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MNC's labour utilisation strategies: Individual and organisational perspectives

Debra da Silva

For many companies, the successful management of employees whose job function necessitates mobility across different geographies is an important part of the success of their overseas commercial activities. However, it seems that increasingly organisations are seeking alternatives to the long-term international assignment, which raises at least two questions: firstly, can the purposes of a long-term assignment be met by an alternative type of assignment, and secondly, are international assignments and assignees of any type always necessary?

This thesis proposes a conceptual model based on a configurational perspective of the HR architecture of an MNC. This research broadens the issue of expatriate management to examine the HR architecture of the entire MNC, from the perspectives of both the organisation and the employee. The employees of the MNC are characterised by two primary criteria: their identity orientation with the organisation (internal or external) and their strategic mobility (single-geography and multi-geography).

The methodology applied to test the proposed model is a case study of TechCo employees in the Asia Pacific region. The research design is a combination stock and flow methodology. Information on representative cohorts of each of the four categories of employees tested the stocks in the model. Mapping the flows in the model identified how employees move between each of the categories. The research design was based on issues of organisational commitment and identity, geographic mobility, and socio-demographic information.

The analysis of variance and discriminant function analysis applied in this study found support for the existence of HR architecture for MNCs (H1). The resultant four types of employee groups were demonstrated (through an analysis of variance) to be distinct in their characteristics. Further investigation using discriminant function analysis demonstrated that several categories of variables were significant in differentiating the four groups: notably previous mobility experiences, organisational factors, HR factors and social identity and contact.

Data from the in-depth interviews provided support for all three remaining hypotheses. Specifically, it was found that H2 was confirmed in so far as resources only enter the model from the external market as domestic employees, transient employees, and free agent employees. International employees did not enter TechCo directly from the external market. There was also support for H3: that there are existing flows of resources between domestic employees and international employees, and from transient employees to domestic employees. Partial support was found for H4, but the proposition that there are emerging flows from free agent employees to international employees was not supported.

An analysis of the flows within TechCo provided a great deal of insight and understanding as to the key issues determining the resource allocation, development and flows within an MNC. Such issues may not have been apparent with only an assessment of TechCo's stock of human capital allocations, or by focusing on just one narrow aspect of the company's overall HR architecture.

This study demonstrates numerous limitations that need to be addressed in further research efforts. For example, the naturally small and difficult to identify groups of the model (free agents) as well as the weaker findings for some of the factors will necessitate revised research design and implementations. To this end, expanding the research beyond a single case study is advocated.

Most importantly, this research improves our understanding of the issue of physical, psychological and employment mobility in the workforce as a series of more complex inter-relationships. In contrast to the pre-existing simplistic understanding of expatriate assignments, MNCs understand their total workforce as being fluid and dynamic. Secondly, the research extends our knowledge and understanding of the operational aspects of MNCs in facilitating these fluid workforces. It provides an empirically grounded study of how employees move between segments, through 'gates' and how these gates can be facilitated by HR processes.


Professor Russell Lansbury