International HRM

Messiah College
January 22, 2014

attribution
Attribution in this presentation: all figures come
from Peter J. Dowling, a.o., International Human
Resource Management, South-Western Cencage
Learning, 2008, ISBN 978-1-84480-542-6, unless
mentioned otherwise.

Objectives
Define key IHRM terms
Review expatriate management
evolution
Outline differences between domestic
and international HRM
Discover the increasing complexity
and potential challenges of current
IHRM

A definition of IHRM
We define the field of IHRM broadly to cover all
issues related to the management of people in
an international context. Hence our definition
of IHRM covers a wide range of human resource
issues facing MNCs in different parts of their
organizations. Additionally, we include
comparative analyses of HRM in different
countries.
Stahl and Bjorkman, page 5, Chapter 1.

expatriate
management

Terms
NAFTA
UNCTAD

HRM
IHRM
HCN
PCN
TCN

expatriate
inpatriate
MNE
culture shock
emi-etic distinction

Inter-relationships between
approaches to a field

Defining HRM
An organizations HRM activities include:
1. Human resource planning
2. Staffing (recruitment, selection, outplacement)
3. Performance management
4. Training and development
5. Compensation (remuneration) and benefits
6. Industrial relations

Human resource planning

Recruitment & Selection

Performance management

Renumeration

Training & Development

Differences between domestic HRM

and IHRM
The complexity of IHRM can be attributed to six
factors:
1. More HR activities
2. The need for a broader perspective
3. Move involvement in employees personal lives
4. Changes in emphasis as the workforce mix of
expatriates and locals varies
5. Risk exposure

6. Broader external influences

from SWOT to Strategy

Implementation of Strategy
corporate governance
organizational structure
coordination and control
leadership
entrepreneurship
innovation
change and sustainability

approach and focus

Suitability, does the strategy address the key
issues?
Acceptability, will the strategy achieve an
acceptable return, reasonable level
of risks?
Feasibility, can the strategy be pursued within
the resources, capabilities and
competences of the organization?

opportunities international strategy

Internationalization causes
differences in costs/risks
Exporting high cost and low risk
Licensing low costs and high risk
Strategic alliances shared costs and shared
risks, but having problems of integration and
therefore control
Acquisitions rapid, high cost and high risk
The establishment of a new subsidiary also
high cost and high risk, greater opportunity for
management control and above average
returns

determinants
of national
advantage

Determinants of national advantage

Factor conditions labor, land, natural
resources, financial capital, infrastructure
Demand conditions demand for basic and
advanced goods and services in the home market
Related and supported industries important
networks of suppliers, buyers, services
Firms strategy, structure and rivalry some
places in different countries are the location of
choice for particular industries, products,
services

viability of the firm

framework for thinking flexibly about

culture
Unitary and unique organizational culture
Organizations as meetings points of fields of
culture
Local subcultures
Ambiguous cultural configurations
Integration consistency and consensus
Differentiation variation and sub-culture
conflict
Fragmentation ambiguity, inconsistency and
fluctuation

knowledge strategies

four knowledge management

strategies
Leveraging communicate and transfer existing
knowledge within the organization
Expanding create and build on existing
knowledge
Appropriate strategy take new knowledge
from external individuals and
organizations and transfer this into
your organization
Probing strategy create new, propriatory
knowledge from your internal
organizational resources

A model of the variables that moderate differences

between domestic and international HRM

Variables that moderate differences

between domestic and international HRM
1. The complexity involved in operating in
different countries and employing different
national categories of employees
2. The cultural environment
3. The industry (or industries) with which the
MNE is primarily involved
4. The extent of reliance of the MNE on its
home-country domestic market
5. The attitudes of senior management

Strategic HRM in multinational

enterprises

truly international HRM require following steps

1. Recognize that ones own HRM reflects home culture
assumptions and values.
2. Recognize that ones own peculiar ways are neither
universally better nor worse than others - just different and
likely to exhibit strengths and weaknesses, particularly
abroad.
3. Recognize that organizations foreign subsidiaries may prefer
other ways to manage people ways that are neither
intrinsically better nor worse, but possibly more effective
locally.
4. Headquarters willingness to acknowledge cultural differences
and steps to make them discussable and therefore usable.
5. Build shared genuine belief that cross-cultural learning will
result in more creative and effective ways of managing
people.

Discussion Questions
1. What are the main similarities and differences
between domestic and international HRM?
2. Define these terms: IHRM, PCN, HCN, and TCN.
3. Discuss two HR activities in which a MNE must
engage that would not be required in a domestic
environment.
4. Why is a greater degree of involvement in
employees personal lives inevitable in many
IHRM activities?
5. Discuss at least two of the variables that
moderate differences between domestic and
international HR practices

The end