Chapter 1 introduction to ihrm

International Human Resource Management

Managing people in a multinational context

Preeti Bhaskar Symbiosis Center for Management Studies,

Noida

v

IHRM Chapter 1

• Meaning and scope• Globalization• Dimensions of IHRM• Objectives of IHRM• Difference between domestic HRM and IHRM• International assignments• Significance of IHRM in International Business• Challenges of IHRM• HRM practices in different countries.

Chapter Outline

2IHRM Chapter 1IHRM Chapter 1

v

International Imperative

Why organizations expand Internationally


v Copyright © 2005 South-Western. All rights reserved. 1–4

International Expansion

• Strategies for expanding internationally

– Exporting locally produced goods to other country– Subcontracting or licensing production of certain

goods or services to foreign partner– Entering into joint venture with foreign partner– Setting up operations (making a direct investment) in

form of foreign branch or subsidiary

International Expansion


v

Globalizing the HR - Function

As companies Globalize, their HR departments need to understand the challenges of working internationally and serving a global organization like:

Supporting personnel to serve the needs of their global organizations.

Acquiring competent personnel to work in a Global Environment.

Train or explain alliance about and be a better global business partner.

Administration and use supplement the capabilities for existing professionals.

Frame and Practice HR polices that adopt multinational Cultural, Political, Legal and Industrial framework.

1–5 5IHRM Chapter 1IHRM Chapter 1

v

International Human Resource Management (IHRM)

� The process of procuring, allocating and effectively utilizing human resources in an international business is called International Human Resource Management or IHRM.

� International Human Resource Management is the process of sourcing, allocating and effectively utilizing human resources in a multinational organization.


v

Difference between Domestic Vs. International HRM

IHRM Chapter 7IHRM Chapter 1IHRM Chapter 1

v

Differences between Domestic HRM and IHRM


v

The practice of HRM in the international context is different from its domestic counterpart in a number of ways. These include:

9IHRM Chapter 1

• Being responsible for a greater number of functions and activities such as selection, training and management of international assignees

• much broader knowledge of foreign country employment laws and global organization designs.

• more closely involved with employees lives as the• Being involved with greatly expanded and constantly

changing mix of employees (from the home countries and foreign locals), adding considerable diversity and complexity to the HR tasks.

IHRM Chapter 1

•Dimensions of IHRM

v 10IHRM Chapter 1

• Cope –up with more external influences• Face greater exposure to problems and liabilities (for

example, making mistakes in expatriate assignments can cost). The accumulated direct and indirect costs can be huge.

• Additional responsibilities like translation of language, both at headquarters and at the subsidiary level, organizing schooling and housing for expatriates and providing administrative services.

• Management of differential compensation due to variety of allowances and adjustments.

• More emphasis on activities like international relocation and orientation, both pre departure and post departure cultural training.

IHRM Chapter 1

v 11IHRM Chapter 1

• Knowledge of international taxation, rate of inflation and cost of living, including currency fluctuation.

• Diversity management, like managing people from different cultural and political backgrounds and gender differences.

• More contacts with Government officials for obtaining visas, work permits, tax certificates, fixing of meetings and so on.

• More risk management as threats from terrorists, Kidnappers and protecting intellectual property rights of firms..

• More public relations work to enhance the multinationals image and deal with human rights and other NGOs and interest group operating in different countries.

IHRM Chapter 1

v 12IHRM Chapter 1IHRM Chapter 1

Where subsidiary may be located

Sources of labor, finance and other inputs

Where the firm headquarter is located

Dimensions of IHRM

v

Sources of Employees forInternational Assignments

HCNHCN

Host Country Nationals (HCNs) are workers from the localpopulation(local nationals)

Parent Country Nationals (PCNs) are employees sent from thehome country (expatriates)

Third Country Nationals (TCNs) are employees froma country otherthan the parent & host countries

PCNPCN TCNTCN


v

IHRM Chapter 1

• Deployment in getting right skills to right place in organization regardless of geographic location

• Knowledge & innovation dissemination & transfer where all business units concurrently receive & provide information

• Talent identification & development of those employees with abilities & skills to function effectively in global organization

• Managing International Assignment • Employee and family adjustment• Selecting the right person for a foreign assignment • Culture differences • language and communication• Worldwide environment variation

Issues in IHRM


v

IHRM Chapter 1

Significance of IHRM in International Business:


Scullion (2001) outlined 10 major significance of IHRM in globally business environment. This significance can categorized in 5 key areas:

v

IHRM Chapter 1


v

Reading 14.1

Managing Global Workforce: Challenges & Strategies

– Develop a careers for employees to provide rich contextual knowledge of environments & cultures

– Provide specific awareness building assignments that develop cross-sensitivity in high potential employees in short time

– Utilize expert SWAT teams deployed on short-term basis for operational problems technical projects

– Adopt virtual solutions by using electronic communication technologies to connect local employees to distant problems

Strategies for managing global workforce

18IHRM Chapter 1 18IHRM Chapter 1IHRM Chapter 1


Strategic HR Issues in Global Assignments

Reasons for International Assignments

Reasons For International Assignments

• Position filling Skills gap, launch of new endeavor, technology Transfer

• Management developmentTraining and development purposes, assisting in developing common corporate values

• Organizational developmentNeed for control, transfer of knowledge, competence, procedures and practices

v

Types of International Assignments

• Short term: up to 3 months– Troubleshooting– Project supervision– A stopgap until a permanent arrangement is found

• Extended: up to 1 year– May involve similar activities as short-term assignments

• Long term: varies from 1 to 5 years– The traditional expatriate assignment

Types of International Assignments

v

Non-standard Assignments

• Commuter assignments• Rotational assignments• Contractual assignments• Virtual assignments

Some of these arrangements assist in overcoming the high cost of international assignments but are not always effective substitutes for the traditional expatriate assignment.

Non-standard Assignments


Strategic HR Issues in Global Assignments

1. Establish specific purpose for assignment

2. Select appropriate employee for assignment

3. Organizational & individual purposes for assignment must be identified & matched

4. Assess adaptability to host culture of both employee & any family members who will be accompanying employee

5. Provide appropriate training for employee & family members

6. Simultaneous training should be conducted for headquarters staff

Strategic management of global assignments

Chapter 1 introduction to ihrm

Education

Transcript of Chapter 1 introduction to ihrm