HR Case Study on Pacific Brands - Part 5 (Final)

SIHRM Issues

Pacific Brands needs to be aware of the level of autonomy it will grant the local unit, how much control it will enforce, and how it will coordinate the unit. As discussed earlier, Pacific Brands is undertaking a cost-reduction strategy and therefore to successfully implement the strategy the company must monitor and closely control employee activities while still however being responsive to local needs of the unit (flexibility in the level of autonomy provided and control over the unit).

SIHRM Functions

The Functions of SIHRM are comprised of three areas which are: the MNE’s HR orientation; the time, energy and financial resources devoted to operating the HR organisation in the MNE and the location of those resources and the HR organisation. Pacific Brands needs to ascertain the most efficient management of its HR with its competitive strategy of ‘cost-reduction’ in mind. Equally as important is the extent of time, energy and financial resources. Under a ‘cost-reduction strategy’ it could be said that this area is crucial because if the costs, time and energy are too high then the full potential of the strategy will not be realised and Pacific Brands will loose its competitive advantage in implementing the strategy. The location of SIHRM operations according to Schuler et al. (1993) can vary considerably across MNEs from the headquarters to the local units.

When recruiting and selecting employees, preferred behaviours for employees such as predictable behaviour, short-term focus, individual activity, high concern for quantity of output/results were desirable and HR practices that maximise efficiency by enabling management to monitor and closely control employee activities are essential.

A SIHRM integrative framework was discussed and it was suggested Pacific Brands needs to link its organisational units together in a cost effective and efficient way, consider how much autonomy each unit will have, being locally responsive and flexible, and matching and adapting HR practices to the local culture and legal system.

Pacific Brands has made the decision to implement the ‘cost-reduction strategy’ to remain competitive and survive, but if economic conditions continue to deteriorate it could be said that it is increasingly important that they strategically implement their strategy in the most effective and efficient way in order for the MNE to be flexible to changing economic conditions in order to remain globally competitive.

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