teams, or other MNC entities. different purposes in the MNC's human capital
Bottom-up, the emergence of corporate human
portfolio.
capital within these units occurs through From a competitive standpoint, the process that
a process
of deriving knowledge from members' cultivates
experiencescorporate human capital at the firm level
that is broadly applicable across the MNC.
providesTop-
the MNC with an asset that both is tested
against knowl-
down, the process occurs by testing espoused the realities of various business units and is
edge from headquarters (frequently informed specificby
to the firm as a whole. The successive itera-
best
practice) against the realities of the units tions
to ascertain
that eventually develop corporate human capi-
which elements are indeed generalizable. tal can strengthen the firm's resolve and confidence
in its knowledge and can lead to an identifying
Ironically, there are times when the headquarters'
espoused knowledge may not meet thefeature of the firm
criteria of as a whole.
corporate human capital. For example, mandated
Hence we propose the following:
policies and "best" practice may not qualify as
P3: Developing corporate human capital helps to
corporate human capital if they are not universally
develop products, services, and practices that are
applicable and valuable. The process of reconcilia-
unique to the firm and applicable to global clients.
tion at the unit level may reinforce the advice from
headquarters or it may negate it. The process typi-
cally leads to adaptation, leading to a more
International
robustHuman Capital
knowledge base. Once again, this highlights the by both human capital and inter-
Often overlooked
national
importance of attending to the social context asbusiness
well scholars, international human
as the cognitive, affective, and structural capital is low
elements ofin both firm specificity and location
relational capital that influence the emergence
specificity
pro- (Almeida, 1996). It can include, for exam-
cess of corporate human capital (Kang,ple, Morris,
knowledge & of global best practices, global indus-
Snell, 2007). try standards, international trade laws, modular
Corporate human capital within these units influ- systems and processes, cross-border industry net-
ences the further development of individual human works, and other transportable forms of experience
capital. At first glance, because corporate human that are applicable across multiple firms and coun-
capital does not necessarily provide information tries. Consequently, it can be acquired externally or
unique to the local environment or the subsidiary, developed internally.
it may appear less distinctive or proprietary. How- Theoretically speaking, we would acknowledge that
ever, corporate knowledge possessed by a collective international human capital provides no sustainable
talent pool can play a vital role in helping units stay advantage to firms because it can be appropriated by
closely integrated with the rest of the company. rivals. However, such arguments are overly simplistic
and inconsistent with reality. Deep international
Firm level business expertise may represent a rare and valuable
At the firm level, the emergence of corporate human asset both within and across global industries and
capital is fundamentally different from local or sub- may be the foundation for distinct advantages in
sidiary human capital. The formation of local and cross-border transactions and collaborations. For
subsidiary human capital involves explicitly increasing example, an individual with international human

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A.
^ An architectural framework for global talent management Shad Morris et al
730
capital can help MNCs to overcome institutional formation of unit-level international human capital
voids (Ricart, Enright, Ghemawat, Hart, & Khanna, can be seen as a valuable resource in being able to
2004) and manage political risk. In fact, Khanna apply and knowledge directly from the external market
Palepu (2000) have shown that even industriestovary existing operations (Winter & Szulanski, 2001).
in performance across countries because of differ- Cosmopolitan expertise embedded within the unit
ences in understanding the international context. can help subsidiaries stay on top of international
standards and trends - something that can be other-
Individual level wise detrimental to units focused only on local and
People can develop international human capital by firm-specific knowledge. In itself, this global market
engaging in meaningful interactions with interna- savvy may help distinguish units within a particular
tional experts and professional associations, closely local market. However, a focus on building unit-level
observing global standards and new technologies, abilities around global standards creates administra-
questioning the relevance of context specificity in tive challenges for subsidiaries trying to fully utilize
knowledge, and identifying with a profession rather employees' collective knowledge that has been gath-
than a company (Cappelli, 2008). Research suggests ered from outside the firm.
that MNCs may inadvertently undervalue - and
underutilize - employees with transportable interna- Firm level
tional human capital (Caligiuri, Phillips, Lazarova, In relation to the entire MNC, this type of interna-
Tarique, & Burgi, 2001). For example, the associated tional human capital may be a vital source of
challenges of repatriation often reflect the fact that competitive advantage, serving as the basis of being
subsidiaries struggle integrating employees with a more globally savvy player. This capability has
cross-border knowledge (Stahl & Caligiuri, 2005). proven valuable to globally effective companies such
Yet such employees are more effective at networking as ABB, P&G, and Nestlé. Like corporate human
across borders, understanding global business opera- capital, international human capital often helps
tions (Caligiuri & Di Santo, 2001), and coming up overcome the issue of resource immobility within
with innovative solutions for the company (Morris the firm and the firm's role in integrating knowledge
&Snell, 2011). from outside the firm.
In fact, most senior managers acquire strong inter- International human capital is a potentially
national human capital because their experience in important source of expertise, to be sure. Nonethe-
different locations, subsidiaries, and contexts gives less, if the development of international human
them an understanding of how things work in order capital is overemphasized at the expense of other
to transcend the organization. The obvious danger forms of human capital, either intentionally or
in developing "international gurus" is that it also unintentionally, the MNC may inadvertently estab-
creates highly mobile executives who may be versa- lish a human capital portfolio that is commoditized
tile in their expertise and thus more valued by other and indistinct. Firms in mature industries (including
firms. These individuals can realistically bring the automobile, steel, pharmaceuticals, and energy) run
market to bear in negotiating compensation terms, this risk by promoting (and allowing) global indus-
retention bonuses, and the like. try standards and creating imitative isomorphism,
The key to retaining these employees is opportu- rather than creating a distinguishable position. The
nities for upward mobility or for more responsibility commodity-like elements in their strategies become
and influence; however, those opportunities have reflected in their human capital portfolio; thus, the
terminal limits at executive levels. The challenge for strategic advantage in those cases can shift toward
firms, then, is to create opportunities for these processes and technologies, rather than people.
individuals to do interesting - perhaps even proprie- Hence we propose the following:
tary or individualized - work, which shifts the
P4: Developing international human capital
balance of their personal human capital portfolio
helps the MNC to stay on top of global best
toward firm-specific knowledge relative to their cos-
practices.
mopolitan knowledge (Lepak & Snell, 1999).
In summary, we note in our premise that the talent
Unit level portfolio of any MNC includes all four types of
At the unit level, international human capital is human capital (local, subsidiary, corporate, and
formed as individuals exchange their different international) in some proportion. The development
knowledge and networks across a global setting. The of each form of human capital at the individual,

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731
unit, and firm levels does not just come as people

