What is IHRM

Firms operating in international markets face different conditions and competitions.

Multinationals are characterised by an interdependence of resources and
responsibilities across all business units regardless of national boundaries. These
companies have to cope with large flows of components, products, resources, people
and information among their subsidiaries, while simultaneously recognising the
specialised resources and capabilities of each. This demands a complex process of
coordination and cooperation involving strong cross unit integrating devices, a strong
corporate identity and a well-developed worldwide management perspective.
Differences between international and domestic HRM
Refer notes

Developing international HR strategies
Building a global culture, which will encourage the managerial mind-sets and
attitudes to develop an integrated, networked organisation to cope with global
customers and global transactions?
Developing the leadership and managerial capability and structure to support
global strategies and operations.
Gaining management interest and involvement in human resource
management.
Ensuring optimum quality and depth of managerial personnel to serve global
customers
Ensuring managers have to technical and managerial skills to work effectively
at the global level.
Increasing the extent and scope of managerial talent in organisation.
Identifying the depth of managerial talent in organisation
Ensuring management succession
Sustaining and improving performance at all levels in all area of the company
Linking HRM strategic objective
Issues in IHRM
Managing international assignments: articles about the
selection,training,compensation and repatriation of expatriate failures
Employee and family adjustment: Peoples adjustment to expatriate
assignments can be extremely challenging, regardless of the country.
Selecting the right person for a foreign assignment: this is critical for
success. Expatriates must be personally adaptable and their families
capable of adjusting to new and unusual challenges.
Culture, communication and gauge: international HR professionals are
expected to understand the implications of cultural differences between
countries and their interplay with diffusing corporate cultures.
Language and communication: these are important in international HR
management. Expatriate managers must learn the foreign languages or rely
on local interpreters to communicate with local workforce.
BARRIERS TO EFFECTIVE GLOBAL HRM
There are number of unique problems that global companies face when trying
to implement consistent practices across their global HR networks.
These are:
VARIATIONS:
PERCEPTION OF HR
ATTITUDE AND ACTION OF HEADQUATERS TOWARDS HR
RESISTANCE TO CHANGE
CULTURAL DIFFERENCES IN LEARNING AND TEACHING
STYLES












MODELS OF IHRM

Morgan on development of IHRM presents a model of international HRM that
consists of 3 dimensions:
1. The three broad human resource activities: procumbent,
allocation, utilization. These three broad activities can be easily
expanded into six HR activities like:
HR planning
Staffing
Performance management
Training and development
Compensation and benefits
Labour relations
2. The three national or country categories involved in
international HRM activities: the host country where a
subsidiary may be located, the home country where the firm is
head quartered and other countries that may be the source of
labour or finance.
3. The three types of employees of an international firm: host
country nationals (HCNs), parent country nationals (PCNs), and
third-country nationals (TCNs). Thus, for eg; IBM employs
Australian citizens(HCNs) in its Australian operations, often send
U.S citizens (PCNs)to Asian Pacific countries on assignments,
and may send some of its Singapore employees on an assignment
to its Japanese operations(as TCNs)
INTERNATIONAL HUMAN RESOURCE MANAGEMENT APPROACHES
The HRM uses four terms to describe Multi-national corporations approaches to
managing and staffing their subsidiaries:
1. Ethnocentric: few foreign subsidiaries have any autonomy; strategic decision
is made at headquarters. Key positions at the domestic and foreign operations
are held by management personnel of headquarters. In other word, subsidiaries
are managed by expatriates from the home country(PCNs)
2. Polycentric: the MNC treats each subsidiary as a distinct national entity with
some decison0making autonomy. Subsidiaries are usually managed by local
nationals(HCNs) who are seldom promoted to positions at head quarters
3. Geocentric: here, the MNC takes a worldwide approach to its operation,
recognising the each part make as unique contribution with its unique
competence. It is accomplished by a worldwide integrated business, and
nationality is ignored in favour of ability.PCNs,HCNs,TCNs can be found in
key positions anywhere, includimg those at senior management level at
headquarters and on board of directors
4. Egocentric: reflects the geographic strategy and structure of the multinational,
like geocentric approach, it utilizes a wider pool of managers but in a limited
way. Personnel may move outside their countries but only within the particular
geographic region.
THE PATH TO GLOBAL STATUS

Export

Initial division structure (early stages of internationalization)







International division


INTERNATIONAL HRM
1. Recent years have seen a rapid increase in global activity and global
competition. As the MNCs increase in number and influence, so the role of
international HRM in those companies grows in significance.
2. The effective management of human resources internationally is increasingly
being recognised as a major determinant of success or failure in international
business.
3. Research evidence shows that:
i. Shortage of international managers is becoming an
increasing problem for international firms.
ii. To a large extent the successful implementation of global
strategies depends on the existence of an adequate supply
of internationally experienced managers
iii. Business failures in the international arena may often be
linked to poor management of human resources
iv. Expatriate failures continue to be significant problem for
many international firms.
EMPLOYEE MANAGEMENT ISSUES
Attitude to power and authority and its implication for employee
management
In every culture, it is safe to argue, there is inequality of power between
people, based on many factors such as wealth, education, political and social
positions.
At the macro level, this inequality manifests itself in hierarchical stratification
for eg class, caste and feudal system.
At micro level it can be seen in extent to which individual might be willing or
able or reluctant or even scared to challenge the authority of people in senior
position, be it parents, religious leaders, teachers or their rulers
At organisational level, the inequality of power can be observed in formal and
informal hierarchical structure and relationships between organisational
members.
The management style is more likely to be paternalistic or autocratic,
decisions tend to be taken by few senior managers and carried out by
subordinates and org are highly centralised with a rigid hierarchical chain of
command
In low-inequality cultures, all these characteristics tend to be reversed:
employees respect their managers but feel able to point out them when they do
not agree with their views or actions.theerefore the management style is likely
participative or consultive, authority hierarchy is flat and flexible or even
replaced by networks and leaderless work teams.


Tolerance for ambiguity and attitude to risk and their implications for
employee management
These characteristics can be directly influence the degree to which people are
willing or able to make decision on their own and accept responsibility for
outcome
In organisations, employee who have less tolerance for uncertainty and are
willing to face ambiguity and risk are more likely to avoid making decisions
on their own and without direction from above, in form of procedures,
regulations and or direct supervision or without at least sharing responsibilities
with others.
In cultures with high tolerance for uncertainty and willingness to take risk,
people tend to be entrepreneurial, able to handle uncertain situations and
prepared to take risky decision on their own
Interpersonal trust and its implications for employee management
Are they capable of making decision on their own? Do they have sufficient
knowledge about the task at hand? Will they put the companys interest before
theirs?
In cultures characterised by rampant corruption and generally low level of
skills and competence, mangers are likely to delegate decision-making
authority only to a few trusted employees, preferably their own relative and
friends.
Individualism and collectivism and their implications for employee
management
These concepts do not easily lend themselves to clear cut interpretations. An
individualistic culture is generally characterised by a high value placed on
ones independence, autonomy and privacy a belief in ones own worth,
confidence in ones own idea and opinion.
Preference for certain leadership behaviours and its implications for
employee management
People living indifferent parts of world have different expectations from these
who are in leadership positions be it country ruler, a local community leader or
a senior member of the family like a grand old uncle or grandfather
M