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However, the most interesting and important story, here, may be told by the

thousands of small to medium-sized rms (SMEs) that sell all types of products and
services in other countries, supply materials and parts or services or do subcontracted
or licensed manufacturing for rms from other countries, or distribute products from
manufacturers in or own franchises from countries other than their own. And with
the advent of sales via credit cards and the internet, and the improving ability to ship
parcels from source country to country of the customer via services like UPS and
Federal Express, anyone can sell any product to anyone else, anywhere in the world.
And they are. And it involves business activity of every sort.
Because most early international business was conducted by rms involved in
extraction (oil, mining) or manufacturing for export (often manufactured from
imported raw materials), much of the writing about international business has been
from the perspective of industrial enterprises. (The evolution of international business
is covered in more detail in the next chapter, as it relates to the development of
international business and HR strategy.) But today the reality is that every type of
rm is conducting or can conduct business internationally. And in doing so every
type of rm becomes more involved in the internationalization of human resource
The internationalization of Human Resource Management
The above paragraphs make the point that business is global. All aspects of the
enterprise are affected. This book is about one specic function of business, the
international nature and implications of the management function termed human
resource management (HRM). Thus the focus of this text is International HRM
(IHRM). The more broadly dened eld of IHRM is about understanding,
researching, applying and revising all human resource activities in their internal and
external contexts as they impact the process of managing human resources in
enterprises throughout the global environment to enhance the experience of multiple
stakeholders, including investors, customers, employees, partners, suppliers,
environment and society.
As the global economy expands, as more products and services compete on a global
basis and as more and more rms operate outside their countries of origin, the impact
on various business functions becomes more pronounced. Practitioners in all business
functions must develop the knowledge, skills, and experience in the international
arena which will enable them and their rms to succeed in this new environment. This
new reality is just as true (if not more so, as this book will demonstrate) for the HRM
function as it is for other business disciplines, such as nance or marketing, which
often get more attention. The purpose of this book is to describe the knowledge, skills,
and experiences necessary for the successful management of the IHR function, a
function that is increasingly performed by all employees in companies, including
HR professionals (in the HR department), managers and non-managers (see Sparrow
et al., Globalizing Human Resource Management, in this series).
20 The context