develop a more collective form of human capital
begin to embed their individual knowledge in (Dyera & Nobeoka, 2000). Of course, these options are
social and organizational context; human capital not mutually exclusive, and firms increasingly invest
development is also iterative as individual knowl-
in all levels of human capital development.
edge is simultaneously transformed by the social and What may be implicit in this discussion is that the
organizational context as well. While developing form of the human capital architecture has direct
each type of human capital is potentially valuable parallels to the resource-based view of competitive
advantage. Specifically, decisions about the types of
for the firm, the challenge in trying to create compe-
titive advantage is how to manage the firm's talent human capital and levels of aggregation shape the
pools in a way that will maximize the strategic configuration of resources available to the MNC to
benefits that derive from integrating and emphasiz-establish the basis for advantage relative to rivals.
ing the different types (Wright & McMahan, 1992). Different resource configurations provide different
In this regard, each type of human capital may
advantages to the MNC (e.g., local vs global). While
provide strategic growth opportunities for the firm; there may be many viable design options, if firms are
however, it is when these different types of humannot explicit about the form of their global talent
architecture, their human capital portfolio may
capital are effectively integrated that firms are able to
achieve competitive advantage. develop inconsistently. Further, in many instances,
without explicit attention to this architecture, the
DEVELOPING AN ARCHITECTURAL MNC may not have a clear indication of the sub-
PERSPECTIVE stance of its human capital portfolio and therefore
The four types of human capital and the three be unable to leverage the expertise that actually
levels
at which they are developed lay the foundationexists
of awithin the firm.
The form of the human capital architecture
firm's global talent architecture. There is a natural
tension among the four types of human capital;directly
the and crucially influences the way that it
development processes are generally opposing functions
and - the manner in which knowledge is
involve tradeoffs for managers who must decide generated, transferred, and integrated within the
where to focus their knowledge integration efforts.enterprise. In general, human capital architectures
Firms often make explicit decisions about both withthemore variety and heterogeneity are more likely
to generate
form of this architecture as well as the fonction that it new knowledge from multiple points
serves in generating and integrating knowledge internally and externally within the environment.
within the enterprise. In terms of form, MNCs Conversely,
vary human capital architectures with more
dramatically in the proportion of each type of
consistency and collective aggregation are more
human capital relative to the others in their portfo-
likely to transfer and integrate knowledge, embed-
lios. For example, some firms emphasize the dingdevel-
it within the existing asset base of the MNC.
opment of local and subsidiary knowledge among As will be discussed in detail in the following
their employees and deemphasize employees' pages,degree effectively developing and integrating differ-
of corporate or international knowledge. Otherent firms
forms of human capital based on a firm's inter-
establish just the opposite attitude, preferring a
national strategy allows the MNC to achieve
talent portfolio that is weighted toward common competitive advantage (Kogut & Zander, 1992;
corporate and international expertise. Still Smith,
others Collins, & Clark, 2005). Different strategies
work to strike a balance of all four types in order to different forms of knowledge and different
require
link the expertise at particular locations to aknowledge
firm- flows. Different strategies also create
wide knowledge base. While differences may valuebein different ways. We examine three generic
most pronounced by industry, differences strategies
exist of the MNC - multidomestic, megana-
among individual firms as well. tional, and transnational - and the strategic value
In addition to decisions about the proportion that of
comes from developing and integrating differ-
each type of human capital, firms also differ in ent forms of human capital. We also examine how
terms
of their emphasis on levels of aggregation. theFor
different forms of human capital can be devel-
example, many firms approach human capital devel-oped and integrated across multiple levels through
opment as an individual-level phenomenon HRandmanagement. At the individual level, we focus
focus on developing employees who possess unique on the specific HR practices for individual talent. At
skills or show the highest potential for performance.
the unit level, we focus on the entire pool of talent
Other firms emphasize sharing knowledge to the unit. And at the firm level, the focus is on
within

194.145.103.190 on Thu, 02 May 2024 15:08:59 +00:00
**
732
the HR orientation of the MNC (Taylor, Beechler,

Local
& human capital in each of the disparate locations
Napier, 1996). The role of HR management is impor-
of the MNC is essential for generating opportunities,
tant at all of these levels because it shapesandthe
subsidiary human capital helps situate that local
combinative capabilities within the organization
knowledge within a firm-specific context. Since the
(Lengnick-Hall & Lengnick-Hall, 2006). various subsidiaries are given discretion to operate
independently, adopting a multidomestic strategy
nurtures considerable variety within the human
Human Capital and the Multidomestic Strategy
capital portfolio that may be a source of new value
A multidomestic strategy emphasizes the autonomy
creation.
of regional businesses to operate independently in
responding to local opportunities and challenges
(Bartlett & Ghoshal, 1989). This strategy involves
Valuea creation by integrating local and subsidiary
management structure that gives a great deal of capital
human
discretion to local subsidiaries without much inter-
The value created by integrating local and subsidiary
vention from headquarters or operational coordina-
human capital involves combining different ele-
ments to increase how customers value using a
tion across units. Firms engaged in a multidomestic
strategy are most likely to generate a competitive
particular product or service (Lepak, Smith, &
advantage when they adapt rapidly to arising cir-Taylor, 2007). Knowledge of the customer base in a
cumstances in various regions and customize pro- particular market may be potentially valuable, but it
ducts and services for local clients. is admittedly a local knowledge set that does not
In terms of the human capital architecture, thetransfer well. However, if that local knowledge is
multidomestic strategy requires MNCs to develop complemented by knowledge of the firm's products
capabilities that allow them to generate, combine,
and services - particularly how those meet the
and integrate local human capital with subsidiaryclients' needs - the combination of those two sets
human capital, with comparatively less emphasis onof knowledge is both more valuable for and more
corporate and international knowledge (see Figure specific
2). to the firm. One way to get employees to
High
CORPORATE //
-
' SUBSIDIARY
* / '& - *
/// ««i
3. Lower emhasis on corporate HC. and // /ilil2.É High investment in subsidiary HC to embed
integration across the firm. Corporate HC may be / firm-specific knowledge in local regional context,
limited to overall philosophy and shared values / Autonomy of business units allows discretion for
(culture). x / local responsiveness. Customization at local level
' / / is a source of resource-based advantage.
'/ Heterogeneity across the HC protfolio is a source
j ' y of protential innovation
Low 4 1
I '/
4-1 ^ ¡J. .
' / ' Location-Specifigrty
V ' / ' "••••• Location-Specifigrty '

'
4. Minimal investment in international HC ' 1 . Moderate investment in local HC as a catalyst
beyond foundational standard of best practice. ' for knowledge generation. Localized knowledge
' helps contextualize subsidiary responsiveness.
INTERNATIONAL LOCAL
Figure 2 Multidomestic strategy.

194.145.103.190 on Thu, 02 May 2024 15:08:59 +00:00
733
integrate these two types of human capital is helping

To ensure strong local knowledge is present, current
employees understand the importance of providing research suggests employees and managers for each
for clients' needs as well as finding new ways to subsidiary should be host country nationals (Heenan
address clients' unmet needs. & Perlmutter, 1979). Local employees should also be
By continually integrating local with subsidiary trained locally to ensure they develop a unique
human capital, we suggest that the firm will be ableknowledge of the subsidiary that they can filter
to increase the value of services and products pro- through their existing local knowledge. Unfortu-
vided in the local market (Helfat, 1994). In fact, this
nately, employing only host country nationals does
is where we see the codependence of subsidiary not and allow for a more strongly integrated subsidiary
local knowledge. Local human capital is used to helpculture that is unique to the local context; rather,
make economic, cultural, legal, and social connec- this staffing approach may make the subsidiary too
tions with local clients, and it helps increase the similar to other local competitors, lacking the dis-
appropriateness of a product or service. Yet such tinctiveness of being a subsidiary of a foreign MNC.
capabilities are not sufficient for a multidomestic In addition, hiring only host country nationals
strategy. Subsidiary human capital must also be limits the talent pool from which the company is
combined with local human capital to render appro-
drawing, as most of the employees in this situation
priate and novel products or services (Lepak, will never reach the corporate level (Caligiuri &
Takeuchi, & Snell, 2003). The mechanism driving Stroh, 1995).
value comes as employees apply a deep-rooted Instead, firms should focus on staffing local units
understanding of the customer with a deep-rooted with a mix of parent country nationals, third-
understanding of the subsidiary products and ser- country nationals, and host country nationals and
vices. When employees have this combined knowl- provide development that allows them to learn
edge, they are able to see what changes need tofrombe one another and develop a subsidiary culture
made to the existing products to meet unique local
that is not only unique to the firm but also unique
needs. This form of knowledge integration providesto the local context. These talent-management
a primary mechanism for organizational learning practices may focus on identifying and empowering
and innovation that helps to improve a firm's value
employees to act on problems or opportunities that
proposition (Kogut & Zander, 1992; Smith et al., arise in situ in order to establish the foundation for
2005). organizational learning (Guthrie, 2001). Outcome-
More important, because knowledge integration isrelated incentives may also institutionalize a
focused on the local and subsidiary context, the culture that emphasizes "creative abrasion" by
encouraging subsidiary employees to constantly
different forms of human capital will be most effec-
tive at the individual and unit levels. Integration
be thinking of ways to link contextually different
across units to the firm as a whole is much less ideas from the local environment and employee
prevalent. These points reinforce the knowledge- performance (Caligiuri et al., 2004).4 In essence,
employees must be willing to make idiosyncratic
based perspective on the role of firms in integrating
different knowledge elements. Much of the strategyknowledge investments that strongly develop their
literature tends to assume that knowledge will skills for
be the local context.
automatically integrated within the firm. Unfortu- Of course, as noted previously, these talent-man-
nately, the inherent nature of the firm does not practices must also focus on the retention
agement
ensure value creation through integration; of rather,
valued employees whose human capital is locally
integration comes through proper coordination contextualized.
of For example, Newburry (2001)
employees and their human capital portfolios. foundAs that
a some degree of subunit interdependence
result, firms that adopt a multidomestic strategy with the rest of the corporation helped local employ-
should focus on HR systems that encourage employees perceive that their role in the subunit was less
tenuous and more valuable to the firm. Therefore
ees to integrate local human capital with subsidiary
human capital at the local and subsidiary levels, managing
with employees' perceptions regarding their
an overarching support structure from the MNC individual
as a roles within the larger MNC may be
whole. important to employee retention. Law, Song,
Wong, and Chen (2009) demonstrated that one
Individual-level HR way to increase local employee loyalty to the foreign
An individual approach to integrating local and subsidiary is for corporate headquarters to share
subsidiary human capital may begin with staffing. more resources with the subsidiary and to allow

