INTERNATIONAL HUMAN RESOURCE MANAGEMENT

ANJALI VERMA ROLL NO. 07 SECTION-P4

INTRODUCTION TO IHRM
MEANING It is not easy to provide a precise definition of international human resource management (IHRM) .A Multinational Corporation varies from firm to firm. It also depends on whether the manager is located in a global corporations headquarters or onsite in a foreign subsidiary. Broadly defined, international human resource management (IHRM) is the process of procuring, allocating, and effectively utilizing human resources in a multinational corporation. If the MNC is simply exporting its products, with only a few small offices in foreign locations, then the task of the international HR manager is relatively simple. However, in global firms human resource managers must achieve two somewhat conflicting strategic objectives. First, they must integrate human resource policies and practices across a number of subsidiaries in different countries so that overall corporate objectives can be achieved. At the same time, the approach to HRM must be sufficiently flexible to allow for significant differences in the type of HR policies and practices that are most effective in different business and cultural settings.

Definition: International HRM (IHRM) - HRM issues and problems arising from the internationalization of business, and the HRM strategies, policies and practices that global firms pursue in response to the internationalization process. Typically celebrates a Western management and hegemonic culture.

Definition: strategic IHRM - HR policies and processes that result from the global competitive activities of MNCs and that explicitly link international HR practices and processes with the worldwide strategic goals of those companies. Defining International HRM from the perspective of a multinational firm Before offering a definition of international HRM, we should first define the general field of HRM. Typically, HRM refers to those activities undertaken by an organization to effectively utilize its human resources. These activities would include at least the following: Human resource planning Staffing Performance management Training and development Compensation and Benefits Labor relations

SCOPE International Human Resource Management: Scope The scope of IHRM is very wide: 1. Personnel aspect-This is concerned with manpower planning, recruitment, selection, placement, transfer, promotion, training and development, layoff and retrenchment, remuneration, incentives, productivity etc. 2. Welfare aspect-It deals with working conditions and amenities such as canteens, crches, rest and lunch rooms, housing, transport, medical assistance, education, health and safety, recreation facilities, etc. 3. Industrial relations aspect-This covers unionmanagement relations, joint consultation, collective bargaining, grievance and disciplinary procedures, settlement of disputes, etc.

SCOPE OF IHRM

MODEL OF IHRM

Host Country National (HCN): Belongs to the Country where the subsidiary is located Parent Country National (PCN): Belongs to the Country where the firm has its headquarters

Third Country Nationals (TCN): Belongs to any other country and is employed by the firm

GLOBAL WORKFORCE

Human capital available in the international arena and across national borders Study important for understanding the supply and demand for labour. Crucial when formulating people-management strategies both locally and internationally. Essential in order to develop a comparative perspective on supply and demand for labour as well as conditions and terms of employment and work in an international context.

International context

Global patterns of change, continuation, unification and diversification in the management of people. Mainstream texts: Focus on industrialized countries and blocs such as the USA, the EU, Canada, Japan and Australia. Growing body of research on employment and management systems in developing and less-developed countries.

National context

Employment law, unions, society, culture and professionalization. Linkages between HRM effectiveness and the social context (culture, climate and the political environment of an organization) Professionalization of HRM at the national level

Strategic issues

Well-documented and developed area of academic study Strategic international human resource management (SIHRM): Research relatively sparse.

Operational issues

Acceptable and formal methods of HRM display diversity across national borders. Recruitment - selection, education - training, expatriation repatriation, participation - involvement, pay - conditions, promotion, reward, career development, retirement, and downsizing of an international workforce.

The Future
Qualitative, valuebased and ethical dimensions of IHRM, highlighting the significance and long-term relevance of value-based decision-making in IHRM practice. Trends, dilemmas and challenges facing IHRM

Professional Competencies

IHRM interact in more diverse and dynamic environments than their counterparts who are responsible from singlecountry operations. Competencies expected of an international human resource manager: learning and knowledge skills to transferable, affective and people-management skills Cross-national and sectoral distinctions within such competencies

IHRM Career

Education, training and development of international human resource managers Career development Patterns of employment Key concerns in management of such a career from individual as well as organizational perspectives.

Differences between Domestic and International Human Resource Management

More HR activities: taxation, culture orientation, administrative services The need for a broader perspective: cater to multiple needs More involvement in employees personal lives: adjustment, spouses, children Changes in emphasis as the workforce mix of expatriates and locals varies: fairness Risk exposure: expatriate failure, terrorism

Broader external influences: government regulations, ways of conduct

Complexity involved in operating in different countries, varied nationalities of employees The different Cultural Environment The industry or industries with which the MNC is involved Attitudes of Senior Management

Extent of reliance of MNC on home country domestic market

When compared with domestic human resource management, IHRM requires a much broader perspective on even the most common HR activities. This is particularly so for HR managers operating from a MNCs headquarters (HQ). The number and variety of IHRM activities are daunting. International HR managers must deal with issues as varied as international taxation; international relocation and orientation; various other administrative services for expatriates; selecting, training and appraising local and international employees; and managing relations with host governments in a number of countries around the world. Even when dealing with one particular HR function area such as compensation, the international HR manager is faced with a great variety of national and international pay issues. For example, while dealing with pay issues, the HQ-based HR manager must coordinate pay systems in different countries with different currencies that may change in relative value to one another over time. An American expatriate in Tokyo who receives a salary of $100,000 may suddenly find the buying power of that salary dramatically diminished if the Japanese yen strengthens in value relative to the US dollar. A US dollar purchased 248 yen in 1985, but less than 110 yen in 2000.

Variables that Moderate Differences between Domestic HR and IHRM

FORCES OF 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