Strategic Human Resource Management: the Issues of Strategic Alignment and Resourcing

Strategic Human Resource Management: the Issues of Strategic Alignment and Resourcing Unit: Strategic Human Resource Management Word Count: 2977 Content 2.0 Alignment of SHRM between Headquarter and Subsidiaries On the basis of Baird and Meshoulam’s (1988) Two Fit Theory, Milliman et al (1991) has expanded the fit theory specific to IHRM, named Four Fits of Strategic IHRM. It is demonstrated as follows. {draw:frame} Source: Milliman et al, 1991, p.322 Congruence or fit is defined as the degree of one component is consistent with the other in the respect of goals, structure and demand (Nadler & Tushman, 1980). Four dimensions stands for different aspects. This essay will mainly discuss the internal-outside dimension, namely foreign subsidiaries fit to headquarter IHRM. 2.1 Subsidiaries Fit to Headquarter IHRM: A Polycentric View Polycentrism assumes that host country’s employees have different values and cultures that headquarter personnel are difficult to understand, so human resource tactics such as training, motivation, rewarding and assessment should be adjusted according to host country needs (Perlmutter, 1965). The following table shows characteristics of polycentrism. Perlmutter (1969) compared a polycentric firm to confederation where headquarter has loose connection with subsidiaries. Source: Perlmutter, 1969, p.12 2. 2 Alignment Problem behind Polycentrism Polycentrism can generate both pain and pleasure for a global company (Hoecklin, 1995). Pleasure comes from the benefit of cost effectiveness while pain may mean two levels of alignment problems. The superficial level means the coordination problem between headquarter and subsidiaries. Since managers are locally recruited, communication might be reduced due to language and market differences. Local managers sometimes even complain headquarter never tells them anything (Perlmutter, 1962). This means that national boarder can exerts a barrier for information

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