The nature of international integration and human resource policies in multinational companies

In this article we demonstrate that the literature concerning multinational companies (MNCs) and employment relations has failed to develop a convincing explanation of variation in the extent to which MNCs develop a global element to the management of their international workforces. We argue that whether MNCs have an incentive to develop international human resource policies is shaped by the extent and nature of international integration, which we define as the commonalities and inter-dependencies in the production process across borders. In particular, we identify three aspects of the integration of MNCs that are crucial in this respect: whether the firm pursues financial economies or synergistic linkages from its international operations; whether it segments or replicates its operations across countries; and whether it standardises or differentiates its product internationally.