A process perspective on transnational HRM systems — A dynamic capability-based analysis

Research on transnational Human Resource Management (HRM) has mainly concentrated on the content of transnational HR practices but has largely neglected strategic processes that balance requirements for global standardisation and local adaptation in HRM systems (HRMS). This paper addresses this research deficit and offers a dynamic capability-based analysis explaining the processes that shape transnational HRMS and their potential contribution to the generation of competitive advantages. The concept of balancing capabilities is introduced in order to describe those processes that lead to a specific balance with respect to the global standardisation/local adaptation dilemma. In order to explain balancing capabilities in a detailed manner, the main focus is placed on the coordination of international HRM. Coordination explicitly considers the notions of information, communication and social presence, as well as learning aspects within multinational enterprises. In addition, the following analysis allows the systematising of various devices regarding their intensity and appropriateness for different international strategies. These new arguments are framed by a cognitive process model developed in strategic management research that covers the identification of challenges to transnational HRMS as well as potential solutions. ► The dynamic capabilities perspective allows for an innovative view on IHRM processes and provides deep insights. ► Balancing capabilities drive the development and the implementation of IHRM systems. ► A multitude of balances between global standardisation and local adaptation exists depending on internal and external influencing factors. ► Information, communication, (in-) direct social presence and learning aspects build essential coordination elements within IHRM. Their use varies according to the balancing needs.