ABSTRACT
This chapter examines the challenges facing ABB from the historic perspective of internationalization of the firm and the concomitant evolution of human resources management (HRM). It also examines the concept of the transnational organization, at the heart of which is the notion of contradiction, and explores the implications for people management. The Industrial Revolution originated in Britain in the late eighteenth century. The emergence of the factory system in Europe and the US had a dramatic impact both on international business and on the management of people. As the ABB story illustrated, the failure of structural solutions to address the problems of coordination and control led to an increased focus on how HR practices might assist in providing cohesion to the multinational firm. HRM and strategy came together in the transnational concept, which helped to dissolve many of the traditional boundaries in organizational thinking. Today, the strategic importance of international HRM is widely recognized.