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734
more autonomy in how the employees use those

but rather on integrating knowledge within the
resources. regional contexts (Myloni, Harzing, & Mirza, 2004).
From a firm-level perspective, the HR function
Unit-level HR appears as a loose confederation of diverse operating
Much of the responsibility for talent management
units with a weak central network. This configura-
and human capital development in the multidomes-
tion allows separate business units to develop talent
tic firm rests at the unit level, and the core of without
as necessary HR much intervention from head-
quarters.
investment often occurs there. Because Perlmutter (1969) referred to this as a
subsidiary
HR units are often given autonomy to "polycentric"
customize or approach to management. In this
approach,
experiment with current practices as wellthere is an independent relationship
as to
develop new practices as a foundationbetween
for learning,
headquarter managers and subsidiary man-
they must develop "local creation"agers, capabilities
although this is more typical of an MNC with
long-established
(Morris & Snell, 2011) that help them integrate localsubsidiaries. Taylor et al. (1996)
and subsidiary knowledge. Developing these
refer to the cap-
corresponding HR orientation as "adap-
tive" each
abilities requires the HR functions within in nature,
sub-in that the policies set by head-
unit to create their own portfolioquarters
of external
allows subsidiaries to make necessary
networks in order to adapt practicesadaptations to meet to their HR practices and that those
local
circumstances. For example, Stahl et al. (2012) units are managed based on the achievement of pre-
argued that local HR systems should adopt hiring established outcomes or standards. Control theory
practices consistent with local environments. Doing (cf., Ouchi & Maguire, 1975) suggests that organiza-
so allows the MNC to develop talent pools with tional complexity and change tend to dimensiona-
sufficient diversity to help the MNC adapt to chan- lize the cause-effect connections that allow for close
ging environments. Hence we argue that effectivelyheadquarter scrutiny. As an alternative, firms may
implemented output-based HR systems will be effi- accord more discretion to subunits, holding them
cient in helping subsidiaries generate knowledge accountable for results. Importantly, while HR sys-
from the local contexts (Turner & Makhija, 2006). tems differ across operating units, the general philo-
In addition to generating local and subsidiary sophy around HR may not; the headquarters'
knowledge, HR units in a multidomestic firm also function likely plays a significant role in establishing
play a significant role in helping to collect, combine, a common set of values and ethical standards. In
and integrate that knowledge at the unit level. these instances, clan or cultural control replaces
Although significant aggregation to the firm and bureaucratic solutions at the firm level (Ouchi,
corporate level is unlikely, integration at the unit 1977).
level depends on HR practices that engender colla-
P5: Firms with a multidomestic strategy will
boration, particularly of market-related factors
compete more effectively by building a talent
(Zellmer-Bruhn & Gibson, 2006).
portfolio that improves its capabilities to generate
Firm-level HR
and integrate local and subsidiary human capital
to not only help the firm interact with local clients
At a more macro firm level, managing the human
and governments but also to offer unique solu-
capital architecture under a multidomestic stra-
tions to local problems.
tegy requires a corporate governance structure that
enables decentralized decision-making and flexibil-
ity in accommodating change. The firm-level HR Human Capital and the Meganational Strategy
function has a significant role to play in helping In contrast to multidomestic strategy, a megana-
various business units develop their human capital tional strategy emphasizes coordination and integra-
base. tion across business units to provide a common
In regard to multidomestic strategy, HR systems platform for the MNC (see Figure 3). Its governance
will likely vary more across subsidiaries (Sparrow,structure is more central and formal to ensure con-
Brewster, & Harris, 2004). In fact, recent researchsistent standards, processes, products, and services
suggests that nationally established patterns of across business units (Bartlett & Ghoshal, 1989).
managing subsidiaries have not disappeared in theThis strategy tends to establish the firm's competi-
face of globalization (Ngo, Loi, & Foley, 2012). Intive position in unified markets, where advantage
these firms, talent-management approaches may notdepends on leveraging economies of scale and scope
focus on integrating knowledge across all borders, to achieve lower costs and global reach.

194.145.103.190 on Thu, 02 May 2024 15:08:59 +00:00
735
High
CORPORATE ^ SUBSIDIARY
V o *
®
3. High investment in corporate HC to achieve 2- Lower investment in subsidiary HC to regional

shared global best practice. Centralized HQ § context- Possible exchanges across business units
decision making to ensure standardization. Ll provides lateral integration
Consistency leads to scale economies as a
resource-based advantage. Integration ensures
shared learning. '
LOW g », , » High
y ' Loacation-Specificity
4. Moderate investment in international HC to 1. Minimal investment in local HC beyond tactical

help contextualize firm-specific HC relative to reponse to requirement of region (legal,
standards of industry best practice. political, cultural).
*
INTERNATIONAL LOCAL
LOW
Figure 3 Meganational strategy.
From the standpoint of the human capital archi- The primary value created by integrating interna-
tional and corporate human capital is that it is a
tecture, employee expertise and experience in inter-
national human capital provides the foundation for
source of best practice that can be applied wholesale.
However, there is a secondary effect when these two
established best practice and global savvy, and com-
human capital forms combine - the continual real-
bining the international human capital with corpo-
rate human capital helps contextualize that location of resources to more productive combina-
knowledge in a way that reinforces a unified, yet tions for use in a global context (Collins & Smith,
firm-specific expertise. The primary difference 2006). It reprioritizes the resources that are available
between multidomestic and meganational strategiesfor individual employees to combine with their
rests most notably on differences in levels of loca-existing knowledge. In other words, for human
tion specificity rather than differences in firm speci-capital to be combined with other firm resources,
ficity - which runs counter to much of the strategy that knowledge needs to first be moved within reach
research on firm-specific advantages. of the individuals and units combining it. Toyota's
production system (cf., Dyer & Hatch, 2006), for
Value creation by integrating corporate and interna- example, is a good illustration of this approach to
tional human capital human capital combination. The architecture in this
The value created by integrating international with case facilitates knowledge generation, transfer, and
corporate human capital involves being able to integration from all parts of the firm relevant to the
effectively leverage products and services for global MNC as a whole. At the extreme, this approach
clients (Cantwell, 2009). Knowledge about interna- could limit the discretion of individual units in
tional standards, trade laws, and cultures can be developing talent uniquely for their particular local
potentially valuable in a firm's internationalization and subsidiary contexts. However, developing local
efforts, but it is admittedly a very general knowledge and subsidiary human capital under this strategy is
set. However, if international knowledge is comple- necessary for tactical or administrative reasons
mented with knowledge that is specific to the corpo- (given the economic, political, and cultural realities
rate operations and vision, this integrated human of local environments), rather than desirable from a
capital is valuable in being able to provide efficientstrategic point of view.
products and services that are not only unique to the For instance, research on call centers has shown
company but at the forefront of the company's that local employees are not necessarily hired for
industry. their strong knowledge and skills related to the local

