Introduction What is IHRM?

What is the study of HRM?

• The study of HRM, which has evolved from what used to be called ‘Personnel
Management’, incorporates a consideration of how organizations plan and manage their
staff.
• International HRM takes all the aspects of the Harvard Model and applies an
international approach to the discipline

What is International Human Resource Management

International HRM: is about the worldwide management of human resources. The field of
IHRM is about understanding, researching, applying and revising all human resource activities in
their internal and external contexts. In particular as they impact the processes of managing
human resources in organizations throughout the global environment to enhance the
experience of multiple stakeholders.

The difference between HRM and IHRM

While a domestic HR role is usually concerned only with the employee, IHRM may well find it
takes responsibility for aspects of the expatriate’s personal life and/or their accompanying
family and their needs.

Some examples of this broader perspective are:

 Problems associated with designing and administering programs for more than one
nation
 Equity issues can arise when employees of various nationalities work together
 Resolution of these equity issues can be one of the major challenges in the international
HRM field

Some reasons for this are:

 Major reason for expatriate failure on assignment is because the spouse and family do
not adapt.
 Must become involved in employees personal life
 Housing and schooling can become issues
 May become involved with family members left behind in the home country
 In very remote locations may even be expected to organise recreational programmes

Risk factors
 Consequences of failure in the international arena are more severe than the domestic
arena
 Terrorism - firms pay 1- 2% of their revenue on protection
 Civil unrest - emergency evacuation procedures
More External Influences:
 The type of government
 The state of the economy
 Generally accepted practices of doing business in the host countries

During the course we will be discussing the IHRM approaches in the following sub-topics:
 Planning for IHRM assignments
 Recruitment and Selection
 Performance Management
 Training and development
 Compensation and Benefits
 Labour Relations
 Expatriate Development and Career Management

Definitions of HRM terms

• Strategic HRM: is the term used to indicate that HRM policies and practices are aligned
and developed to support the organization’s broad strategy.
• Domestic HRM
• International HRM

Contextual or Comparative IHRM

is a term used to describe the study of HRM as it is practiced within different countries,
primarily in their domestic organizations.

Terminology used in IHRM

IHRM strategies have to make choices about how staff are sourced and managed in many
different national environments. There are three groups which are:
1. Parent Country National or PCN:
• expatriate can be drawn from the parent company or parent country
national.
2. Host Country National or HCN:
• local people are employed in the overseas subsidiaries of a company.
• they are managed locally, with little interference from headquarters.
3. Third Country National or TCN:
• in that they come neither the company’s home base nor from the host
country location

Organizational orientations and IHRM

The effects of EPRG model on strategy, international HR policies, and the structure of the
organization are briefly summarized below, nothing that each orientation reflects the dominant
view of the enterprise:
  Ethnocentric orientation
Strategy: global integration
HR practices: PCNs are developed for key positions worldwide
Structure: hierarchical product divisions.
 Polycentric orientation
Strategy: national responsiveness
HR practices: HCNs are developed for key positions in their own country
Structure: hierarchical area divisions with autonomous national units.
 Regiocentric orientation
Strategy: regional integration and national responsiveness
HR practices: people from a region are developed for key positions in that region (e.g.
Eastern Europe, Asia-Pacific, Gulf Region etc.)
Structure: product and regional organization tied together through a matrix structure.
 Geocentric orientation
Strategy: global integration and national responsiveness
HR practices: the best people (whether PCN, TCN, or HCN) are developed for key
positions worldwide
Structure: a network of organizations ( in some cases this includes stockholders and
competitors).

Important debates of IHRM

Convergence vs. divergence
This is a major concern for international managers as they have to make decisions about how to
manage across the world. Convergence means the degree to which there is a move to the same
way of operating across the world. Divergence or differentiation concerns the extent to which
operational practices remain different across the world. This could be because of national
institutional and/or cultural differences.

Universalist vs. contextual approaches

• The universalist approach – this reflects the mainstream thinking of American authors
which considers the Multi-National Enterprise to be the main focus of the research and
practice of IHRM. They are constantly seeking to find the ‘one best way’ to manage
through the MNE
• The contextual approach – this reflects the approach from the UK and European
authors. These authors consider that IHRM moves beyond the firm and includes
contextual factors – both cultural and institutional. This approach is about going beyond
looking for ‘one best way’. Rather the best way to manage will be to find a ‘best fit’
which will depend primarily on the factors existing in the context/environment of the
firm.