Managers and researchers recognize that the tensions created by the interplay of globalization and national environments influence the behaviors of multinational enterprises (MNEs). In order to develop a model that is useful for understanding the effects of the global and local host environments on managerial compensation, we undertook a grounded theory building study of managers in several multinationals. We use the information gained to extend two contemporary perspectives of IHRM: national culture, and strategic alignment. We develop the idea that it is the relative degree of variation (flexibility) within the local host context that is critical to understanding managers' ICRS decisions. We present a different, pragmatic experimentation view of managers' ICRS decision making, which we believe offers insights into the effects of the interplay of the MNE pressures to create integrated global systems and the pressures generated within the local host environments.