Outline of the chapter

Goal: To analyse HR strategy in multinational firms

Content:
 The growth of multinational firms
 Multinational strategies, structures and value chains
 What’s different about HR strategy in the multinational
firm?

Boxall and Purcell (2016) Strategy and Human Resource Management. 4th Edition. Palgrave
The growth of multinational firms

The MNC is typically a version of the multidivisional company, one with the
added complications of being transnational

Boxall and Purcell (2016) Strategy and Human Resource Management. 4th Edition. Palgrave
Multinational strategies, structures and value chains

Multinationals are typically aiming to obtain better access to resources, including

more cost-effective production capabilities than they have in their home country,
and seeking to take advantage of greater market opportunities than they have at
home

Clearly, many multinational firms are simultaneously, and continuously, pursuing

both

Not surprisingly, multinationals typically create some kind of divisionalised

structure

Boxall and Purcell (2016) Strategy and Human Resource Management. 4th Edition. Palgrave
What’s different about HR strategy in the multinational
firm?

A key issue in the literature on HRM in MNCs has been the tension between global
integration and local adaptation or decentralisation

To coordinate work demands and deliveries among subsidiaries and suppliers is one
thing: to tell them all to manage their employees in the same way is quite another

The obvious fact is that any multinational establishing a foreign operation is going
to need to gain permission from local officials, address local laws, and set up
agreements or contracts with local people

In general terms, there is always a need for MNCs to adapt to local employment
practices (recall chapter 3’s discussion of ‘societal fit’)

Boxall and Purcell (2016) Strategy and Human Resource Management. 4th Edition. Palgrave
Lecture conclusions

1. The growth of multinational companies has been a dominant feature of the

global economy over the last 40 years
2. Processes to improve coordination, and to transfer key technologies and know-
how, are usually of great interest to local managers in multinationals but a
substantial degree of adaptation to local labour markets, employment laws and
cultural norms is essential to running their business
3. Globalisation has opened up huge opportunities for multinationals to hire
capable workforces in developing countries at much lower costs. But
multinationals are coming under close scrutiny for the legitimacy of their HR
strategies, irrespective of how long or complex the value chain in which they are
embedded

Boxall and Purcell (2016) Strategy and Human Resource Management. 4th Edition. Palgrave