international HRM policy and practice in multidomestic and transnational or
globally integrated firms (Kobrin, 1992). Other researchers link international
HRM staffing policy and practice to strategy (Edstrom and Galbraith, 1977;
Scullion, 1996) while yet others suggest linkages between the product life cycle
stage/international strategy and HRM policy and practice (Adler and Ghadar,
1990; Milliman et al., 1991). Increasingly the central issue for MNCs is not to
identify the best IHRM policy per se but rather to find the best fit for the firm’s
strategy, structure and HRM approach. While global strategy is a significant deter-
minant of IHRM policy and practice, it has been argued that international
human resources are a strategic resource, which should affect strategy formula-
tion as well as its implementation (Harvey, 1997). In this section we will exam-
ine two classic models of strategic international human resource management:
Adler and Ghadar’s phases of internationalization and the De Cieri and Dowling
integrative framework of strategic HRM in MNCs.
Adler and Ghadar’s phases of internationalizationAdler and Ghadar’s model (1990) is based on Vernon’s life cycle theory (1966).
Vernon distinguishes three phases in the international product life cycle. The
first phase (‘high tech’) focuses on the product, research and development
(R&D) playing an important role as a functional area. The second phase
(‘growth and internationalization’) concentrates on developing and penetrating
markets, not only at home but also abroad. The focus therefore shifts from R&D
to marketing and management control. In the third and final phase (‘maturity’),
intense efforts are made to lower prices by implementing cost control measures.
According to Adler and Ghadar (1990: 239), the average length of the prod-
uct life cycle shortly after the Second World War was 15–20 years. Nowadays this
is 3–5 years; for some products it is as short as 5 months. An important impli-
cation is that the various areas of emphasis in Vernon’s life cycle must increas-
ingly be dealt with simultaneously. Adler and Ghadar saw this as sufficient
reason to suggest a fourth phase (incidentally following in the footsteps of
Prahalad and Doz and Bartlett and Ghoshal as discussed in Chapter 2), in which
the company must achieve differentiation (as a way to develop and penetrate
markets) and integration (as a way to achieve cost control). Having introduced
a fourth phase, the authors then proceed to develop a model in which cultural
aspects and human resource management form the main focus of attention. In
short, they link Vernon’s phases, which concentrate largely on strategic and
structural issues, to culture and human resource management.
The influence of culture
According to Adler and Ghadar (1990), the impact of the cultural background
of a country or region differs from one phase to the next. They identify these
phases as:
68 International Human Resource Management