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Ajć.
^ An^ architectural framework for global talent management Shad Morris et al
736
For example, General Electric (GE) is known for a

environment. Rather, what creates strategic growth
process-based HR orientation that encourages
opportunities for these employees is their interna-
tional human capital (e.g., accent neutralization,employees to integrate cutting-edge international
customer service skills, and problem-solvingknowledge
abil- and apply it to the global operations of
ities). When companies adopt a meganational strat-each division. This approach means that many GE
egy, it is the combination of this international managers possess high levels of international
human capital with corporate human capitalhuman (e.g., capital and, as a result, are poached by rival
knowledge of the firm's global products, culture, firms
and (Groysberg, McLean, & Nohria, 2006). At the
customer service values) that allows them to same createtime, however, it also means that GE usually
value unique to their firms that is difficult for creates
other a competitive advantage that other firms
firms to imitate. Hence HR practices for a megana-cannot imitate because the knowledge possessed by
tional strategy will differ from those for a multi-
its employees is contextually embedded within both
domestic strategy. the international and corporate contexts.
Individual-level HR Unit-level HR
Firms adopting a meganational strategy have tradi- Efforts to globalize talent development imply HR
tionally focused on staffing their foreign units with practices at the unit level that are highly influenced
expatriates in key management positions (Shaffer, if not directly controlled by headquarters (Taylor et
Kraimer, Chen, & Bolino, 2012). Such an approach al., 1996). In order to assure alignment and reinforce
allows for greater control of decision-making and a the development of corporate human capital, MNCs
more standardized approach to work (Kobrin, are likely to implement process-based HR systems
1988), since expatriates are expected to standar- that stipulate priorities, procedures, communica-
dize work and socialize host country nationals to a tion, and investments among business units
common culture. However, scholars have shown (Kidger, 2002). Process-based systems help minimize
that, given the nature of the socialization process, divergence among highly dispersed subunits, which
expatriates are usually less effective at promoting a is important for both achieving economies of scale
meganational strategy (Lee & Larwood, 1983). In and reducing performance variance within the HR
fact, research suggest that such staffing practices system as a whole.
make it less likely that the firm will be able to find However, the development of corporate human
top talent from the global market (Caligiuri & capital, supported by international human capital,
Stroh, 1995). may hinder the integration of more locally relevant
To overcome issues related to relying on expatri- knowledge. Furthermore, Andersson et al. (2005)
ates, a process-based HR orientation that focuses on have noted that process-based systems tend to
helping local employees stay close to corporate and decrease the connectedness of subsidiary units to
international standards may increase the employees' local contacts outside the firm. This might decrease
ability to integrate ideas across borders both inside the development of local or subsidiary human capi-
and outside of the company. Unfortunately, one of tal, but it is also likely to place constraints on the
the concerns about such policies is that by integrat- development of relevant international human capi-
ing knowledge of the international context with the tal. And while this may be so, the role of the unit in
corporate operations, employees become more an MNC following a meganational strategy is to
strongly rooted to their professions rather than to cultivate relationships that generate globally rele-
their employing firms (Cappelli, 2008). And if the vant knowledge and best practice. The subsidiaries
corporate policies are invariant or limit discretion, have an important role in implementing best prac-
individuals may develop unsanctioned "work- tice, as well as identifying and sharing global best
arounds" to achieve desired ends. As Feldman practice that may have applicability to the entire
(2000) has pointed out, professional loyaltyfirm. is often
a much stronger force among top talent than Business
com- units concerned about minimizing devia-
pensation or commitment to a foreign firm. tions from
In the mandated processes may be influ-
enced
addition, HR practices for individual managers, to maintain a narrow reach to local contacts
such
thatcon-
as performance appraisals and compensation are readily available. Since they will not be
rewarded for moving beyond a standardized
tingent on the transfer of knowledge, may provide
approach, they are likely to deem the combination
individualized solutions to integration (Björkman,
Barner-Rasmussen, & Li, 2004). of knowledge from local contexts as less critical or

194.145.103.190 on Thu, 02 May 2024 15:08:59 +00:00
737
valuable (Nebus, 2006). The process orientation generating international human capital that is
encourages such behavior without allowing units to simultaneously specific to the MNC.
explore one-off relationships that might disrupt
P6: Firms with a meganational strategy will com-
their standardized, but unique, corporate approach
pete more effectively by building a talent portfolio
to offering value. In this regard, employees are able
that improves its capabilities to generate and
to combine international knowledge with corporate
integrate international and corporate human capi-
knowledge in a way that keeps the knowledge
tal to not only help the firm maintain global
globally standardized and central to the MNC.
practices but also ensure those practices are unique
to the firm.
Firm-level HR
At the firm level, the HR governance structure
reflects a centralized, tightly linked network of Human Capital and the Transnational Strategy
dependent units that operate in step with one The transnational strategy is often considered a
another (cf., Taylor et al., 1996). Headquarters' direc- hybrid strategy that combines the benefits of mega-
tives may place a premium on consistency across national and multidomestic strategies. Rather than
subunits, and, to a large extent, this would represent viewing a transnational strategy as a compromise
the firm-specific adaptation and improvements on between global and local, this strategy achieves
best practice. If the new knowledge is generated simultaneous local responsiveness and global inte-
within the HR network itself, it will most likely take gration. MNCs that successfully pursue a transna-
the form of deeper refinement, synthesis, and tional strategy tend to adopt a governance structure
improvement of firm-level best HR practices (Morris that is both flexible and tightly integrated (see Figure
et al., 2009). 4). Like the multidomestic approach, the transna-
This knowledge form serves two purposes with tional strategy allows subsidiary discretion and
regard to the global talent architecture. First, centra- autonomy to adapt and customize locally. However,
lized HR has the effect of creating synchronized unlike a meganational strategy that achieves integra-
talent development across the entire firm. For exam- tion through centralization and standardization by
ple, leadership development, succession planning, headquarters, the transnational achieves integration
rotational assignments, and expatriation programs through close lateral coordination and a knowledge
will likely be coordinated, if not administered exchange that drives organizational learning among
directly, by headquarters personnel. As a result, subsidiaries (Morris, Hammond, & Snell, 2014).
human capital development takes on the character- The prerequisite for this strategic capability is a
istics of the corporate entity rather than only a human capital architecture that supports continual
smaller set of subsidiary experiences. Performanceknowledge flows, both internal and external, that
management and rewards systems, too, emphasize a allow for local adaptation and global integration
firm-wide corporate orientation, further pointing (Bartlett & Ghoshal, 1989; Kostova, 1999). To
employees toward the unique considerations of the achieve this capability, emphasis should be placed
MNC as a whole. on all four types of human capital: local, subsidiary,
Second, this global approach enables knowledge corporate, and international - albeit in different
sharing and organizational learning top-down, fromproportions. The combination of subsidiary and
the headquarters to the subsidiaries. To a lesser corporate human capital is most critical to the
extent, it may facilitate the efforts of business units
transnational strategy, as these two types are firm
to share best practice laterally with one another.specific.
If However, their combination is both
the incentives allow, a global HR system can provide
informed and contextualized by local human capital
business units with a common framework and (e.g.,
international human capital.
processes, systems, practices, terminology) for com-
paring, exchanging, and refining best practice with
Value creation by integrating all forms of human
one another. Perhaps less likely is a bottom-up capital
learning process where headquarters personnel learn
Local human capital provides the richness of experi-
from and synthesize knowledge from the business ence that augments the development of subsidiary
units (cf., Brown & Duguid, 2001). Althoughhuman the capital; it also increases heterogeneity in the
bottom-up and lateral approaches to knowledge overall firm portfolio that stimulates innovation.
sharing may be more difficult to achieve thanInternational
top- human capital, on the other hand,
down learning, they are the most viable for contextualizes the development of corporate human

