Proponents of life-cycle models argue that there is a link between the variation in MNC HRM
policies and practices and either the product life cycles in companies or the organizational life
cycle in these organizations. For Adler and Ghadar (1990, 1993) the different internationalization
strategies of an MNC and the corresponding HRM strategies (expressed by different degrees
of integration and differentiation of practice) are related to internationalization phases dependent
on the organization's product life cycles with a "fit" required between the HRM system and these
cycles. Milliman et aI. (1991) extended the model by Adler and Ghadar (1990) principally by looking
at organizational life cycles rather than product life cycles. They argued that product life cycles
are difficult to apply to MNCs because in many sectors (for example, high technology industries)
products have a short life cycle and in any event typically MNCs have multiple products each at
different stages of their life cycle. Drawing upon work by Miller and Friesen (1980,1984) that differentiates
between four stages of organizational development (birth, growth, maturity, and revival)
they outlined phases of organization initiation, functional growth, controlled growth, and strategic
integration. In each of these organizational development stages different levels of external fit
(between HRM activities and the MNC business context) and internal fit (between the different
HRM functional areas) are necessary. Consequently human resource flexibility becomes central to
effective internationalization, and is dependent upon the capacity of HRM to facilitate the ability
of the organization to adapt to changing demands both from within the MNC or the MNC's context
both effectively and in a timely manner (Milliman et aI., 1991).
Life-cycle models can be criticized on three main grounds: