An Innovative Global Management Staffing System: A Competency-based Perspective 381

AN INNOVATIVE GLOBAL MANAGEMENT STAFFING

SYSTEM: A COMPETENCY-BASED PERSPECTIVE

Michael G. Harvey, Milorad M. Novicevic, and Cheri Speier

Significant demands are imposed on corporate management of multinational corporations (MNCs)

to develop a strategic orientation of their global human resource management systems (SGHRM).
This strategic orientation, which should balance the need for both global stability and local
flexibility, necessitates a more pronounced multicultural management membership. The com-
petency-based SGHRM system proposed in this paper combines an innovative global manage-
ment staffing practice of inpatriating foreign managers with the extant practice of expatriating
domestic managers. The competency-based criteria are used to identify global manager candi-
date pools capable of executing an integrated global management system 2000 John Wiley &
Sons, Inc.

For all practical purposes, all business today is global. Those individual businesses, firms, industries,
and whole societies that clearly understand the new rules of doing business in a world economy will
prosper; those who do not will perish. (Mitroff, 1987)

Introduction 1997). Developing a human resource system Developing a

designed to identify, attract, and retain an ad- human resource
system designed
Although Professor Mitroff s observations ap- equate complement of global managers who are to identify,
peared prophetic over a decade ago, many or- capable of coordinating the global strategic ef- attract, and
ganizations have not yet internalized the forts of the firm while at the same time con- retain an
influence of global markets and global com- trolling local host country strategies is a adequate
petitors on their operations. To compete in a daunting task. Many organizations attempting complement of
global managers
global market place, organizations must create to globalize find that there are a limited num-
who are capable
an effective means to develop a global core com- ber of qualified leaders to manage in a global of coordinating
petency which translates into a sustained glo- context thereby inhibiting the globalization pro- the global
bal competitive advantage (Minehan, 1998). cess. In a recent survey of Fortune 500 firms, strategic efforts
There is a growing consensus that globally com- 85% of human resource managers indicated of the firm while
petent organizations will depend on the unique- that they do not believe they have an adequate at the same time
controlling local
ness of their human resources and the system number of global leaders (Gregersen, Morrison, host country
of managing human resources effectively to & Black, 1998). strategies is a
gain global competitive advantage (Bartlett & Organizations rely on different types of daunting task.
Ghoshal, 1994, 1995; Ghoshal & Bartlett, foreign managers based on the degree to which

Human Resource Management, Winter 2000, Vol. 39, No. 4, Pp. 381394
2000 John Wiley & Sons, Inc.
382 HUMAN RESOURCE MANAGEMENT, Winter 2000

global operations have been embedded into Katz, 1986; Doz & Prahalad, 1987). The evo-
organizational processes and procedures. Or- lution from international to multinational ne-
ganizations having a predominately domestic cessitates integrating each specific host
focus developed ethnocentric human resource countrys environmental requirements into the
management practices and procedures due to general operating style of the multinational
the narrow geographic scope of their overseas organization. The country-specific contextual
business. Personnel from within the organi- adaptation to legal, cultural, social, and indi-
zation who expressed interest in the interna- vidual psychological dimensions of doing
tional sales of the companys product were business in requires local managers with so-
typically selected for the limited number of cial knowledge of host countries[ culture and
overseas assignments. institutions (Aguirre, 1997; Reynolds, 1997).
As businesses evolved to an international An over-reliance on local managers, however,
perspective, the number and frequency of for- can result in other problems as discovered by
eign assignments increased, necessitating the Tellabs, Inc., a Chicago-based designer and
development of an organizational program to manufacturer of telecommunication products.
prepare and manage home country nationals When the company opened its facility in Ire-
(expatriates) for overseas assignment success. land and staffed it with local managers, par-
United States-based organizations have almost ent company management did not take time
exclusively utilized expatriates in this early to adequately communicate Tellabs corporate
stage of internationalization given the need to culture (i.e., informal, flexible, and entrepre-
formally and informally control foreign opera- neurial) to the Irish staff that operated differ-
tions (Roberts, Kossek, & Ozeki, 1998). Ex- ently. As a result, when an American executive
patriate failure rates have been high and costly, went to Ireland, the Irish managers would
however, and have been blamed for a variety appear to agree with suggested changes yet
of issues including difficulties in adjusting to would not always proceed in the anticipated
and managing across cultures and for work- manner. The problem was a major cultural and
family conflict (e.g., dual-career conflicts) communication gap despite the use of the
(Webb & Wright, 1996; Dowling, Welch, & same language (Solomon, 1995a).
Schuler, 1999). For example, Motorola, Inc., Multinational organizations face a series
an Illinois-based world-known exporter of tele- of challenges as they progress into a more glo-
communication and semiconductor equip- bal perspective and as rivalries for global com-
ment, calculates that a mid-level foreign petitiveness intensify. The evolution to a global
assignment of a $75,000-a-year expatriate runs orientation requires organizations to develop
$600,000 to $2.25 million for a three-year the ability to amass top management teams
posting. Linda Kuna, Motorolas global assign- (TMTs) in both the headquarters and subsid-
ment manager, explains the risks of over-reli- iary locations with converging competencies
ance on expatriates: and a multicultural strategic orientation
(Sambharya, 1996). This multicultural orien-
These are very expensive mistakes to make and tation enables management to strategically act
money is only the tip of the iceberg. By send- globally while addressing the competition in
ing the wrong kind of individual you can dam- local markets effectively (Ghoshal & Bartlett,
age your relationships with a host country, you 1997). Although this multicultural orientation
can lose business opportunities, and you dam- facilitates effective global management, it also
age the career path for individuals who prob- creates cognitive diversity across the TMT that
ably should not have been sent overseas. needs to be managed proactively. Managing this
(Mervosh & McClenehan, 1997: 69) cognitive diversity of orientations, domains, and
memberships necessitates the reevaluation of
Once entrenched in international business the centric strategic orientation present in the
orientation, many organizations developed a global management systems and practices of
multi-foci perspective leading to a multina- many multinational corporations (MNCs).
tional orientation (e.g., involved in overseas What is needed is a global management staff-
businesses across multiple nations) (Pucik and ing strategy that enables global consistency
 An Innovative Global Management Staffing System: A Competency-based Perspective 383

