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differences between hrm and ihrm

differences between hrm and ihrm

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Published by: Vimala Dharmasivam on Feb 05, 2013
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DOMESTIC VS INTERNATIONAL HUMAN RESOURCE MANAGEMENT

INTRODUCTION

“Despite the fact that the core principles of SHRM also apply to Global HRM, Global HR presents some unique contingencies.”

These areas include:      Clarifying Taxation Issues Coordinating Foreign Currencies Exchange Rates Compensation Plans Working Directly With The Families of Employees Who May Be Accepting Overseas Assignments.Managing People in Global Settings   This requires Human Resources to address a broader range of functional areas.1. .

Involvement In Employee’s Personal Life   Global Hr Requires More Involvement In The Employee’s Personal Life The Employee Is Usually Assisted With:      Acquiring Housing In The Host Country Selling Or Leasing Domestic Accomodation Locating Recreational & Cultural Opportunities For Employees & Family Arranging & Paying for School for the Employee’s Children Locating & Securing Domestic Help For The Employee .2.

The Organization Must often Setup Different HRM Systems for Different Geographic Locations 4. including Foreign Governments & Political & Religious Groups .Unique HR Contingencies…. 3. The Organization is often Forced to Deal with More Complex External Constituencies.

Exposure To Risks   Global Assignments often involve A Heightened Exposure to Risks. These Risks Include:     Health & Safety of Employees & Family Legal Issues in Host Country Possible Tourism Human & Financial Consequences of Mistakes. which may Greatly Exceed The Costs of Those made Domestically. .

. A Recent Survey found that expatriates need & want more support from Head Quarters than they are receiving regarding health & safety concerns.Threat of Terrorism   The Threat of Terrorism has added to many of the anxieties employees face when considering & undertaking a Global Assignment.

educational and legal background Increased risks e. international relocation. personal taxation. recreation and spouse employment Complex employee mix – cultural. currency fluctuations. crosscultural training and repatriation Increased complexities e.g. political. ethical.Major differences between domestic HRM and IHRM      Business activities e. emergency exits for serious illness. children’s education. taxation. religious.g. personal security. housing. voter registration. health. expatriate remuneration. kidnapping and terrorism .g.g. different labor laws Increased involvement in employee’s personal life e. foreign HR policies and practices. performance appraisals.

without much integration/change Myth #6: A strategy must involves sales/operations in another country .Myths about globalization       Myth #1: Global = International Myth #2: Global strategy means doing same thing everywhere Myth #3: Globalizing = stateless corporation. no national/community ties Myth #4: Globalization requires abandoning country images and values Myth #5: Globalizing means tackling on acquisitions or alliances in other countries.

g. financial and management controls. Most evolve to become multinational companies . multinational. global & transnational organizations  International company – transports its business  outside home country. and marketing. need to have a common information systems for accounting. and involves subsidiary general managers Companies offering multiple products often find it challenging to remain organized e. each of its operations is a replication of the company's domestic experience. structured geographically.Strategies of international.

.Strategies of international. global & transnational organizations  Multinational company – grows and defines its business on a worldwide basis. but continues to allocate its resources among national or regional areas to maximize the total. multinational.

Strategies of international. multinational. . global & transnational organizations  Global organizations – treat the entire world as though it were one large country. may be the entire company or one or more of its product lines. may operate with a mixture of two or more organizational structure simultaneously.

multinational.Strategies of international.Use specialized facilities to permit local responsiveness. more complex coordination mechanism to provide global integration . global & transnational organizations  Transnational organization .

Global efficiency and local responsiveness of different types of firms High Global efficiency Low Global International Transnational Multinational High Local responsiveness .

Orientation to international operations (1) Australian organization with international operations      All senior and many middle management positions held by Australians Highly centralized in Australia. large head office Instruction and advice from Australian head office to subsidiaries HR policies and practices are predominantly Australian with some modification to satisfy foreign requirements Australian corporate culture .

instructions from Aust head office to regional headquarters HR policies and practices are mixed Mix of Australian and host country culture .Orientation to international operations (2) Australian multinational organization      Localization of some management positions but all top corporate positions held by Australians Some decentralization to regional or area headquarters Regional headquarters is the main source of communications.

Orientation to international operations (3) Australian global organization  All management positions are open to everyone regardless of nationality  Decentralized decision making  Two-way or multiple-way communication between headquarters  HR policies and practices are benchmarked on best international practices  International corporate culture .

and promotion via a hierarchy of ranks. 3. Borderless structure and bottom-up decision-making processes that encourage communication and information flow among all components of the company and extend the network to its key suppliers. commitment. 4. and competition among peers. focusing on new products and the relentless pursuit of operating improvements. including socialization. Prism. Custodial leadership that emphasizes values and vision and is skillfully unassertive. Human resource management. How Japanese multinationals work so well.Example from Japanese MNCs 1. 5. job rotation. and other business partners. (1991). 2. training. . while energizing and challenging middle managers with demanding targets. Campbell. rather than "grand designs" for competitive advantage. and appraisal systems that promote hard work. N. Incremental planning and control that help a company expand little by little. distributors. An extended family model that encourages and rewards commitment. 4. 61-69.

a shift in thinking Laurent (1986)    Explicit recognition by parent org of the existence of assumptions and values of home & host cultures Explicit recognition by parent org – ethnocentrism is neither good/bad. has strengths and weaknesses Explicit recognition of subsidiaries’ preferences – which may be different .IHRM .

IHRM .a shift in thinking Laurent (1986)   Willingness to acknowledge cultural difference – discuss and learn Genuine belief in creative and effective ways of managing people through crosscultural training/learning .

Important lessons for global firms      The need The need The need culture The need The need to manage change to respect local cultures to understand a corporation’s to be flexible to learn .

body) . written.g.Main challenges in IHRM        High failure rates of expatriation and repatriation Deployment – getting the right mix of skills in the organization regardless of geographical location Knowledge and innovation dissemination – managing critical knowledge and speed of information flow Talent identification and development – identify capable people who are able to function effectively Barriers to women in IHRM International ethics Language (e. spoken.

achievement. sacred objects. time. etc Educational level attained Social organizations e.g. social institutions. taboos. risk taking Roles of religion e. holidays. authority structures. interest groups.g.Main challenges in IHRM        Different labor laws Different political climate Different stage(s) of technological advancement Different values and attitudes e. status systems .g. prayer.

not technicians .Strategies for managing a global workforce (1) Implement the aspatial career strategy        Get people from everywhere (geocentric approach) Expats work in multiple countries during the course of their career Gain a lot of knowledge about different cultures & operations Develops in-depth knowledge Use previous knowledge for new assignment Extremely high cost Mainly managers.

Strategies for managing a global workforce (2) Implement the awareness-building assignment strategy      Expose a candidate to cultural training exercises Usually for short term (3 months to one year) Family members usually not required to relocate Usually used to train candidates for future assignments Learn from foreign assignment and bring experience back to HQ .

Strategies for managing a global workforce (3) Implement the SWAT team strategy      Highly mobile teams for short term assignments Deployed throughout the organization to different parts of the world No development agenda. plain troubleshooting Transfer technical knowledge to locals as they fix problems E.g. technical troubleshooters .

electronic databases. email.g. internet.Strategies for managing a global workforce (4) Implement the virtual solutions strategy     Collection of practices that exploit electronic communication E. videoconferencing. electronic expert systems Low cost and very fast in terms of disseminating knowledge Used by Xerox and Ford . intranet.

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