194.145.103.190 on Thu, 02 May 2024 15:08:59 +00:00
738
High
CORPORATE / ' SUBSIDIARY

/ Ä *
3. High investment in generating corporate HC / C ' 2. High invest
through lateral exchange (rather than HQ / ' specific knowled
mandate). Shared knowledge a source of global / ' business units
best practice, informed by subsidiary and / ' Heterogeneity ac
international HC. Simultaneous global/local » / ^ ^ ' ,1irm-wide
adaptation is source of advantage. ^ ^ v Oř'
LOW ^
/'Jv Oř'
'Jķ
' High
' / ļ Location-Specific^
X ^
1 . Moderate investment in international HC to
contextualize firm-specific HC relative to '
standards of global best practice. ' / ' c
INTERNATIONAL LOCAL
Low
Figure 4 Transnational strategy.
In effect, new ideas from local workforce subunits

capital in relation to standards of practice that estab-
lish parity with rival firms. However, the bulk
can
ofact as sources of creativity, best practice, and
global solutions that create value for clients
value comes by integrating subsidiary with corporate
human capital. Though both forms may seem (Birkinshaw, 1997; Cantwell & Mudambi, 2005).
almost antithetical to one another, the global-local The primary value created by integrating local and
tension inherent in the transnational model tends to subsidiary human capital with international and
be reconciled through a form of organizationalcorporate human capital is that it becomes a source
ambidexterity that simultaneously achieves align- of new innovations that can be applied wholesale.
ment and adaptability (Gibson & Birkinshaw, 2004; However, there is a secondary effect: such human
Kang & Snell, 2009). capital combinations can be a valuable capability in
Take, for instance, the case of Briggs & Stratton. overcoming the immobility of location-specific
Employees in their China operations developed new knowledge, allowing the firm to leverage the value
products for the US-designed engines that were across locations. The challenge for firms in this
smaller, less bulky, and more in line with localcontext is to move beyond merely sharing or trans-
customers' tastes (Washburn & Hunsaker, 2011). ferring knowledge and to make certain that this
While these new products were specifically designed knowledge is actually integrated to create more value
for China, other employees were able to leverage the for customers, thus potentially creating specific
concepts and ideas behind these innovations in value in each location (Almeida et al., 2002; Winter
order to apply them across the entire organization. Sc Szulanski, 2001). To understand how this integra-
Because the Chinese employees were able to com- tion might occur, we explore a unique set of coordi-
bine their knowledge of the local market with nation and control mechanisms that might be
knowledge specific to Briggs & Stratton, they were unique to a transnational approach.
able to create new value for the Chinese subsidiary.
In addition, because this knowledge was exchanged Individual-level HR
across borders, it acted as a catalyst for new value At the individual level, the transnational MNC may
creation for the entire company. develop employees whose human capital reflects the

194.145.103.190 on Thu, 02 May 2024 15:08:59 +00:00
739
ambidexterity of global and local experience. In the subsidiaries, helping to further reconcile
within
many instances, employees focus on local and shared
sub- experiences against corporate policies. While
sidiary human capital, without much emphasis human
on capital development may not be identical
across those different units within the MNC, the
corporate-wide integration. This may be sufficient
for their individual purposes and contributions to
similarities are sufficiently recognizable to facilitate
the MNC. Other employees, however, such asexchange
those and synthesis of subsidiary human capital
in senior positions or those closer to the strategic
with corporate human capital. The requirements of
core of the firm, develop a more corporate and
both coordination flexibility as well as resource
international orientation. flexibility apply here. When subunits develop
The challenge for the transnational is to build human capital that has a common connection with
requisite variety into its human capital portfoliopolicies
to or principles shared across the MNC, the
knowledge developed by employees is more easily
address local differences while also ensuring connec-
adapted to other locations - known as resource
tivity within their portfolio guarantees global inte-
gration. But comparatively fewer individuals flexibility. Similarly, if subunits establish a norm of
sharing
completely embody this duality, and the reality of and exchanging with other locations, then
most business units is that employees develop in
coordination flexibility is more likely as well. The
different ways, for different purposes. In this case,
combination of resource flexibility and coordination
MNCs should staff positions worldwide so thatflexibility
the leads the subunits to easily integrate local
best people are recruited for positions regardlessand
of international human capital development.
their nationality (Heenan & Perlmutter, 1979).
Firm-level
In those cases where key individuals are chal- HR
lenged with developing a human capital profile that
At the firm level, the HR governance structure of a
mirrors the characteristics of a transnational, they
transnational strategy comprises a heterogeneous set
work to simultaneously establish external ties of subsidiaries that develop human capital within
that
connect them to the region, as well as internaltheir ties local contexts much the way a multidomestic
that connect them to the MNC. Theirs is the chal- strategy does. The firm supports this decentralized
lenge of contextual ambidexterity (Gibson & approach to ensure local responsiveness. This
Birkinshaw, 2004), working to reconcile for them-approach also serves as a source of firm-wide novelty
selves, as well as for others, how their particularand variation that leads to innovation. And just like
circumstances can be combined with a universal the multidomestic model, HR systems within the
knowledge of the MNC as a whole. This contextual transnational model tend to differ more across sub-
ambidexterity can be gained through strategicsidiaries,
socia- reflecting local adaptation (Rosenzweig &
lization processes that emphasize both national Nohria,
and 1994).
However, unlike the multidomestic model, there
corporate culture as valuable sources of knowledge.
are significant reasons why initial variation across
Unit-level HR units trend toward uniformity within the MNC over
To understand how firms might balance this global-
time. Scholars have pointed out that a transnational
local tension requires a more micro examination at requires local knowledge resources to be
orientation
the unit level. The transnational MNC provides
acquired, compiled, exchanged, and transformed in
autonomy to the units, giving them freedom orderto
to promote new firm-specific ways of working;
adapt to local conditions while still holding
allthem
of this must then be synthesized and refined
across subsidiaries to the MNC as a whole. As the
accountable for sharing and integrating knowledge
globally. In many cases, headquarters providesfirm-specific
broad subsidiary human capital is shared and
each subsequent subsidiary adopts or adapts that
HR policy directives or processes that are consistent
across the MNC but demonstrate enough resource knowledge to its own purposes, the mutual-learning
flexibility to be adapted for local practice. Thisderives a set of general principles (or perhaps
process
approach provides the units latitude to developbest practices) from a bottom-up approach. The net
human capital locally while still providing theresult
inter-is a "decentralized centralization" that conti-
nal consistency necessary for global integration.
nually generates knowledge informed by the multi-
Therefore subunits in transnational MNCs will ple contexts while also providing consistencies that
engage locally, building external networks
are for
firm specific.
knowledge generation and customization. They can
The key challenge for the transnational firm is to
then aggregate and combine the human capital
facilitate the sharing and integration of this human

194.145.103.190 on Thu, 02 May 2024 15:08:59 +00:00
ł An architectural framework for global talent management Shad Morris et al
740
capital without resorting to headquarter mandates. DISCUSSION