among various managerial pools and the for- ensure the managerial resources to implement
eign subsidiaries (Harvey, 1997; Harvey & the preferred strategy (Gregersen, Morrison,
Buckley, 1997). & Black, 1998).
This article examines the MNC transition Contrary to the behavioral perspective, the
to a global orientation and thus, the develop- resource-based view focuses on the resources
ment of a global management staffing system internal to the firm (i.e., the identification and
capable of developing an adequate pool of creation of internal resource bundles of both
management candidates to insure organiza- tangible and intangible assets to achieve a
tional efficiency and effectiveness in the glo- sustained competitive advantage) (Barney,
bal market place. The paper is comprised of 1991; Roth, 1995). The resource-based per-
three sections: (1) a competency-based per- spective focuses on the underlying mecha-
spective on global staffing; (2) the introduc- nisms needed to deploy resources effectively
tion of innovative global staffing practices but tends to ignore the potential value of ex-
through the use of inpatriate managers as a ternal market relationships and opportunities.
means to augment the multicultural dimen- The resource-based approach is therefore lim-
sion of the management team; and (3) the de- ited in fully explaining a human resource sys-
sign of an integrated competency-based tem capable of matching the complexity of
approach to global management staffing to staffing a global organizational strategy. a strategic
create a sustained competitive advantage. It global human
is anticipated that applying strategic interna- A Competency-based Approach Leading resource
tional human resource management (SIHRM) to SGHRM management
(SGHRM) system
in a global context will not adequately address
will be required
the unique requirements of staffing a global An integrative perspective leading to a SGHRM to meet the
organization; instead a strategic global human view is a competency-based perspective (Lado, challenge of
resource management (SGHRM) system will Boyd, & Wright, 1992; Lado & Wilson, 1994). global
be required to meet the challenge of global A competency-based view of the relationship competition in
competition in the 21st century. between human resource management and the 21st century.
strategy suggests that input, managerial, and
A Competency-based View of SGHRM transformation-based competencies operate in-
terdependently creating firm-specific compe-
Alternative Perspectives on SIHRM tencies that converge to produce a sustained
competitive advantage. A competency-based
Prior research examining the globalization of perspective explicitly addresses the dynamic
business and the corresponding influence on nature of the global environment by acknowl-
strategic international human resource poli- edging that an initial set of global organization
cies and practices has tended towards either competencies should be renewed by the devel-
a behavioral or resource-based approach. Al- opment of new competencies. This renewal
though these perspectives have provided in- suggests that a firm should formulate its stra-
sights into the HR process, each approach has tegic intent to discover and develop new com-
limitations. The behavioral view assumes that petencies of strategic relevance (Sanchez,
SIHRM has a role in strategy implementation Heene, & Thomas, 1996). This competency-
but has a very modest influence in strategy based perspective also acknowledges that the
formulation. In other words, the global external environment can act as a source for
organizations environment and strategy drive firm competencies.
SIHRM configuration (Cappeli & Singh, Figure 1 illustrates the basic components
1992; Wright & Snell, 1992). Specifically, this of a competency-based strategic choice process.
viewpoint assumes that corporate HR depart- Competencies are divided into three distinct
ments select candidates having skills consis- categories: (1) input competenciescapital, la-
tent with the chosen corporate strategy. bor, physical assets, and other factor inputs to
Dynamic strategies in global organizations, the organization; (2) managerial competen-
however, may create situations in which a be- ciesTMT capabilities, social knowledge, in-
haviorally oriented SIHRM cannot offer or formal internal/external networks, and personal
384 HUMAN RESOURCE MANAGEMENT, Winter 2000

