International Human Resource Managemen1

7/31/2019 International Human Resource Managemen1

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INTERNATIONALHUMAN RESOURCEMANAGEMENT

ANJALI VERMAROLL NO. 07

SECTION-P4


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INTRODUCTION TO IHRM

MEANING

It is not easy to provide a precise definition of internationalhuman resource management (IHRM) .A MultinationalCorporation varies from firm to firm. It also depends on

whether the manager is located in a global corporationsheadquarters or onsite in a foreign subsidiary.

Broadly defined, international human resourcemanagement (IHRM) is the process of procuring,allocating, and effectively utilizing human resources in amultinational corporation. If the MNC is simply exporting

its products, with only a few small offices in foreignlocations, then the task of the international HR manager isrelatively simple. However, in global firms human resourcemanagers must achieve two somewhat conflicting strategicobjectives. First, they must integrate human resource

policies and practices across a number of subsidiaries indifferent countries so that overall corporate objectives can

be achieved. At the same time, the approach to HRM mustbe sufficiently flexible to allow for significant differencesin the type of HR policies and practices that are mosteffective in different business and cultural settings.


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Definition: International HRM (IHRM) - HRM issues and

problems arising from the internationalization of business,

and the HRM strategies, policies and practices that global

firms pursue in response to the internationalization process.

Typically celebrates a Western management and

hegemonic culture.

Definition: strategic IHRM - HR policies and processes

that result from the global competitive activities of MNCs

and that explicitly link international HR practices and

processes with the worldwide strategic goals of those

companies.

Defining International HRM from the perspective of a

multinational firmBefore offering a definition of international HRM, weshould first define the general field of HRM. Typically,HRM refers to those activities undertaken by anorganization to effectively utilize its human resources.These activities would include at least the following: Human resource planning

Staffing Performance management Training and development Compensation and Benefits Labor relations


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SCOPE

International Human Resource Management: ScopeThe scope of IHRM is very wide:

1. Personnel aspect-This is concerned with manpowerplanning, recruitment, selection, placement, transfer,promotion, training and development, layoff and

retrenchment, remuneration, incentives, productivity etc.

2. Welfare aspect-It deals with working conditions andamenities such as canteens, crches, rest and lunch rooms,housing, transport, medical assistance, education, healthand safety, recreation facilities, etc.

3. Industrial relations aspect-This covers union-management relations, joint consultation, collective

bargaining, grievance and disciplinary procedures,settlement of disputes, etc.


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SCOPE OF IHRM


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MODEL OF IHRM

Host Country National (HCN): Belongs to the Country

where the subsidiary is located

Parent Country National (PCN): Belongs to the

Country where the firm has its headquarters

Third Country Nationals (TCN): Belongs to any other

country and is employed by the firm


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GLOBAL WORKFORCE

Human capital available in the international arena and

across national borders

Study important for understanding the supply and demand

for labour.

Crucial when formulating people-management strategies

both locally and internationally.

Essential in order to develop a comparative perspective onsupply and demand for labour as well as conditions and

terms of employment and work in an international context.


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International context

Global patterns of change, continuation, unification anddiversification in the management of people.

Mainstream texts: Focus on industrialized countries and

blocs such as the USA, the EU, Canada, Japan and

Australia.

Growing body of research on employment and

management systems in developing and less-developed

countries.

National context

Employment law, unions, society, culture and

professionalization.

Linkages between HRM effectiveness and the social

context (culture, climate and the political environment of

an organization)

Professionalization of HRM at the national level


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Strategic issues

Well-documented and developed area of academic study

Strategic international human resource management

(SIHRM): Research relatively sparse.

Operational issues

Acceptable and formal methods of HRM display diversity

across national borders.

Recruitment - selection, education - training, expatriation -repatriation, participation - involvement, pay - conditions,

promotion, reward, career development, retirement, and

downsizing of an international workforce.

The Future

Qualitative, valuebased and ethical dimensions of IHRM,

highlighting the significance and long-term relevance of

value-based decision-making in IHRM practice.

Trends, dilemmas and challenges facing IHRM


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Professional Competencies

IHRM interact in more diverse and dynamic environmentsthan their counterparts who are responsible from single-

country operations.

Competencies expected of an international human resource

manager: learning and knowledge skills to transferable,

affective and people-management skills

Cross-national and sectoral distinctions within such

competencies

IHRM Career

Education, training and development of international

human resource managers

Career development

Patterns of employment

Key concerns in management of such a careerfrom individual as well as organizational

perspectives.


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Differences between Domestic and International

Human Resource Management

More HR activities: taxation, culture orientation,

administrative services

The need for a broader perspective: cater to multiple needs

More involvement in employees personal lives:adjustment, spouses, children

Changes in emphasis as the workforce mix of expatriates

and locals varies: fairness

Risk exposure: expatriate failure, terrorism

Broader external influences: government regulations, waysof conduct

Complexity involved in operating in different countries,

varied nationalities of employees

The different Cultural Environment

The industry or industries with which the MNC is involved

Attitudes of Senior Management

Extent of reliance of MNC on home country domestic

market


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When compared with domestic human resource

management, IHRM requires a much broader perspectiveon even the most common HR activities. This isparticularly so for HR managers operating from a MNCsheadquarters (HQ). The number and variety of IHRMactivities are daunting. International HR managers mustdeal with issues as varied as international taxation;international relocation and orientation; various other

administrative services for expatriates; selecting, trainingand appraising local and international employees; andmanaging relations with host governments in a number ofcountries around the world.

Even when dealing with one particular HR function areasuch as compensation, the international HR manager is

faced with a great variety of national and international payissues. For example, while dealing with pay issues, theHQ-based HR manager must coordinate pay systems indifferent countries with different currencies that maychange in relative value to one another over time. AnAmerican expatriate in Tokyo who receives a salary of$100,000 may suddenly find the buying power of thatsalary dramatically diminished if the Japanese yenstrengthens in value relative to the US dollar. A US dollar

purchased 248 yen in 1985, but less than 110 yen in 2000.


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Variables that Moderate Differences betweenDomestic HR and IHRM


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FORCES OF 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


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Factors that Influence the Global Work Environment

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International Human Resource Managemen1