Indeed, Fey and Furu (2008) found that, counter to
Adopting an architectural perspective helps us view
both the form and function of an MNC's human
traditional research, providing subsidiary autonomy
does not necessarily reduce coordination and capital
inte- portfolio. In fact, viewing human capital as
gration among subsidiaries. If facilitated appropri-
part of a firm's knowledge assets helps us pay closer
ately, autonomy can allow for a good deal attention
of to how human capital is effectively inte-
knowledge sharing. The role of headquarters grated
is to based on a firm's international strategy
orientation.
enable this, encouraging and facilitating exchange
rather than imposing it centrally. Human capital Indeed, knowledge-based views recognize hetero-
integration, in this context, enhances the position
geneity of knowledge elements as the foundation of
of the MNC by drawing upon and mutually (butall notcompetitive advantage. This view has tended to
hierarchically) integrating unique ideas from remain
other atheoretical in regard to explaining the func-
units (Harzing, 2000). tion of these knowledge forms because it attributes
Because of the paradoxical nature of transnational
the source of new knowledge to unexpected changes
(Rumelt, 1984), luck, and foresight (Barney, 1986).
strategies, requisite HR systems frequently reflect prac-
tices that allow for greater resource and coordinationOur purpose was to provide a contextually relevant
flexibility. Resource flexibility refers to the extenttheoretical
to approach to competitive advantage in
which HR practices or employees themselvesthe areMNC by describing the development of different
adaptive to a larger range of alternative contexts.typesSome of knowledge sources within a firm's talent
HR practices - and indeed some employees - are portfolio
for a and then examining how these different
special purpose and are valuable in a fairly narrow types of knowledge might be integrated.
range of contexts. Other practices are more malleable Lepak and Snell (1999) and Kang et al. (2007) have
and can adapt more readily. Related to this, coordina-pointed out how different forms of human capital
might provide different sources of value for the firm
tion flexibility refers to the firm's ability to reconfigure
its portfolio of resources and redeploy them rapidly and how
to these different forms of human capital can
alternative purposes (cf., Kalleberg, 2001). This may be integrated to explore a firm's knowledge. Our
include both physical and virtual redeployment of builds on this research by, first, examining
article
human capital. For example, firms may establish how the global context might change our traditional
knowledge exchanges across countries, either by trans-views of human capital and its value proposition.
ferring employees, sharing knowledge through Counter social to Lepak and Snell (1999), we point out
networks, sharing through portals and information that, in a global context, organizations often find
systems, or replicating through documented processes strategic value from employees who possess forms of
and best practices (Dyer & Singh, 1998). human capital that go beyond the firm-specific level.
Both resource and coordination flexibility help We theexamined these forms of human capital by
transnational firm build an HR organizationjuxtaposing that the firm and market contexts, moving
enables continual learning and has the capacity
awaytofrom resource-based notions of uniqueness
and value as primary factors driving human capital
leverage that learning globally. From the MNC per-
decisions. Second, we explored how these different
spective, ensuring consistency in the midst of varia-
tion requires adopting an overarching, globallyforms of human capital might be integrated to create
flexible HR orientation. Such an orientation
unique forms of value for the firm. While myriad
combinations
encourages employees to span their learning across of human capital are likely to create
country and company contexts but also tounique sources of value, we limit our discussion of
stay close
and interested in building knowledge that combinations
is consis- to those most relevant to interna-
tional strategies
tent across the firm. (Figure 5 lays out a simple way used by MNCs. Future research
to examine the different HR responses to might explore different human capital combina-
these three
strategies). tions and their potential to create unique value for
the firm.
P7: Firms with a transnational strategy will com- The presented architecture suggests that it is not
pete more effectively by building a talent portfolio the internalization of different types of human
that improves its capabilities to generate and capital that lies at the heart of competitive advan-
integrate subsidiary and corporate human capital tage. Rather, MNCs create competitive advantage by
to help the firm learn from its subsidiaries and developing different contextually embedded forms
leverage them across the corporation. of human capital at the individual, unit, and firm

194.145.103.190 on Thu, 02 May 2024 15:08:59 +00:00
741
Mign
Meganational HR / ' Multidomestic HR
X HR structure that is tightly / / / ' ' '

Firm level HR: Governance structure that is tightly / ' Firm levei HR: Governance structure that enables
linked. HQ developed directives and processes, / ' decentralized decision making, independent action
synchronized talent development. / ' across units , small role for HQ
Unit level HR: Practices highly influenced by HQ, Unit level HR: Adapt practices to meet local
Process-based incentives to specify the need for circumstances
integration and standardization. Individual level HR: Empower employees to make
Individual level HR: Ensuring employees stay N , decision, reward based on outcomes, increase
close to corporate and industry standards. ' /' individual autonomy.
' /
'
Low * l i !v J ^ • High
'ransnatl >nal VlR /
Firm level HR: Coordir ation and resource
flexbihty pushing "dece itralized centralization",
HQ plays a role in inteç rating ideas from local
units
Unit level HR: Princpl€ s to be followed but

freedom of practices, e lough overlap in
practices to ensure con imon language.
Individual level HR: E nployees expected to N v
'' become ambidextrous luild requisite variety in '
employee base *
LOCAL
Low
Figure 5 Strategic HR response.
Table 1 Aligning levels of human capital with strategy
Multidomestic Meganational Transnational
Firm level Governance structure that enables Governance structure that i

decentralized decision-making, linked, HQ developed directives and
independent action across units, small processes, synchronized t
role for HQ development centralization," HQ plays a role in
integrating ideas from local units
Unit Level Practices are adapted to meet local Practices are highly influenced by HQ, Pr
circumstances and process-based incentives are used to a great deal of freedom allowed and
specify the need for integration and enough overlap in practices to ensure a
standardization common language
Individual Employees are empowered to make Employees are directed to stay close to Employ
Level decisions, are rewarded based on corporate and industry standards ambidextrous
outcomes, and are given increases in variety in employee base
individual autonomy
levels over time (Dierixck & Cool, 1989),

mightandbe
then
strategically leveraged to create co
tive advantage.
strategically integrating these forms within the MNC We have thereby increased ou
(see Table 1 to see how this framework oretical
can be used to
understanding of how firms can ove
inform management). While other types geographic
of humanand operational distance in their
forcethe
capital (e.g., project-specific) exist within setting.
MNC, For instance, integrating know
by addressing location specificity andfrom firm people in one location with nonoverla
specifi-
city, we have developed a framework that can found
knowledge be inside the firm can genera
generalized to effectively identify a ideas.
firm'sInhuman
this way, the type of human capita
capital portfolio and suggest how that portfolio
grated not only influences what human capit