FIGURE 1. Competency-based strategic choice process.

social capital of individual managers that can tage are the input resources to the firm. These
be used to accomplish the mission of the orga- are the same competencies that would be iden-
nization; and 3) transformation-based compe- tified in a resource-based view of the firm: the
tenciesthe ability of management to bundled tangible and intangible internal re-
accomplish the tasks necessary to gain a com- sources (Oster, 1990) that are valuable, rare,
petitive position in the market place, which imperfectly mobile, and inimitable (Barney,
assumes adaptability and learning capabilities 1991). These input resources may include
embedded in the organization. As is depicted physical assets, organizational capital, and
in Figure 1, the three types of competencies specific human resources that enable an or-
can be bundled to provide the TMT a myriad ganization to supply customers with valued
of strategic-choice opportunities. The greater products and services (Lado & Wilson, 1994).
the stock of competencies, the larger the Specific to SGHRM, these assets may be the
amount of strategic options that can be ex- employees who have a strong desire or inter-
ecuted by management. The strategic choice est in managing an overseas operations (e.g.,
opportunities are weighed against the oppor- expatriates). These input human resources
tunities in the host country environmental con- may also include managers employed in over-
text. As the stock of competencies increases and seas subsidiaries who are able to share their
the environmental context is modified, man- social knowledge of the local context with
agement may make future strategic choices to members of the headquarters organization.
position the company dynamically in the glo- Allentown, Pennsylvania-based Air Products
bal market place. The continuous reassessment and Chemicals, Inc. an international manu-
of competencies and market changes allows the facturer of industrial gases, chemicals, and en-
firm to develop a global competency unique vironmental and emergency systems, makes a
from other organizations. Each of the specific point of hiring a small number of foreign-born
types of organizational competencies will be scientists and managers to augment their
briefly discussed. knowledge of emerging market countries.
1. Input Competencies: One source of firm Mobil Oil of Fairfax, Virginia has been follow-
specific competency that plays a critical role ing this procedure of globalizing their man-
in developing a sustained competitive advan- agement for over a decade.
 An Innovative Global Management Staffing System: A Competency-based Perspective 385

