INTERNATIONAL HUMAN

RESOURCE MANAGEMENT

CONTENTS

Introduction to IHRM

Challenges to IHRM

Eual e!"lo#ee o""ortunit#

Net$or% organi&ations

Hu!an Resource Manage!ent

Hu!an Resource Manage!ent 'HRM(

in)ol)es all !anage!ent decisions
and "ractices that directl# a*ect the
"eo"le $ho $or% +or the
organi&ation,

Hu!an Resources the "eo"le $ho

$or% +or the organi&ation,

-hat is IHRM.

International HRM 'IHRM( is the

"rocess o+/
0
"rocuring1
0
allocating1 and
0
e*ecti)el# utili&ing hu!an resources
0
in a !ultinational cor"oration1 $hile
0
2alancing the integration and
di*erentiation o+ HR acti)ities in
+oreign locations,

O34ECTI5ES o+ IHRM

To reduce the ris% o+

international hu!an
resource

To a)iod cultural ris%s

To a)iod regional
dis"arities

To !anage di)ersi6es
hu!an ca"ital

P.Morgans Model of IHRM

Hu!an resource acti)ities
0
7rocure!ent
0
Allocation
0
Utili&ation o+ hu!an resources

0
Host countr#
0
7arent countr#
0
Third countr#
Nation8countr#
categories $here 6r!s e9"and and o"erate

Categories o+ e!"lo#ees in an MNE

7arent:countr#
nationals '7CNs(
0
E!"lo#ees $ho $ere
2orn and li)e in a "arent
countr#,
A "arent 'or ho!e( countr#/
the countr# in $hich a
co!"an#<s cor"orate
headuarters is located,

Host:countr# nationals
'HCNs(
0
E!"lo#ees 2orn and raised
in a host countr#,
Host countr#/ a countr# in
$hich the MNE see%s to
locate or has alread# located
a +acilit#,

Third:countr# nationals
'TCNs(
0
E!"lo#ees 2orn in a
countr# other than a "arent
or host countr#,
Categories o+ e!"lo#ees in an
MNE

-hat is an e9"atriate.

An e!"lo#ee $ho is $or%ing and

te!"oraril# residing in a +oreign countr#

So!e 6r!s "re+er to use the ter! =international

assignees>

E9"atriates are PCNs +ro! the "arent countr#

o"erations1 TCNs trans+erred to either H? or
another su2sidiar#1 and HCNs trans+erred into
the "arent countr#

Glo2al @o$ o+ HR/ !ore co!"le9it# in

acti)ities and !ore in)ol)e!ent in
e!"lo#eesA li)es

International Assign!ents Create
E9"atriates

B,
B,
Ina2ilit# o+ s"ouse to adCust
Ina2ilit# o+ s"ouse to adCust
D,
D,
Manager<s ina2ilit# to adCust
Manager<s ina2ilit# to adCust
E,
E,
Other +a!il# "ro2le!s
Other +a!il# "ro2le!s
F,
F,
Manager<s "ersonal or e!otional
Manager<s "ersonal or e!otional
!aturit#
!aturit#
G,
G,
Ina2ilit# to co"e $ith larger o)erseas
Ina2ilit# to co"e $ith larger o)erseas
res"onsi2ilit#
res"onsi2ilit#
H,
H,
Lac% o+ technical co!"etence
Lac% o+ technical co!"etence
I,
I,
JiKculties $ith ne$ en)iron!ent
JiKculties $ith ne$ en)iron!ent
Reasons +or E9"atriate Lailure

-h# IHRM
?

Lactors that In@uence the Glo2al -or%
En)iron!ent

Glo2al co!"etition
Glo2al co!"etition
/
/

Gro$th in !ergers1 acuisitions

Gro$th in !ergers1 acuisitions
and alliances
and alliances
/
/

Organi&ation restructuring
Organi&ation restructuring
/
/

Ad)ances in technolog# and

Ad)ances in technolog# and
teleco!!unication
teleco!!unication
Lorces +or Change

Need +or @e9i2ilit#

Need +or @e9i2ilit#
/
/

Local res"onsi)eness
Local res"onsi)eness
/
/

Mno$ledge sharing
Mno$ledge sharing
/
/

Trans+er o+ co!"etence
Trans+er o+ co!"etence
/
/
I!"acts on Multinational
Manage!ent

Je)elo"ing a glo2al =!indset>

Je)elo"ing a glo2al =!indset>

More $eighting on in+or!al control

More $eighting on in+or!al control
!echanis!s
!echanis!s

Lostering hori&ontal co!!unication

Lostering hori&ontal co!!unication

Using cross:2order and )irtual

Using cross:2order and )irtual
tea!s
tea!s

Using international assign!ents

Using international assign!ents
Managerial Res"onses

More HR acti)ities/ ta9ation1 culture

More HR acti)ities/ ta9ation1 culture
orientation1 ad!inistrati)e ser)ices
orientation1 ad!inistrati)e ser)ices

The need +or a 2roader "ers"ecti)e/ cater to

The need +or a 2roader "ers"ecti)e/ cater to
!ulti"le needs
!ulti"le needs

More in)ol)e!ent in e!"lo#ees< "ersonal

More in)ol)e!ent in e!"lo#ees< "ersonal
li)es/ adCust!ent1 s"ouses1 children
li)es/ adCust!ent1 s"ouses1 children

Changes in e!"hasis as the $or%+orce !i9 o+

Changes in e!"hasis as the $or%+orce !i9 o+
e9"atriates and locals )aries/ +airness
e9"atriates and locals )aries/ +airness

Ris% e9"osure/ e9"atriate +ailure1 terroris!

