Chapter 1

Introduction:
The Context of IHRM

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Three Approaches to IHRM
 Cross-cultural management
 Examine human behavior within organizations
from an international perspective
 Comparative HRM and Industrial Relations
 Seeks to describe, compare and analyze HRM
systems and IR in different countries
 HRM in multinational firms
 Explore how HRM is practiced in
multinationals

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The General Field of HR
 Major Functions and Activities
 Human resource planning
 Staffing
 Recruitment
 Selection
 Placement
 Performance management
 Training and development
 Compensation (remuneration) and benefits
 Industrial relations

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What does IHRM add into the
Traditional Framework of HRM?
 Types of employees
 Within and cross-cultural workforce diversity
 Coordination
 Communication
 Human resource activities
 Procurement
 Allocation
 Utilization of human resources
 Nation/country categories where firms expand and
operate
 Host country
 Parent country
 Third country
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A Model of IHRM

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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

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International Assignments Create
Expatriates:

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Differences between Domestic HRM
and IHRM
 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

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Cultural environment of International
Business
Education
Human Capital
Primary/secondary
Vocational
Professional
Literacy

Values Social structure

Communication
Work Ethic Family Religious Beliefs
Languages
Time orientation Mobility Denominations
Nonverbal
Individualism Nationalism Rituals
Media
Risk propensity Urbanization Holy days
Technology
Achievement Materialism

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Variables that Moderate Differences
between Domestic HR and IHRM

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Managing cross Borders
 Global
 Views the world as a single
market; operations are
controlled centrally from the
corporate office
 International
 Uses existing capabilities to
expand into foreign markets
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 Transnational
 Specialized facilities permit
local responsiveness;
complex coordination
mechanisms provide global
integration
 Multinational
 Several subsidies operating
as stand alone business
units in multiple countries
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Impacts on Multinational Management & Impact of Globalization on
HRM

 Need for flexibility  Impact on employment

 Local responsiveness
 Knowledge sharing
 Transfer of competence
 Impact on Human
Resources development
 Impact of compensation
 Impact on Trade union-
Liberalisation,Globalizat
ion, Privatization
 Other effects- Quality
circles,empowerment,fle
xi time etc

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Factors that Influence the Global
Work Environment

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STRATEGIC TARGETS ADDRESSED BY AN INTERNATIONAL
ASSIGNMENT

 To improve business performance

 Share the cultural view
 To break down barriers between the parent company and subsidiaries
 To solve technical problems
 To develop the top talent and future leaders of the company
 To open new international markets
 To control business improvements initiatives
 To reduce the risks
 To improve team skills
 To implement knowledge practices
 To develop, share and transfer best practices
 To improve business relationships
 To develop networking processes
 To develop international leadership
 To control financial results.

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