2. Managerial Competencies: Managerial 3.Transformation-based Competencies:

competencies focus on the organizational vi- The TMT may also need to acquire and de-
sion of the TMT and the decisions and actions velop competencies to more effectively address
this team takes in bringing this vision to frui- issues and collaborative relationships with
tion (Lado, et al., 1992). Managerial compe- constituencies (e.g., suppliers, customers) ex-
tencies, in and of themselves, may create ternal to the firm. Lado, et.al. (1992) have
sustained competitive advantage directly if the labeled this broad set of competencies as trans-
TMT is able to exploit unique firm-specific formation-based. Transformation-based com-
competencies. These competencies are par- petencies are those that enable the
ticularly valuable to the organization if they organization to transform inputs into outputs
provide an institutional bridge between the and may include alliance-based technology or
cultural, social, and political divide often found marketing innovations that facilitate new prod-
between the domestic and global operations uct development and customer relationships
of an organization (Gabby & Zuckerman, (Lado, et al., 1992). Similarly, these compe-
1998). A number of MNCs (e.g., Atlas Copco tencies may create a collective experience base Expatriates are
A.B., Bull S.A., Coca-Cola, Colgate-Palmolive, and/or organizational learning capability re- frequently only
expected/required
Fuji Xerox Co., Ltd., Rank Xerox) have salted sulting in an organizational culture and a to undertake one
their managerial ranks with key foreign func- learning environment that are difficult to rep- foreign
tion managers to provide the link between licate and that can create competitive advan- assignment,
headquarters control and local market differ- tage (Taylor, Beechler, & Napier, 1996; Roth limiting their
ences. These foreign managers provide the & ODonnell, 1996). social knowledge
input to the
social knowledge of local networks to insure Transformation-based competencies can
organization in
implementation of their MNCs strategies in play a specific role in SGHRM. First, there its global market
emerging markets. They have specific compe- may be human resources outside a firms head- orientation.
tencies which include institutional social quarters or even outside the organization who
knowledge acquired from their interactions have developed local and social knowledge
with social, financial, and political institutions regarding business relationships and oppor-
in the home and host countries, as well as from tunities in a specific geographic area or cul-
their ability to formulate issues within a global ture. These individuals are likely to have
frame-of-reference (Sohn, 1994). As these specific social capital that, if integrated into
managerial competencies develop, the result- the existing competencies of the organization,
ing outcomes from implementing the new vi- facilitate the organizations ability to effectively
sion may reshape the thinking, actions, and support and leverage the capabilities of over-
even the constituency of the TMT, making it seas subsidiaries, customers, and suppliers.
ultimately more global. Social knowledge may also facilitate the de-
Specific to human resource management, velopment of a control system that can pro-
a competency-based perspective would sug- vide the domestic organization with greater
gest that a diverse and heterogeneous set of control than can bureaucratic control systems,
cognitive perspectives (Mahony & Pandian, particularly in situations where the
1992) and managers coordination capabili- organizations ownership position does not
ties (Sanchez, Heene, & Thomas, 1996) can effectively support control (Egelhoff, 1984;
influence firm superior performance. A com- Tolbert, 1989). Furthermore, this knowledge,
petitive SGHRM system should therefore if brought back and embedded into the exist-
strive to create such a managerial capital to ing firm-specific routines, can facilitate orga-
yield a TMT with multicultural competen- nizational learning regarding the norms of
cies facilitating effective implementation of various overseas locations thus increasing or-
global strategies. Developing this ganizational effectiveness. Developing this
multicultural competency may result in a su- knowledge may be a problem in organizations
perior performance, as an organizations glo- with sole reliance on expatriate-based staff-
bal strategies would be consistent with its ing practices. Expatriates are frequently only
unique stock of managerial competencies. expected/required to undertake one foreign
(Wright & Snell,1994). assignment, limiting their social knowledge
386 HUMAN RESOURCE MANAGEMENT, Winter 2000

input to the organization in its global market third country nationals into the parent orga-
orientation. Furthermore, the frequency of nization on a semi-permanent or permanent
expatriate failures contributes to abbreviated basis (Harvey, 1997). The use of inpatriate
assignments that limit the development and managers, however, presents a unique set of
effective transfer of social knowledge. Thus, problems for MNCs who are bringing these
expatriates are non-renewable resources with individuals to the MNCs home country. A
limited accumulated experience in foreign multicultural work force necessitates a flex-
assignments (Harvey, 1997). ible, dynamic human resource system that can
Just as with organizational learning, orga- accommodate the differences presented by
nizational culture can develop into a transfor- inpatriate managers from a multitude of dif-
mation-based competency. It is believed that a ferent cultures. To better understand the use
corporate culture emphasizing multicultural of inpatriate managers, a model of inpatriation
management is essential for developing and has been developed.
implementing global strategies in multinational The model depicted in Figure 2 proposes
networks (Welch, 1994). These local and so- a proactive utilization of inpatriates to accel-
cial knowledge-laden human resources may erate globalization of an organizations busi-
therefore facilitate the development of a socially ness activities. It is anticipated that MNCs will
complex organizational culture that can lead in the future exhibit a declining growth rate
to sustained competitive advantage in a global in their use of expatriate managers. This be-
environment. AT&T grew from 50 managers lief is based on five critical issues:
in 10 countries to 52,000 overseas employees
in 105 countries after its alliance with NCR. 1. Expatriates cost/failure/performance
Today, the managers from a number of coun- record is questionable.
tries commingle throughout the alliance pro- 2. Expatriation will become more com-
viding the global human resource diversity to plex due to the increased number of
provide the alliance with a global mindset. dual-career couples and female expa-
By combining the three types of compe- triate candidates.
tencies effectively, the global organization can 3. Future emerging markets will be more
configure a repertoire of strategic choices difficult to attract expatriates to serve
based upon the national competitive environ- in (higher expatriate refusal rates), and
ment, while at the same time being mindful these countries will present greater
of the need to maintain network consistency adjustment problems due to differ-
between subsidiaries and headquarters. The ences in culture and level of economic
development of a TMT global mindset facili- development (higher expatriate failure
tates the creation of an adequate pool of glo- rates).
bal managers with complementary 4. Inpatriate managers have the cultural/
competencies and necessitates a proactive pos- economic background to more effec-
ture relative to the value of assembling, moti- tively address the problems in emerg-
vating, and retaining a multicultural ing markets.
management team. This SGHRM system thus 5. Global competitors have and will con-
facilitates effective combining and deploying tinue to adopt a multicultural perspec-
of the firm-specific competencies. tive to the global operations.