194.145.103.190 on Thu, 02 May 2024 15:08:59 +00:00
*** An architectural framework for global talent management Shad Morris et al
742
from
used but also how that knowledge helps a firm to how human capital is measured. In other
achieve strategic advantage. words, rather than aggregating these forms of
human capital across the organization, we also need
In addition, the human capital architecture offers
an alternative knowledge-based model ratherto
than
understand how they interact with other firm-
the traditional demographic-based model that based resources to generate unit-level and firm-level
examines staffing decisions based on whether some-
human capital that is tied to both social and organi-
one is native to the country or originally from zational
head- factors (Morris & Snell, 2011).
quarters. This helps the staffing literature examine
Individual-level measurement
people based on their knowledge portfolio, regard-
less of where they are from or where theyWhen
are hired into the firm, employees possess a
currently located. For example, companiesspecific
that level of local and international human capi-
tal. Since
adopt a strong global strategy do not need to turn to most new hires have not worked in multi-
ple countries,
parent country nationals to ensure that knowledge is they rarely possess large pools of
integrated and standardized across borders; rather,
international human capital. With little exception,
distinctions have not been made to understand the
these companies should staff people with strong
levels of corporate human capital combined difference
with between an individual's cross-border
international human capital. This perspective moves
knowledge that is tied to a particular firm (corporate
beyond alignment of HR practices with strategy human
by capital) and the cross-border knowledge that
discussing how the dynamic capability to integrate
is tied to multiple firms are usually applicable across
organizations and sometimes even industries (inter-
different forms of human capital at multiple levels
creates the increased social complexity and causal
national human capital). Based on the global talent
architecture,
ambiguity that are difficult for competing firms to much of this difference lies in how the
imitate or copy. individual is tied to other peers within the firm vs
outside of the firm and how familiar that person is
Research Agenda with the MNC's specific processes, systems, and
Coff (1999: 120) noted that a primary flaw of
practices.
For example, in a study of cosmopolitans and
theories of the firm research is "the overly simplistic
definition of a firm." Scholars often assume that locals, Haas (2006) found that the human capital
when a firm internalizes human capital, the portfolio
firm that individuals possess impacts their pro-
owns it - or at least owns the rights to capture ject-level
the performance. Seeing a need to move
value from that human capital (e.g., Barney, beyond
1991; traditional expatriate research, Haas empha-
Williamson, 1985). However, in most cases, it is sized the importance of distinguishing between
unrealistic to assume that firms can own knowl- types of human capital possessed by employees in
edge-based assets (cf., Coff, 2010; Foss & Foss, subsidiaries. Using the "cosmopolitan-local" classifi-
2008). As a result, the MNC can be seen as a cation
nexusscheme to examine the level of experience for
of different configurations of knowledge-based local hires, she categorized team members according
to their experience and knowledge base. In this
assets that, to a large extent, are embedded within
people. How effectively human capital is combinedregard, local and international human capital can
and exchanged with firm-specific resources be deter-
determined by assessing employees' international
mines the portfolio of knowledge possessed by itsexperience and education outside of the MNC. Sub-
individual employees, subsidiaries, and the MNC as
sidiary human capital can be determined further by
a whole. examining the employee's individual social net-
The human capital architecture provides a frame-
works and use of subsidiary routines, processes, and
systems. The more employees that use these
work from which to understand the dynamic portfo-
lio of talent within the MNC and how the various
mechanisms, the greater their subsidiary human
interactions among individual-level, unit-level, and and, potentially, their ability to create value
capital,
firm-level knowledge can influence the MNC'sfor abil-
the firm. Corporate human capital can be deter-
mined by examining how much these individuals
ity to create and capture value in a fluid, global
business environment. Employees often possess a
exchange information with peers and use databases
portfolio representing aspects of local, subsidiary,
outside of the country but inside the firm.
corporate, and international human capital. Part Based
of on the arguments posited in this article,
once you have measured this portfolio of human
the challenge in understanding these complexities
and how they might be influenced by HR comes capital, you can test it against performance measures

194.145.103.190 on Thu, 02 May 2024 15:08:59 +00:00
a1¿.
An architectural framework for global talent management Shad Morris et al ^
743
stronger portfolio of subsidiary human capital than

of individual employees to assess what level of value
it has of local and international human capital.
each employee is creating for the firm. You can also
assess the salary level of these employees compared Morris and Snell (2011) measured subsidiary-level
with the average market wages. If they are paid local and international human capital by examining
above market rates, then you might surmise that how much international experience, training, and
education each employee had outside the firm but
they are capturing more of the value than the firm,
although both may still benefit (Coff, 1999). Under
within the same industry. This was then aggregated
to the subsidiary level. To assess how much this
such circumstances, we expect employees to possess
human capital was specific to the MNC as a whole
a strong portfolio of local and international human
capital, making them visible and attractive to (corporate human capital), the researchers examined
competitors. the extent to which employees from these subsidi-
aries exchanged knowledge with employees in other
subsidiaries and how often they used and contribu-
Unit-level measurement ted to globally integrated information systems, pro-
Subsidiaries are also composed of a particular human cesses, and routines.
capital portfolio, which allows them to contribute to To assess how specific this knowledge is to the
a firm's competitive advantage. In reality, units subsidiary (subsidiary human capital), scholars can
present a nesting problem for measurement. Within examine the network ties within the subsidiary and
the MNC, individuals may cross multiple units determine to what extent the routines, processes,
within a country or even across countries (Mathieu and systems are utilized within the subsidiary. Such
& Chen, 2010). Units might be embedded within measures will help determine the human capital
other units and employees might be embedded portfolio for an MNC subsidiary. To test which
within multiple units. Such problems require that
human capital configurations are most effective,
researchers become more involved with the data scholars can assess how much revenue is generated
they are examining. One way to do this is toby the subsidiary itself (value creation) and then
engage
in more detailed qualitative data to understandassess how much of that value is sent to headquar-
where the boundaries exist and to help make ters, used to pay employees, or reinvested into the
meaningful differences for purposes of analysis. For subsidiary itself (value capture).
example, Farndale, Scullion, and Sparrow (2010)
conducted in-depth interviews with HR managers at Firm-level measurement
multiple levels within a series of MNCs to ensureIf you were to analyze MNCs from a knowledge-
that their study was focused on the correct unit level based perspective, you would need to examine how
of analysis. Once this was determined, they con- different human capital portfolios might lead to
ducted further qualitative analyses to understanddifferent outcomes for different MNCs. Such a level
the role of HR subunits within MNCs. of analysis may also capture the overarching strategy
This human capital portfolio not only represents of the firm, as a multidomestic strategy would likely
an aggregate level of human capital of all its employ-
lead to a much larger portfolio of local and subsidi-
ees, but it also represents a socially and organiza-ary human capital. MNCs with strong local expertise
tionally embedded set of knowledge collectivelymay be especially good at creating value locally but
realized at the subsidiary level. For example, asmay not be good at capturing or leveraging that
subsidiaries localize their operations, they mustvalue for the entire firm. As a result, MNCs using a
combine the knowledge of their local hires with the transnational strategy want a mix of both local and
knowledge and resources specific to the subsidiary. subsidiary human capital, coupled with strong levels
of corporate human capital that allow them to
This is done by getting local experts to develop social
relationships with managers and coworkers in order capture much of the value created by subsidiaries -
to develop a team production model. Getting local and in the process, create new value for the MNC as
well.
experts to adopt subsidiary-level processes, systems,
and practices to help them with their work will Measuring firm-level human capital requires asses-
achieve this end result as well. Both social and sing human capital portfolios at the subsidiary level.
organizational capital development increase the
Subsidiaries that carry large amounts of corporate
social complexity, causal ambiguity, and firm speci-
human capital are thoroughly integrated and fre-
quently
ficity of local experts' knowledge. A subsidiary thatexchange knowledge. This is because the
does this combination process well may have
people a
within each subsidiary use social networks,
lournal of International Businpss Studies

194.145.103.190 on Thu, 02 May 2024 15:08:59 +00:00
^ An architectural framework for global talent management Shad Morris et al
744
longitudinal data can help overcome problems

