TRANSNATIONAL HR SYSTEMS

           Transnational model embodies many of principles and provides the foundation for transitioning the global HR organization to meet the challenges of the paradox: it is responsive to local needs, cooperative for global activities, innovative to new ideas, and flexible to change. The four basic structures or models that organizations manifest in their global development are multinational; global; international; and transnational.

A Multinational organization is one that is highly decentralized, consisting of numerous independent local business units and little control at the center which is generally not much more than financial oversight. Therefore, their central management’s role is informal. The decision making are localized as within each independent organization are delineated by national boundaries. This type of organizational model is suitable for large companies in which there is little benefit to be gained from centralized processing or decision-making.

A Global organization is one that is highly centralized and standardized, minimizing the needs of the local business units in favor of one single, uniform operating environment with the “one-size-fits all” approach. The Global organization views overseas operation and therefore this approach are suitable to minimize the needs of local, national, and regional business units. It focuses on efficiency for greater volume and promote the integration.

An International organization, while still largely centralized, takes learning and sharing approach by adopting innovations from local business units, integrating them into the global business model and rolling them back out throughout the organization. The whole organization benefits when advances made in one country are shared immediately across all the others. This model shares best practices across local business units.

A Transnational organization is a networked structure with no centralized “controlling” unit, but with a well-defined set of centralized “coordinating” and “cooperative” processes that govern how the organization functions. This type of organization is “enabling” and “self-organizing” which exemplifying effectiveness without being controlling and coercive. This model is particularly useful for large, multinational companies with heterogeneous cultures under significant competitive pressures due to the increasing globalization.

            In their global evolutionary development, it has been stated, that organizations evolve from a purely domestic stage through the Multinational and Global stages, then to the International stages, and ultimately to the Transnational stage. It is important to keep in mind that “best practices” are relative and can only be understood, appreciated, and implemented in the appropriate setting.

Reference: Beaman, K.V. The New Transnational HR Model: Building a Chaordic Organization