Inpatriation as a Means to Increase Expatriate managers can be effective over-

Global Competencies seas manager candidates when stationed in de-
veloped countries as it is anticipated that the
An innovative practice for developing a flow level of adjustment will be less in these coun-
of globally competent managers between for- tries and, therefore, the probability of attract-
eign subsidiaries and the headquarters is ing/retaining expatriate managers will be
through the inpatriation of foreign managers higher. It is important that there is a formal
(Harvey, 1997). Inpatriation is a formalized process for headquarters managers to have an
process of transferring and/or hiring local or opportunity to become expatriates in order to
 An Innovative Global Management Staffing System: A Competency-based Perspective 387

FIGURE 2. Flow of managers during globalization.

develop competent skills needed in the global patriates and inpatriates who know Gillette,
organization. Utilizing expatriates also helps can work in a variety of foreign locations, and
to insure that domestic managers can play a can move quickly throughout this global or-
significant integrating role in the future of the ganization (Zeien, 1995).
organization. If domestic managers were not The second critical dimension of the
expatriated, over time the organization would model depicts the inpatriates boundary-span-
become innovation and control-dependent on ning role in the globalization of organizational
inpatriate managers for their knowledge of management. Inpatriate managers play an
global business. The need for a global experi- important linking pin role between the do-
ence base becomes more apparent when one mestic headquarters and emerging markets
considers the influence of top managements that the organization is attempting to pen-
background on the resulting organizational etrate. When they are selected and transferred
strategic orientation (Wiersema & Bentel, to headquarters, inpatriates perform an inte-
1992). Dominant logic (i.e., the attitudes, grative, boundary-spanning role between head-
beliefs, and mindsets of the top management quarters and the foreign subsidiaries and their
team) strongly influences the entrenched stra- cultures (Thomas, 1994). Organizationally,
tegic thrust of the organization (Prahalad & inpatriate managers should provide competent
Bettis, 1986). In addition, career experiences leadership to the expansion efforts in devel-
beyond functional orientation can be expected oping/emerging markets including the devel-
to have a significant influence on organiza- opment of relationships and alliances in these
tional outcomes (Michael & Hambrick, 1992). novel contexts. Inpatriate managers would be
If domestic managers were not allowed to ex- formally located in the headquarters organi-
patriate, their contribution to organizational zation but would make frequent overseas trips
globalization would be limited. The expatri- to provide direction thereby facilitating
ates contribution to the multicultural TMT organizational expansion into the emerging
provides the stabilizing control factor that most markets. By locating inpatriate managers at
headquarters management prefers in the de- headquarters, top management would not ex-
velopment of the firms competitive strategy. perience the loss of control generally felt and
For 20 years, Gillette has been developing its partially experienced when using host coun-
core competency consisting of some 350 ex- try nationals located in their own countries.
388 HUMAN RESOURCE MANAGEMENT, Winter 2000