Ris% e9"osure/ e9"atriate +ailure1 terroris!

3roader e9ternal in@uences/ go)ern!ent

3roader e9ternal in@uences/ go)ern!ent
regulations1 $a#s o+ conduct
regulations1 $a#s o+ conduct
Ji*erences 2et$een Jo!estic HRM and
IHRM

Ji*erences 2et$een Jo!estic HRM
and IHRM/ )aria2les

Co!"le9it# in)ol)ed in o"erating in

Co!"le9it# in)ol)ed in o"erating in
di*erent countries1 )aried nationalities o+
di*erent countries1 )aried nationalities o+
e!"lo#ees
e!"lo#ees

The di*erent Cultural En)iron!ent

The di*erent Cultural En)iron!ent

The industr# or industries $ith $hich the

The industr# or industries $ith $hich the
MNC is in)ol)ed
MNC is in)ol)ed

Attitudes o+ Senior Manage!ent

Attitudes o+ Senior Manage!ent

E9tent o+ reliance o+ MNC on ho!e countr#

E9tent o+ reliance o+ MNC on ho!e countr#
do!estic !ar%et
do!estic !ar%et

5aria2les that Moderate Ji*erences
2et$een Jo!estic HR and IHRM

?ualities o+ Glo2al Managers

Understand the $orld$ide 2usiness

Learn a2out !an# cultures

-or% $ith !an# t#"es o+ "eo"le

Create cultural s#nerg#

Ada"t to li)ing in !an# cultures

Use cross:cultural s%ills dail#

Treat +oreign colleagues as euals

Use +oreign assign!ents as career

de)elo"!ent

Main challenges in IHRM

High +ailure rates o+ e9"atriation and

re"atriation

Je"lo#!ent 0 getting the right !i9 o+ s%ills in

the organi&ation regardless o+ geogra"hical
location

Mno$ledge and inno)ation disse!ination 0

!anaging critical %no$ledge and s"eed o+
in+or!ation @o$

Talent identi6cation and de)elo"!ent 0 identi+#

ca"a2le "eo"le $ho are a2le to +unction
e*ecti)el#

3arriers to $o!en in IHRM

International ethics

Language 'e,g, s"o%en1 $ritten1 2od#(

Main challenges in IHRM

Ji*erent la2or la$s

Ji*erent "olitical cli!ate

Ji*erent stage's( o+ technological

ad)ance!ent

Ji*erent )alues and attitudes e,g, ti!e1

achie)e!ent1 ris% ta%ing

Roles o+ religion e,g, sacred o2Cects1 "ra#er1

ta2oos1 holida#s1 etc

Educational le)el attained

Social organi&ations e,g, social institutions1

authorit# structures1 interest grou"s1 status
s#ste!s

E?UAL EM7LONEE O77ORTUNITN

Eual E!"lo#!ent
O""ortunities 'EEO(
!eans eli!inating
2arriers to ensure
that all e!"lo#ees
are considered +or the
e!"lo#!ent o+ their
choice and ha)e the
chance to "er+or! to
their !a9i!u!
"otential,

EEO "ractices include/

+airness at $or%1

hiring 2ased on !erit and

"ro!otion 2ased on talent,

It concerns all as"ects o+
e!"lo#!ent including recruit!ent1
"a# and other re$ards1 career
de)elo"!ent and $or% conditions
E?UAL EM7LONEE O77ORTUNITN

O34ECTI5ES

To "ro!ote recognition and acce"tance o+

e)er#oneAs right to eualit# o+ o""ortunit#

TO eli!inate1 as +ar as "ossi2le1

discri!ination against "eo"le 2#
"rohi2iting discri!ination on the 2asis o+
)arious attri2utes

TO eli!inate1 as +ar as "ossi2le1 se9ual

harass!ent

TO "ro)ide redress +or "eo"le $ho ha)e

2een discri!inated against or se9uall#
harassed,

E?UAL EM7LONEE O77ORTUNITN
Jiscri!ination on the 2asis o+/:

Jisa2ilit#

Race

Age

Minorit#

Marital status
Eual e!"lo#!ent o""ortunit# act is
i!"le!ented 2# !an# countries to sto"
these discri!inations,

Ji)ersit# in $or%+orce
Diferences among people in age, gender,
race, ethnicity, religion, sexual
orientation, socioeconomic background,
capabilities/disabilities and in the
thought process
!anage!ent s#ste! $hich incor"orates the
di*erences +ound in a !ulticultural
$or%+orce in a !anner $hich results in the
highest le)el o+ "roducti)it# +or 2oth the
organi&ation and the indi)idual,

