2. Human resource management (HRM) is the set
of activities directed at attracting, developing, and
maintaining the effective workforce necessary to
achieve a firm’s objectives. Recruiting and
selecting employees, providing training and
development, appraising performance, and
providing compensation and benefits are all part of
HRM.
3. What is IHRM
International HRM is the process of
procuring, allocating and utilizing human
resource in an a global firm.
Differences in culture, levels of
economic development, and legal
systems among countries may force
changes in HRM systems
5. Why International Human Resource
Management?
Increasing globalization, firms and employees in them
moving all over the world.
Major problems in international operations because of
human resource management
The role of HR in International Operations
Managing a Multicultural Workforce
Developing Managerial Talent in a Global Business
Environment
6.
7. Main challenges in IHRM
Different labor laws
Different political climate
Different stage(s) of technological advancement
Different values and attitudes e.g.
time, achievement, risk taking
Roles of religion e.g. prayer, taboos, holidays, etc
Educational level attained
Social organizations e.g. social institutions,
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8. Necessary Skills and Abilities for
International Managers
Skills and Abilities Skills and Abilities
Necessary to Do Necessary to Work
The Job In a Foreign Location
•Technical •Adaptability
•Functional •Location-specific skills
•Managerial •Personal characteristics
Improved Chances of Succeeding in
An International Job Assignment
9. Scope of Internationalization
Size of staffing tasks depends on scope of firm’s
international involvement
Export department
International division
Global organization
10. Centralization versus Decentralization of Control
Centralized firms
Favor home country managers
Decentralized firms
Favor host country managers
Most common amongst multi domestic firms
11. Major Areas of IHRM
The management of human resources in global
corporations
The management of expatriate employees
The comparison of HRM practices in a variety
of different countries
12. Questions for HR professionals
• Do we have a strategy for becoming an international firm?
• What type of managers will we need to be successful?
• How can I find out about the way that HRM is conducted
in other countries (laws, trade unions, labor market).
• What will be the impact of cultural norms on our HR
policies.
• How will we choose whether to send expatriates or use
local employees.
• How do we move people to different locations
• How do we manage transfer of knowledge across borders
13. Strategic Significance
The international HRM process involves
understanding the strategic context of HRM within
the firm’s overall strategy, recruiting and selecting
appropriate managerial personnel, providing
necessary training and development, assessing
performance, providing compensation, and evaluating
managerial retention and turnover.
14. International Managerial Staffing Needs
Most firms begin their international expansion with small-
scale exporting. Thus, during a firm’s initial foray into
foreign markets a home-country citizen, who may or may
not have special training in working in foreign markets,
usually manages the firm’s international transactions.
Later when the firm establishes an international
department, subsidiary managers (usually host country
citizens) report to the authority of the international
division (usually a home country citizen).
As a firm further expands its operations in a global
organization, a team of managers with expertise in the
firm’s product lines, necessary functional skills, individual
country markets, and the firm’s global strategy is usually
assembled.
15.
16.
17. Parent-country Nationals
Advantages Disadvantages
HCNs promotion
Control and co-ordination by
opportunities are limited.
HQ is maintained.
Adaptation to host country
Promising managers get may take a long time.
international experience. PCNs may impose an
PCNs may be the best people inappropriate HQ style.
for the job. Compensation differences
Assurance that the between PCNs and HCNs may
subsidiary will comply with cause problems.
company objectives policies
etc.
18. Host-country Nationals
Advantages Disadvantages
No problems with language HQ may have less control
and culture. over operations.
HCNs may still have limited
Reduced hiring costs.
career opportunities
No work permits required. outside the subsidiary.
Continuity of management Hiring HCNs limits
improves since HCNs stay opportunities for PCNs to
longer in positions. gain overseas experience.
Govt. policy may force Hiring HCNs may
hiring of HCNs. encourage a federation of
disintegrated national units
Promotional opportunities rather than one integrated
not limited - so higher global unit.
morale among HCNs.
19. Third-country Nationals
Disadvantages
Host government may
Advantages
resent TCNs as much
Salary and as PCNs.
compensation may be TCNs may not comply
lower than for PCNs. with HQ style of
May be more familiar management.
with host country than TCNs may not want to
the PCNs. return after
assignment.
20.
21. Complications for IHRM
compared to HRM
Firms must decide whether managers will be
selected from the home country, from the host
country or from third countries.
Training and development in an international firm
may be more complex than in a domestic firm.
Compensation systems must be adapted to meet
the needs of each country’s labor market.
22. Complications for IHRM compared
to HRM
International HR managers face a more complex task
than their domestic counterparts because differing
cultures, levels of economic development, and legal
systems among countries may require companies to
adapt their hiring, firing, training, and compensation
programs to each country.
23. Major differences between domestic HRM and IHRM
Business activities e.g. taxation, international relocation,
expatriate remuneration, performance appraisals, cross-
cultural training and repatriation
Increased complexities e.g. currency fluctuations, foreign
HR policies and practices, different labor laws
Increased involvement in employee’s personal life e.g.
personal taxation, voter registration, housing, children’s
education, health, recreation and spouse employment
Complex employee mix – cultural, political, religious,
ethical, educational and legal background
Increased risks e.g. emergency exits for serious illness,
personal security, kidnapping and terrorism
