On Globalising HRIS

Firstly, let understand about the definition of globalization. Globalization is the tendency of investment funds and businesses to move beyond domestic and national markets to other markets around the globe, thereby increasing the interconnectedness of different markets. Globalization has had the effect of markedly increasing not only international trade, but also cultural exchange. In short, we can say that globalization is an integration of business activities across geographical and organizational boundaries.

In HRIS Models, there are 3 different strategic needs that drive organisations in selecting each model. There are local differentiation, global integration and leveraging worldwide innovation and knowledge sharing. 

Besides, in globalizing HRIS, there are 3 types of models which is multinational model, global model and international model.

Multinational model is an organizational model that consists of the subsidiaries in each country in which a company does business with ultimate control exercised by the parent company such as Toyota, KFC, and Adidas.

Global model is characterized by centralized decision making and tight control by the parent company over most aspects of worldwide operations; typically adopted by organizations that base their global competitive strategy on cost considerations.

International model is composed of a company’s overseas subsidiaries and characterized by greater control by the parent company over the research function and local product and marketing strategies than is the case in the multinational model like Tesco.

Then, what is the meaning of the transnational system? It is achieve cost economies, basing other functions in the company’s national subsidiaries to facilitate greater local responsiveness, and fostering communication among subsidiaries to permit transfer of technological expertise and skills. In short, transnational system will increase complexity, diversity, and volatility. In transnational system, there are 3 critical components:

1.       Global efficiency

Benefit: succession planning, training course design, retirement program management

2.       Local flexibility

Benefit: competency management, rewards, salary and financial incentives, and the delivery of training programs.

3.       Innovation / sharing

 Benefit: compensation program design, business process design and product or service development.

Besides, the transnational system has 3 models which are standalone system model, data warehouse model, and single integrated model.

1.       Standalone system model – interdependent system

2.       Data warehouse model – shared knowledge and application

3.       Single integrated system model – corporate with headquarters (HQ), “one-size-fits-all”