Chapter 1 IHRM BASICS

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Chapter 1

Introduction:The Enduring Context of

IHRM

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The Year of Rooster, 4702

Happy New Year!

01/31/1957 to 02/17/1958 (Fire)

02/17/1969 to 02/05/1970 (Earth)

02/05/1981 to 01/24/1982 (Metal)

01/23/1993 to 02/09/1994 (Water)

02/09/2005 to 01/28/2006 (Wood)

01/28/2017 to 02/15/2018 (Fire)

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Chapter Objectives In this introductory chapter, we establish the

scope of the textbook:Define key terms in IHRMOutline the differences between domestic HRM and IHRMIdentify the variables that moderate these differences And 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.

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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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Interrelationships between Approaches to the Field

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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

Global flow of HR


International Assignments Create Expatriates:


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


Variables that Moderate Differences between Domestic HR and IHRM


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)Source: UNCTAD Index of Transnationality


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


Factors that Influence the Global Work Environment


Chapter Summary (cont.)

We have established the scope of the textbook: Defined IHRM and the term “expatriate”. Discussed major differences between domestic

HRM and IHRM – looking at six factors: More HR activities 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


Chapter Summary (cont.)

Examined the enduring context of IHRM. The focus is on the current global work environment, looking at forces for change, requirement for MNE and managerial responses that have implications for the way in which people are being managed in multinationals at the turn of the 21st century.

This treatment has enabled us to provide an overview of the field of IHRM and to 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.

This treatment has enabled us to provide an overview of the field of IHRM and to 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.

Chapter 1 IHRM BASICS

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