In addition, by having inpatriate managers do- based Chrysler Corp. has a focused program
micile in the domestic organization, the pro- of 45 inpatriates dedicated to coordinating the
cess of both multiculturalism and operations of its Mexican subsidiaries
transculturalism can be activated in the MNC. (Solomon, 1995b).
By utilizing their cultural input, the organiza- The primary role of inpatriate managers
tion has undertaken the first strategic step in is to culturally embed concepts, processes,
developing a multicultural management group and strategies in the organizations foreign
and global learning organization that is needed subsidiaries as inpatriates are more likely to
to compete effectively in the global market. For be accepted by host country nationals than
example, Texas Instruments (TI) typifies a glo- are expatriates. The cultural embedding
bal organization with an inpatriation-based mechanisms believed to be most effective are
staffing orientation. Pallab Chaterjee from In- as follows:
dia is the President of TI Calculator and Per-
sonal Notebook Group, whereas, Keh-Shew Lu 1. The specific issues the inpatriate
from Taiwan is the President of TI Asia. Steven manager pays attention to, measures,
Leven, TIs Senior Vice President of HRM, ex- and controls.
plained the TI orientation toward inpatriates: 2. How the inpatriate manager reacts to
critical differences between the two
These individuals provide expertise and organizational cultures (domestic/
knowledge that strengthens the American cor- host country).
poration. They are also able to bring an un- 3. An inpatriate providing a role model
derstanding of business, culture, and language (mentoring) for other host country
that allows a company to compete success- nationals.
fully overseas. (Greengard, 1996:54) 4. Inpatriate managers operationalization
of rewards and status appropriate for
Inpatriate managers can also generate in- host county nationals.
valuable input to the development of the hu- 5. Inpatriate managers recommenda-
man resource function in emerging markets tion of operating criteria for recruit-
by providing accurate advice on the adapta- ing, selection, and promotion of host
tion of specific technical dimensions of the country nationals (adapted from
human resource process (i.e., selection crite- Schein, 1983).
ria, compensation plans, performance evalu-
ations, and training/development for host This cultural adaptation of the home
country nationals). They can also provide a country organizational culture to subsidiaries
means for transferring the appropriate dimen- is a critical factor in increasing the functional
sions of the home organizations culture to the consistency or organizational fit among the
host country subsidiary. The culturally sensi- various organizational units. This fit estab-
tive exporting of corporate culture (i.e., roles, lishes the inter-unit linkages and balances the
norms, values, climate) to organizations in needs for autonomy (cultural identity), coor-
emerging markets allows control to be exer- dination (cooperation between organizational
cised in an acceptable and effective informal units), and control (home management con-
manner. Rather than enforcing an outside cern) for the purpose of increased competi-
organizational culture, following the tiveness in these emerging markets (Schuler,
inpatriates insights into the host country cul- Dowling, & De Cieri, 1993). The coordina-
ture allows the organizational climate in an tion/integration performed by inpatriate man-
emerging market subsidiary to evolve over agers is particularly important when the
time. Johnson Wax, a Wisconsin manufacturer headquarters perceives informal coordination
of household cleaning, personal care, and in- as a quasi-source of control (i.e., in countries
sect-control products, has 12,000 employees where the local markets differ dramatically
worldwide. In 1995, Johnson Wax had 15 from the home country).
inpatriates working in its headquarters and 85 Inpatriate managers can also provide
expatriates deployed internationally. Michigan- mentoring to high potential managers from
 An Innovative Global Management Staffing System: A Competency-based Perspective 389

host country nations to insure a succession plan shared norms in the home and host countries.
when new inpatriate managers are moved into Like any firm-specific resource, however,
the core of the home country organization. It inpatriates need to be assigned to situations
is important for a career path to be established in which the impact of their distinctive com-
for inpatriate managers that allows them a full petencies can be maximized.
opportunity to become an integral aspect of the There appears to be three underlying
home country organization. Inpatriate manag- factors that should be considered in deter-
ers must be viewed as a potential part of the mining how and when to utilize inpatriates
core management team and not as a periph- most effectively:
eral group for the organization to fully benefit
from the multiculturalism created (Harvey, 1. The organizational stage of globaliza-
1997; Harvey & Miceli, 2000). This process tion (i.e. the strategic needs of the or-
thus opens a career path for high potential host ganization vary by the level of its
country nationals to become future inpatriate involvement in the global market This innovative
managers. This career pathing has been suc- place). inpatriation
practice appears
cessfully implemented by Applied Materials, 2. The existing heterogeneity of global to be an effective
Inc. (AMI), a $3.1 billion global company from operations (i.e. path dependency is means to
Santa Clara, Californiathe worlds largest established by the past strategies of operationalize
producer of semiconductor manufacturing sys- the organization engendering hetero- multiculturalism
tems. More than 50% of AMIs senior manage- geneity in its internal organizational a key element in
developing a
ment team is foreign-born, including the capital resources, organizational struc- global
companys president and several top executives ture, planning, coordinating, and con- organization.
(Greengard, 1996). trolling mechanisms and HR systems,
as well as in its responses to host coun-
Implications for HR: Strategic Utilization try environments, contingent to level
of Inpatriate Managers in SGHRM of economic development and cultural
Systems novelty) (Barney and Wright. 1998).
3. Future strategic thrust (i.e. the stra-
The introduction of inpatriation practice tegic intent of the organization to in-
should be envisioned and planned as an fluence a change in the present level/
organization-wide process. The effective course of the firms existing globaliza-
implementation of this innovative practice can tion strategy).
have important influence on the strategic plan-
ning of the firms operations in emerging mar- It is important to note that each of these
kets. Specifically, inpatriates cognitive dimensions of strategy is continuous but is
flexibility would be invaluable when simplified as dichotomous (i.e., early vs. ma-
contextualizing functional aspects of various ture level of globalization). The resulting ma-
strategic elements in the firms business plan trix, presented in Table One, identifies how
for expansion into emerging markets. This in- the polar extremes of each dimension influ-
novative inpatriation practice appears to be an ences the inpatriate staffing choices for dif-
effective means to operationalize ferent managerial levels.
multiculturalisma key element in develop- Table I depicts the varying importance of
ing a global organization. inpatriation practice across managerial levels
Inpatriate managers can provide unique for different stages of internationalization,
cultural/social/political insights into develop- heterogeneity of the firms global operations,
ing coherent strategies for creating competi- and the future strategic intent of the manage-
tive advantage across emerging host country ment. Companies that are in the early stages
markets. Inpatriates can competently support of entering the global market arena may rely
global strategies and are keenly aware of the on proven global managers to institute the
need to coordinate and maintain compatibil- internal changes in the organization to launch
ity between local strategies and those of the the companys overseas strategies. For ex-
global network, given their knowledge of the ample, when Quaker Chemical Corp. of
390 HUMAN RESOURCE MANAGEMENT, Winter 2000

