HRM: From a Support Function to a Strategic Dimension
Human resource management (HEM) is evolving from solely that of a support function, characterized by compliance with external regulation regarding selection, termination, compensation, benefits administration, and labor relations to one of strategic importance which is increasingly being asked to assume important new roles that pertain to globalization (Kerr/Von Glinow 1997). Some have even identified HRM as the glue that holds global organizations together (Evans 1992; Gupta/Govindaraj an 1991).
These new roles include international extensions of more traditional human resource management support functions such as providing country-specific knowledge of union and labor policies, legal and regulatory requirements, compensation, and benefits practices. They include preparing people for international assignments and reentry after those assignments are completed (Black/Mendenhall 1990; Teagarden/Gordon 1994; Tung 1981). Human resource management can be used to enhance organizational learning and to help the company build a world-class workforce poised for global competition in the next century (Barney 1991; Prahalad/Hamel 1990; Bartlett/Ghoshal 1989; McKee 1997; Teagarden/ Butler/Von Glinow 1991).
Perhaps most importantly, human resource management is becoming a strategic vehicle which allows firms to balance headquarters demands for global coordination or integration with subsidiary level demands for adaptation or local responsiveness (Bartlett/Ghoshal 1989). This balancing act can be seen whether the organization in question is a joint venture or some other strategic alliance, positioned off-shore or even a large domestic firm (Lorange 1986).
We assert that the management of human resources either in the domestic context or internationally must be approached at the strategic level (Butler/Ferris/Napier 1991; Schuler/Dowling/De Cieri 1993) and that significant balance cannot be achieved unless a broader view of context is taken. Accordingly, the integration of affiliates within the international context has been identified as an important strategic consideration (Hambrick/Snow 1989) which we contend has significant human resource implications for the success of the entire enterprise. Integration and human resource management are dependent upon one another to the degree that structuring a firm's global activities involves the deployment and use of human capital and other human assets.
As business has become global in scope, we are on the brink of an age where human resources must be as much or more highly valued than technology or other factors (Bartlett/Ghoshal 1989; Pfeiffer 1994; Pucik 1992; Tichy et al. 1992; Ulrich/Lake 1990). The standardization of manufacturing and service technologies through use of world-class practices that include total quality management, design for manufacturability, just-in-time inventory control, continuous process improvement, reengineering, and the like, have left human resource management as the last improvement frontier. A frontier where global competitors can opportunistically differentiate their performance through use of a critical capability, the knowledge and ingenuity of their workforce.
The obvious question is whether the HR community--both scholars and practitioners -- is ready to meet the challenges presented at this last frontier. The HR community must be able to provide solid prescriptive advice to management on how to utilize their human resources in the most efficient and effective manner to leverage these potential benefits from international operations. There has been considerable discussion as to how HR can strategically partner with businesses on a level playing field to accomplish their goals (Ulrich 1997). This, in turn, means that we, as members of this community, must be able to provide advice, founded in research, on how to manage human resources on an international level. …