long term strategy. Top management’s role of leveraging corporate performance
makes sure that the company survives in the short run. To do so, top manage-
ment balances the different co–ordination devices (formalization, centralization
and socialization) to achieve the mix that maximizes corporate performance. A
focus both on the long term mission and on short-term performance, however,
can lead to a loss of flexibility if taken to the extreme. Therefore, the third role
of top management is to ensure continual renewal. Goals and values have to be
adaptive; they are continually questioned and challenged to achieve the flexi-
bility that is vital in a transnational environment.
CONCLUSION
In Section 1 we argued that international HRM has moved beyond the infancy
stage of development and outlined a number of key reasons for the emergence
and growing significance of international HRM. In Section 2 we examined the
links between strategy and international HRM and reviewed some influential
models of international HRM outlining progress towards developing theoreti-
cal models of IHRM (De Cieri and Dowling, 1999). The trend over recent years
has been to extend the linkage of HRM with business strategy from the domes-
tic into the international arena and we argue that international HRM must be
linked to the strategic evolution of the firm. The international HRM models
suggest that MNCs will gain competitive advantage by using strategic HRM
practices to support business objectives; however, we noted the need for more
empirical research in this area (Harzing, 1999). In Section 3 we examined the
role of the corporate HR function in the international firm and highlighted the
fact that the role and activities of the HR function at the centre varies in dif-
ferent types of international firm. This analysis suggests that international
HRM strategy should vary considerably in different types of international firms
and needs to be understood in relation to the tensions between integration and
differentiation (Pralahad and Doz, 1987). In Section 4 we identified global
management development as a critical area for international human resource
management. The challenge of internationalizing local managers was identi-
fied as a key issue, and we also considered the various constraints on the sup-
ply of international managers which are leading to shortages of international
managers and constraining the internationalization strategies of firms. Finally,
Section 5 considered what we term the main challenge for international HRM –
developing truly transnational managers. The roles and responsibilities of
transnational managers were identified and shown to vary for different parts of
the organization. Using the work of Bartlett and Ghoshal (2000) we distin-
guished three different management forms: global business management,
worldwide functional management and geographic subsidiary management. In
82 International Human Resource Management