TABLE I Inpatriation Program Implementation Matrix.

Influences on Use/Appropriateness of Inpatriate Managers

Stage of Globalization Existing Heterogeneity of Future Strategic Thrust

Global Operations

Inpatriates at Organizational Early Mature Low High Concentrated Diversified

Levels

Top Management Team Low High Low High Low High

Senior Functional Managers Low High Low High Moderate Moderate

Middle Managers Low High Low High Moderate Moderate

Operations Managers Moderate High Low High Moderate High

Specialists High Low Low High Low High

Low = Less applicable for inpatriates

Moderate = Moderately applicable for inpatriates
High = Highly applicable for inpatriates

Conshakocken, Pennsylvania identified its fu- concrete program in the host country. ABC
ture growth opportunities in the global market Laboratories, Inc. of Columbia Missouri ap-
place, the firms board decided to hire S.W.W. pointed Jake Halliday, an Irish Ph.D., to be-
Lubsen as the firms president. This Dutch citi- come president of the company due to the
zen was viewed as having the necessary global differences in regulations and the complex-
perspective and competence to accelerate the ity of dealing with governmental regulations
internationalization of the company. As the throughout the world. The environmental
importance of the global market for the firm testing company was dependent on obtain-
increases, the complexity of performance ex- ing regulatory clearance in each country in
pectations increases (i.e., higher levels in the which it intended to operate. Dr. Halliday, as
organizational hierarchy); therefore, the inte- the companys president, understood the
gration of the social and functional knowledge technical and governmental ins and outs bet-
of the inpatriate skill base becomes more cru- ter than any domestic candidate for the posi-
cial (Adler & Ghader, 1989). Specifically, tion. As a part of the SGHRM system,
inpatriate managers can provide new insights inpatriates facilitate the customization of
of how to develop competitive advantage in the corporate plans in such a manner as to cre-
local market place and at the same time have a ate a competitive edge and are more likely to
global perspective to insure compatibility with generate a dynamic competency than when
the global network. a expatriate makes an independent decision
The greater the heterogeneity of the in an economic and/or culturally distant host
firms global operations, the more important country (Harvey & Buckley, 1997).
the development of senior management-level The more similar the host country environ-
inpatriates is to the global organization. The ment is to that of the home country, the more
complexity of operations associated with the likely a variation of a generic corporate strat-
high operational diversity necessitates egy will fit the environmental context. In such
managements contextual social knowledge of situations, control and consistency in these
host country contexts to insure that the ge- markets/subsidiaries become of primary con-
neric strategic thrust of the organization is cern to headquarters management. In these
translated and executed into an effective, cases, an expatriate manager would provide the
 An Innovative Global Management Staffing System: A Competency-based Perspective 391

