Chapter01 (1)

Use with International Human Resource Management ISBN 1-84480013-X

Published by Thomson Learning © Peter Dowling and Denice Welch 1/1

Chapter 1Introduction:

The enduring context of IHRM



Chapter objectives

In this introductory chapter, we establish thescope of the textbook. We:• define key terms in international human

resource management (IHRM)• outline the differences between domestic

and international human resource management and the variables that moderate these differences(cont.)



Chapter objectives (cont.)

• discuss trends and challenges in the global work environment and the enduring context in which IHRM functions and activities are conducted – including the way in which forces for change affect the operations of the internationalizing firm and have consequences for the management of people in the multinational context.



Figure 1-1: Inter-relationships between approaches in the field



Figure 2-1: A model of IHRM



HR activities slide 1

• Human resource planning• Staffing

–Recruitment–Selection–Placement

• Training and development



HR activities slide 2

• Compensation (remuneration) and benefits

• Industrial relations

Figure 2-2: Stages of internationalization



What is an expatriate?

• An employee who is working and temporarily residing in a foreign country

• Some firms prefer to use the term ‘international assignees’

• Expatriates are PCNs from the parent country operations, TCNs transferred to either HQ or another subsidiary, and HCNs transferred into the parent country



Figure 1-3: International assignments create expatriates



Differences between domestic and international HRM

• More HR activities• The need for a broader perspective• More involvement in employees’ personal

lives• Changes in emphasis as the workforce mix

of expatriates and locals varies• Risk exposure• Broader external influences



Figure 1-4: Variables that moderate differences between domestic and international HRM



The ‘top ten’ multinationals

1. Rio Tinto (UK/Australia)

2. Thomson Corporation (Canada)

3. ABB (Switzerland)4. Nestlé (Switzerland)5. British American

Tobacco (UK)

6. Electrolux (Sweden)

7. Interbrew (Belgium)

8. Anglo American (UK)

9. AstraZeneca (UK)

10. Philips Electronics (The Netherlands)

UNCTAD Index of Transnationality



Figure 1-5: Factors influencing the global work environment



Forces for change

• Global competition

• Growth in mergers, acquisitions and alliances

• Organization restructuring

• Advances in technology and telecommunication



Impacts on multinational management

• Need for flexibility

• Local responsiveness

• Knowledge sharing

• Transfer of competence



Managerial responses

• Developing a global ‘mindset’

• More weighting on informal control mechanisms

• Fostering horizontal communication

• Using cross-border and virtual teams

• Using international assignments



Chapter summary

This chapter has established the scope of thisbook. We have:• Defined international HRM and the term ‘expatriate’.• Discussed the differences between domestic and international

HRM – looking at six factors: more HR activities, the need for a broader perspective, more involvement in employees’ personal lives, changes in emphasis as the workforce mix of expatriates and locals varies, risk exposure and more external influences.(cont.)



Chapter summary (cont.)

• Examined what we have called the enduring context of IHRM. The focus is on the current global work environment, looking at the forces for change that have prompted managerial responses that have implications for the way in which people are being managed in multinationals at the turn of the 21st century. However, we have made a brief comparison with the situation that confronted a 14th-century merchant as a way of drawing out some of the constants in international business.

This treatment has enabled us to provide an overview of the field of IHRM and establish how the general environment affects IHRM. The next chapter examines the organizational context where we explore how IHRM activities are determined by, and influence, various internal changes as the firm internationalizes.

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Chapter01 (1)