Ji)ersit# is the !i9ture o+ "eo"le in 2usiness1 $ith their )ariet# o+
2ac%grounds1 e9"eriences1 st#les1 cultures1 s%ills and co!"etencies,
Ji)ersit# -heel

!s indi"iduals, #e are all di"erse

!s organi$ations and #ork groups,

some are more di"erse than others

%mportant to understand your mix

&customer's, employees (
stakeholders) no# both current state
and desired state

People are both similar and diferent

among a "ariety o* dimensions

Need to understand the impact o*

culture
Learning<s +ro! the -heel

NET-ORM ORGANISATIONS

International Ji)ision Structure

Glo2al 7roduct Ji)ision

Glo2al Area Ji)ision

Glo2al Lunctional Ji)ision Structure

Multinational Matri9 Structure

International Ji)ision Structure
Structural arrange!ent that handles all international
o"erations out o+ a di)ision created +or this "ur"ose

Assures international +ocus recei)es to"

!anage!ent attention
Uni6ed a""roach to international o"erations

O+ten ado"ted 2# 6r!s still in de)elo"!ental

states o+ international 2usiness o"erations

Se"arates do!estic +ro! international !anagers

'not good(
Ma# 6nd it diKcult to thin% and act strategicall#1 or
to allocate resources on a glo2al 2asis

International Ji)ision Structure

+lobal Product Di"ision
Structural arrange!ent in $hich do!estic di)isions are gi)en
$orld$ide res"onsi2ilit# +or "roduct grou"s
Glo2al "roduct di)isions o"erate as "ro6t centers
Hel"s !anage "roduct1 technolog#1 custo!er
di)ersit#
A2ilit# to cater to local needs
Mar%eting1 "roduction and 6nance coordinated on
"roduct:2#:"roduct glo2al 2asis
Ju"lication o+ +acilities and sta* "ersonnel $ithin
di)isions
Ji)ision !anager !a# "ursue currentl# attracti)e
geogra"hic "ros"ects and neglect others $ith long:
ter! "otential
Ji)ision !anagers !a# s"end too !uch ti!e ta""ing
local rather than international !ar%ets

+lobal Product Di"ision

Glo2al Area Ji)ision

Structure under $hich glo2al o"erations

organi&ed on geogra"hic 2asis
0 International o"erations "ut on sa!e le)el as
do!estic
0 Glo2al di)ision !angers res"onsi2le +or all 2usiness
o"erations in designated geogra"hic area
0
O+ten used 2# 6r!s in !ature 2usinesses $ith narro$
"roduct lines
0 Lir! is a2le to reduce cost "er unit and "rice
co!"etiti)el# 2# !anu+acturing in a region
0 JiKcult to reconcile a "roduct e!"hasis $ith
geogra"hic orientation
0 Ne$ ROJ e*orts o+ten ignored 2ecause di)isions are
selling in !ature !ar%et

Glo2al Area Ji)ision

Glo2al Lunctional Ji)ision
Structure
Structure that organi&es $orld$ide o"erations
"ri!aril# 2ased on +unction and secondaril# on
"roduct
0 A""roach not used e9ce"t 2# e9tracti)e co!"anies such as
oil and !ining
0 La)ored onl# 2# 6r!s needing tight1 centrali&ed
coordination and control o+ integrated "roduction "rocesses
and 6r!s in)ol)ed in trans"orting "roducts and ra$
!aterials 2et$een geogra"hic areas
0 E!"hasi&es +unctional e9"ertise1 centrali&ed control1
relati)el# lean !anagerial sta*
0 Coordination o+ !anu+acturing and !ar%eting o+ten diKcult
0 Managing !ulti"le "roduct lines can 2e )er# challenging
2ecause o+ se"aration o+ "roduction and !ar%eting into
di*erent de"ar!ents,

Glo2al Lunctional Ji)ision
Structure

Multinational Matri9 Structure
Structure is a co!2ination o+ glo2al
"roduct1 area1 or +unctional
arrange!ents
0
Allo$s organi&ation to create s"eci6c
t#"e o+ design that 2est !eets its needs
0
As !atri9 design<s co!"le9it# increases1
coordinating "ersonnel and getting
e)er#one to $or% to$ard co!!on goals
o+ten 2eco!e diKcult
0
Too !an# grou"s to their o$n $a#

Multinational Matri9 Structure

Transnational Net$or% Structures
Multinational structural arrange!ent
co!2ining ele!ents o+ +unction1 "roduct1
geogra"hic design1 $hile rel#ing on
net$or% arrange!ent to lin% $orld$ide
su2sidiaries
0
At center o+ transnational net$or% structures
are nodes1 units charged $ith coordinating
"roduct1 +unctional1 and geogra"hic
in+or!ation
0
Ji*erent "roduct line units and geogra"hic
area units ha)e di*erent structures
de"ending on $hat is 2est +or their "articular
o"eration

Transnational Net$or% Structures

Control Mechanis!s