necessary managerial skills to implement the ing because they are based on selectivity in glo-
corporate plan effectively because the environ- bal managerial staffing followed by comprehen-
ment does not dictate a major modification of sive training, socialization, and compensation
the corporate strategy. programs that encourage a positive interface be-
If competitor organizations are domesti- tween expatriates and inpatriates (Milkovich &
cally modifying their present positioning in the Bloom, 1998). By exploiting complementarities
global market place and moving to new cul- in expatriation and inpatriation practices, the
turally/economically distant host countries, global management staffing system accelerates
the need for inpatriate managers who can ac- learning and develops commitment and trust in
celerate and facilitate the firms competitive a global organization through enhanced man-
response will increase. K-Tron International, agers identification with the global organizations
Inc., Cherry Hill, New Jersey, hired an goals.
inpatriate manager, Marcel Rohr, to expand The competency-based perspective posits
the firms international operations in Europe, that the international management staffing
South America, and the Far East. The com- structure can no longer be determined by the
pany converted its international focus into a dichotomy between the headquarter-based
global strategic orientation of increased com- managerial competencies (expatriates) and
plexity with very few growing pains. The suc- subsidiary-based managerial competencies
cessful transition to a global company has been (host country and third country nationals). Global
attributed to Rohrs foresight and experience Instead, this structure is determined by the management
in global business; therefore, the ability of global organizations competencies as dynamic staffing needs
benchmarking competitors future strategies capabilities accumulated through individual not only to
match present
in new markets should also be taken into con- expatriate and inpatriate trial-and-error learn- competitive
sideration when assessing firm-specific devel- ing during assignments or through their so- strategies but
opment of inpatriate managers. Global cial learning during socialization processes in also to reflect on
management staffing needs not only to match headquarters and in and among subsidiaries. responses to the
present competitive strategies but also to re- It is the development of managerial com- future intentions
of global
flect on responses to the future intentions of petencies into an integrated global system that competitors.
global competitors (Schuler, Dowling, and De influences the corporate strategic choices and
Cieri, 1993). forms the firms global strategic positioning.
The competency-based view of a staffing sys-
Summary and Conclusions tem fosters a more change-oriented model of
global management in which cost-reducing
Effective global management staffing prac- static efficiency is replaced by value-adding
tices are designed to simultaneously exploit dynamic effectiveness. This involves extend-
complementarities in expatriation and ing the view of expatriates and inpatriates as
inpatriation practices and to achieve syner- passive role adapters to a view of these man-
gies in bundling these practices to influence agers as active role creators. The competency-
the corporate global mindset advantageously. based perspective suggests the development
When this SGHRM system is designed in a of expatriates and inpatriates as bundles of
firm-specific way, it helps to insure that the interrelated resources, capabilities and com-
strategic competencies of the organization petencies can be viewed as the accumulation
are unique due to the personnel in the sys- of compound assets (Schendel, 1994). The
tem. The competency-based perspective of relationship among these complementary sets
the SGHRM system examined in this paper, of global HR practices may diversify the stra-
posits that a pool of managerial capital in a tegic orientation of the corporate TMT, expand
global organization can be leveraged to pro- the repertoire of the TMT strategic choices,
vide a source of competitive advantage pro- and, eventually affect competition leading to
vided the pool is a unique, firm-specific a sustainable advantage.
bundle of competencies. Future research should address the con-
Performance effects generated by this com- textual influences on SGHRM staffing systems
petency-based SGHRM system are value-add- particularly the influence of the configuration
392 HUMAN RESOURCE MANAGEMENT, Winter 2000

of the firms resources, corporate culture, leadership are critical particularly in strate-
and organizational learning as well as the gic alliances and joint ventures as well as,
influence of controls employed in global di- in the long run, in TMT succession plans.
versification strategies. A more specific line The proper integration of a transcultural em-
of research could address the design of an phasis in the leadership development of ex-
inpatriation process in global organizations patriate- and inpatriate-led global teams is
in terms of their structure, incentives, com- likely to be the most intriguing future re-
munication processes, and member compo- search topic related to the SGHRM staffing
sition. The issues of global strategic systems development.

MICHAEL G. HARVEY (Ph.D., University of Arizona) holds the Puterbaugh Chair in Ameri-
can Free Enterprise and is Professor of Global Business Policy in the Michael F. Price
College of Business at the University of Oklahoma, Norman, Oklahoma.

MILORAD M. NOVICEVIC (Ph.D. candidate University of Oklahoma) is an Assistant Pro-

fessor of Management at the University of Wisconsin at LaCrosse. He has previously
published in Human Resource Management Journal, The International Journal of Hu-
man Resource Management, Human Resource Management Review, Journal of World
Business, and Human Resource Planning, among others.

CHERI SPEIER is an Assistant Professor at Michigan State University. Her research

interests include the influence of work environments on decision making, human re-
source issues associated with information systems, individual and group acceptance
and use of technology, and the effective management of knowledge workers in virtual
environments.

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