Concerning this aspect, the framework incorporates two vital aspects i.e. global integration of the value chain activities and manufacturing of products along with processes in correspondence with the needs of the local market (Cieri & et. al., 2005). In accordance with the context of IHRM, certain prevalent issues can be apparently observed that entail cultural diversity, people management and employee relation among others (Taylor, 2007).
Keeping up with these issues, this essay intends to discuss about the various structures being followed by the MNCs/MNEs in order to mitigate the global challenges associated with the applicability of the IHRM. The essay will further discuss upon the IHRM designs been adopted by MNCs and the benefits associated with the structure being framed. Apart from this, the essay will also discuss about various strategies that pursue by the MNEs for global development.
According to Howard Perlmutter’s theory, three patterns of MNCs can be reflected. In this regard, ethnocentric orientation reflects about the management intentions in employing national employees rather than non-native employees. In this respect, the management has the perception that the internal employees are capable of handling operations along with the issues pertaining to the international level. One of the advantages of such orientation is that the valued position is being occupied by the talented nationals rather than the external employees. Apart from this advantage, one of the drawbacks associated with this model is that the MNEs get deprive of practicing diversified culture. Furthermore, the MNEs also get deprive of knowledge from the external source, thereby facing the challenge of international short sightedness. This might create hurdle in mitigating the required global demands (Perlmutter, 2010). One such MNC, which can be apparently observed to comply with ethnocentric orientation in the form of practicing diversified culture, is Hong Kong