routines, processes, and systems to share knowledge
related to causation.
with one another. This exchange also leads to greater
understanding among employees of how and when Overall, conducting research on global talent man-
agement
to apply their knowledge to help the organization as presents an alternative framework for
a whole, and aids them in finding knowledge inexamining
the the MNC. This framework demonstrates
MNC that will benefit the subsidiary unit. Such that the MNC is really a nexus of various forms of
research is not limited to traditional quantitative
human capital that are combined and exchanged
with each other. Because human assets have the
methods, and should be explored using multidisci-
plinary collaborations (Farndale et al., 2010), greatest
quali- potential to create value for the firm, it is
tative research, and longitudinal research designs.
important for managers to understand how to effec-
tively measure and analyze knowledge from their
Building bridges across the levels employees. Such an understanding helps identify
Keep in mind that whenever research traverses
how human capital, as a strategic resource, can lead
multiple levels, you need to be careful at what level
to competitive advantage for the MNC.
you articulate the theoretical basis (Hitt, Beamish,
Jackson, & Mathieu, 2007; Molloy, Ployhart, & CONCLUSION
Wright, 2011). Levels of theory refer to the levels at We have presented an architecture for global talent
which generalizations are meant to apply (Rousseau, management to extend existing knowledge-based
1995). The generalizations herein for the human views and human capital theories within the global
capital architecture are meant to be generalized at context. In so doing, we hoped to build new assump-
the firm level, but certainly such a framework could tions of geographic distance and operational differ-
be generalized at multiple levels. In general, a good ences. The first step in our extension examined an
rule of thumb is that the level at which you formu- additional form of human capital specificity - one
late your hypotheses is the level of theory. Develop- related to geographic context rather than organiza-
ing separate theories for multiple levels is possible, tional boundaries. In the next step, we identified the
but you should make sure that theorizing and mea- individual-level to unit-level to firm-level develop-
surement are consistent with the hypotheses. In fact, ment of four different forms of human capital found
much of the real-world problems faced by organiza- within the firm. To show this, we juxtaposed firm-
tions - such as global outsourcing, healthcare man- specificity with geographic specificity in order to
agement, bribery and corruption, political risk, and determine the origin of knowledge within the firm.
Next, we examined how different types of human
poverty - are embedded in multiple-level issues that
need to be both analyzed and theorized at multiple capital integration might lead to competitive advan-
levels (Hitt et al., 2007). To aid in such complex tage, depending on the firm's strategy. In addition to
research, advances in multilevel modeling help examining how different international strategies
increase precision for quantitative research. For exam- might lead to competitive advantage, we examined
ple, multilevel modeling has become available for the role of HR management in developing capabil-
analyzing dichotomous, nominal, count, and ordinal ities that allow firms to actually implement these
dependent variables (Peterson, Arregle, & Martin, strategies within the human capital framework from
2012). Indeed, there is still a dearth of studies using individual, unit, and firm levels. Finally, we pro-
multilevel analysis in the international business arena. posed a future research agenda to help examine this
To make things more complex, Caseio (2012) has framework from a global talent management per-
shown that precautions must be taken when con- spective. Hopefully future research can help compa-
ducting international research on people within nies to more effectively manage their talent
organizations. For example, examining data across portfolios to increase global competitiveness in an
cultures and languages presents translation issues for ever-changing world.
measurement. Defining the populations that need to
be examined can also create problems because of the ACKNOWLEDGEMENTS
nesting issues mentioned above. Solutions to these We would like to thank our editor, Paula Caligiuri, and
methodological problems when analyzing multiple reviewers for insightful direction and comments guid-
level data include, for example, using multiple data- ing this article through the review process. We would
bases and multiple research methods to define and also like to thank faculty members at Copenhagen
list populations of interest and to ensure you are Business School and The Ohio State University for
getting the correct level of analysis. In addition, valuable comments and direction on this article.

194.145.103.190 on Thu, 02 May 2024 15:08:59 +00:00
"Sfe
745
NOTES compensation on local conditions. For this discussion,

we
1 While Bartlett and Ghoshal (1 989) originally included refer strictly to the academic literature on
localization as a means to replace expatriates with local
the "international strategy", Harzing (2000) points out
that this strategy is not legitimately a strategy. managers.
4Note, however, that outcome-based incentives can
2While countries will vary in the value of their different
also be detrimental when standardized processes need
contexts for the larger MNC, we argue that local human
capital, in general, provides different enough contextsbe followed. For example, if the specified end result is
to
across borders to offer new insights for the MNC. maximizing shareholder value, then companies like
Enron may engage in processes that result in short-run
3For HR practitioners in MNCs, "localization" may
also refer to the employment practice of basing benefits but long-term harm to the company.
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Journal of International Business Studies, 25(2): 229-251 .Shad Morris (Cornell University, PhD) is the Geor-
Rousseau, D. M. 1995. Psychological contracts in organizations.
Thousand Oaks, CA: Sage.
gia White Fellow and Associate Professor of Organi-
zational
Rumelt, R. P. 1 984. Towards a strategic theory of the firm. In R. B. Leadership and Strategy at Brigham Young
Lamb (Ed), Competitive strategic management: 556-570.
University's Marriott School of Management. His
Enqlewood Cliffs, NJ: Prentice Hall.
research addresses international business and strate-
Schuler, R. S., Jackson, S. E., & Tarique, I. 201 1 . Global talent
gic human resource management issues, concentrat-
management and global talent challenges: Strategic opportu-
nities for IHRM. Journal of World Business, 46(4): 506-51 6.
ing particularly on how global firms innovate
Schulz, M. 2001 . The uncertain relevance of newness: Organiza-
through people and knowledge.
tional learning and knowledge flows. Academy of Management
Journal, 44(4): 661-681.
Scott Snell (Michigan State University, PhD) is
Scullion, H., & Collings, D. G. 201 1 . Global talent management.
New York: Routledge. Professor and Senior Associate Dean of Executive
Shaffer, M. A., Kraimer, M. L., Chen, Y. P., & Bolino, M. C. 2012.
Choices, challenges, and career consequences of global Education
work at the University of Virginia's Darden
Graduate School of Business. His research focuses
experiences: A review and future agenda. Journal of Manage-
ment, 38(4): 1282-1 327.
Shenkar, O. 2004. One more time: International business in a on strategic human resource management, human
global economy. Journal of International Business Studies, 35(2): capital and talent management, as well as strategic
161-171.
capability and organizational learning.
Smith, K., Collins, C., & Clark, K. 2005. Existing knowledge,
knowledge creation capability, and the rate of new product
Ingmar
introduction in high-technology firms. Academy of Management Björkman (Hanken School of Economics,
Journal, 48(2): 346-357. PhD) is Professor and Dean of Aalto University
Somaya, D., & Williamson, I. O. 2008. Rethinking the School
"war for
of Business in Finland. His research interests
talent". MIT Sloan Management Review, 49(4): 29-34.
focus
Sparrow, P., Brewster, C., & Harris, H. 2004. Globalizing on people management issues in multinational
human
resource management. London: Routledge.
corporations and international mergers & acquisitions.
Stahl, G., Björkman, I., Farndale, E., Morris, S. S., Paauwe, ].,
This
Stiles, P., & Wright, P. 201 2. Six principles of effective is his 10th article published
global in the Journal of
talent management. Sloan Management Review, 53(2): International
25-42. Business Studies .
Accepted by Paula Caligiuri, Area Editor, 10 May 2015. This article has been with the authors for three revisions.

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An architectural framework for global talent management

Author(s): Shad Morris, Scott Snell and Ingmar Björkman

Stable URL: https://www.jstor.org/stable/43907605

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An architectural framework for global talent

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about human capital at a more macro or strategicemphasizes

Journal of International Business Studies

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• Individual: Developed through experience or • Individual: Developed through action and

Figure 1 Global talent portfolio.

which knowledge is not potentially applicable across Local Human Capital

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journal of International Business Studies

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required for knowledge creation. The challenge for

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Journal of International Business Studies

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customization of knowledge across business units.

Journal of International Business Studies

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journal of International Business Studies

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unit, and firm levels does not just come as people

Journal of International Business Studies

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the HR orientation of the MNC (Taylor, Beechler,

V ' / ' "••••• Location-Specifigrty '

Figure 2 Multidomestic strategy.

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integrate these two types of human capital is helping

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more autonomy in how the employees use those

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3. High investment in corporate HC to achieve 2- Lower investment in subsidiary HC to regional

4. Moderate investment in international HC to 1. Minimal investment in local HC beyond tactical

Figure 3 Meganational strategy.

journal of International Business Studies

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For example, General Electric (GE) is known for a

Journal of International Business Studies

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CORPORATE / ' SUBSIDIARY

Figure 4 Transnational strategy.

In effect, new ideas from local workforce subunits

journal of International Business Studies

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Journal of International Business Studies

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capital without resorting to headquarter mandates. DISCUSSION

Journal of International Business Studies

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Meganational HR / ' Multidomestic HR

X HR structure that is tightly / / / ' ' '

Unit level HR: Princpl€ s to be followed but

Figure 5 Strategic HR response.