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*.
/
"rocuring0
/
allocating0 and
/
e**ecti)el# utili&ing hu!an resources
/
in a !ultinational cor"oration0 $hile
/
1alancing the integration and
di**erentiation o* HR acti)ities in
*oreign locations+

O23ECTI4ES 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)ersi*ies
hu!an ca"ital

P.Morgans Model of IHRM

Hu!an resource acti)ities
/
5rocure!ent
/
Allocation
/
Utili&ation o* hu!an resources

/
Host countr#
/
5arent countr#
/
Third countr#
Nation6countr#
categories $here *ir!s e7"and and o"erate

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

5arent8countr#
nationals '5CNs(
/
E!"lo#ees $ho $ere
1orn 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+

Host8countr# nationals
'HCNs(
/
E!"lo#ees 1orn and raised
in a host countr#+
Host countr#. a countr# in
$hich the MNE see%s to
locate or has alread# located
a *acilit#+

Third8countr# nationals
'TCNs(
/
E!"lo#ees 1orn in a
countr# other than a "arent
or host countr#+
Categories o* e!"lo#ees in an
MNE

,hat is an e7"atriate-

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

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

So!e *ir!s "re*er to use the ter!

;international assignees<

E7"atriates are PCNs *ro! the "arent countr#

o"erations0 TCNs trans*erred to either H= or
another su1sidiar#0 and HCNs trans*erred into
the "arent countr#

Glo1al *lo$ o* HR. !ore co!"le7it# in

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

International Assign!ents Create
E7"atriates

?+
?+
Ina1ilit# o* s"ouse to ad@ust
Ina1ilit# o* s"ouse to ad@ust
A+
A+
Manager:s ina1ilit# to ad@ust
Manager:s ina1ilit# to ad@ust
B+
B+
Other *a!il# "ro1le!s
Other *a!il# "ro1le!s
C+
C+
Manager:s "ersonal or e!otional
Manager:s "ersonal or e!otional
!aturit#
!aturit#
D+
D+
Ina1ilit# to co"e $ith larger o)erseas
Ina1ilit# to co"e $ith larger o)erseas
res"onsi1ilit#
res"onsi1ilit#
E+
E+
Lac% o* technical co!"etence
Lac% o* technical co!"etence
F+
F+
Gi**iculties $ith ne$ en)iron!ent
Gi**iculties $ith ne$ en)iron!ent
Reasons *or E7"atriate Hailure

,h# IHRM
?

Hactors that In*luence the Glo1al ,or%
En)iron!ent

Glo1al co!"etition
Glo1al co!"etition
.
.

Gro$th in !ergers0 acuisitions

Gro$th in !ergers0 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
Horces *or Change

Need *or *le7i1ilit#

Need *or *le7i1ilit#
.
.

Local res"onsi)eness
Local res"onsi)eness
.
.

Ino$ledge sharing
Ino$ledge sharing
.
.

Trans*er o* co!"etence
Trans*er o* co!"etence
.
.
I!"acts on Multinational
Manage!ent

Ge)elo"ing a glo1al ;!indset<

Ge)elo"ing a glo1al ;!indset<

More $eighting on in*or!al control

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

Hostering hori&ontal
Hostering hori&ontal
co!!unication
co!!unication

Using cross81order and )irtual

Using cross81order and )irtual
tea!s
tea!s

Using international assign!ents

Using international assign!ents
Managerial Res"onses

More HR acti)ities. ta7ation0 culture

More HR acti)ities. ta7ation0 culture
orientation0 ad!inistrati)e ser)ices
orientation0 ad!inistrati)e ser)ices

The need *or a 1roader "ers"ecti)e. cater to

The need *or a 1roader "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. ad@ust!ent0 s"ouses0 children
li)es. ad@ust!ent0 s"ouses0 children

Changes in e!"hasis as the $or%*orce !i7 o*

Changes in e!"hasis as the $or%*orce !i7 o*
e7"atriates and locals )aries. *airness
e7"atriates and locals )aries. *airness

Ris% e7"osure. e7"atriate *ailure0 terroris!

Ris% e7"osure. e7"atriate *ailure0 terroris!

2roader e7ternal in*luences. go)ern!ent

2roader e7ternal in*luences. go)ern!ent
regulations0 $a#s o* conduct
regulations0 $a#s o* conduct
Gi**erences 1et$een Go!estic HRM and
IHRM

Gi**erences 1et$een Go!estic HRM
and IHRM. )aria1les

Co!"le7it# in)ol)ed in o"erating in

Co!"le7it# in)ol)ed in o"erating in
di**erent countries0 )aried nationalities o*
di**erent countries0 )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

E7tent o* reliance o* MNC on ho!e countr#

E7tent o* reliance o* MNC on ho!e countr#
do!estic !ar%et
do!estic !ar%et

4aria1les that Moderate Gi**erences
1et$een Go!estic HR and IHRM

=ualities o* Glo1al Managers

Understand the $orld$ide 1usiness

Learn a1out !an# cultures

,or% $ith !an# t#"es o* "eo"le

Create cultural s#nerg#

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

Use cross8cultural 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* e7"atriation and

re"atriation

Ge"lo#!ent / getting the right !i7 o* s%ills in

the organi&ation regardless o* geogra"hical
location

Ino$ledge and inno)ation disse!ination /

!anaging critical %no$ledge and s"eed o*
in*or!ation *lo$

Talent identi*ication and de)elo"!ent / identi*#

ca"a1le "eo"le $ho are a1le to *unction
e**ecti)el#

2arriers to $o!en in IHRM

International ethics

Language 'e+g+ s"o%en0 $ritten0 1od#(

Main challenges in IHRM

Gi**erent la1or la$s

Gi**erent "olitical cli!ate

Gi**erent stage's( o* technological

ad)ance!ent

Gi**erent )alues and attitudes e+g+ ti!e0

achie)e!ent0 ris% ta%ing

Roles o* religion e+g+ sacred o1@ects0

"ra#er0 ta1oos0 holida#s0 etc

Educational le)el attained

Social organi&ations e+g+ social institutions0

authorit# structures0 interest grou"s0
status s#ste!s

E=UAL EM5LOJEE O55ORTUNITJ

Eual E!"lo#!ent
O""ortunities 'EEO(
!eans eli!inating
1arriers 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 !a7i!u!
"otential+

EEO "ractices include.

*airness at $or%0

hiring 1ased on !erit and

"ro!otion 1ased on talent+

It concerns all as"ects o*
e!"lo#!ent including recruit!ent0
"a# and other re$ards0 career
de)elo"!ent and $or% conditions
E=UAL EM5LOJEE O55ORTUNITJ

O23ECTI4ES

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

e)er#one>s right to eualit# o* o""ortunit#

TO eli!inate0 as *ar as "ossi1le0

discri!ination against "eo"le 1#
"rohi1iting discri!ination on the 1asis o*
)arious attri1utes

TO eli!inate0 as *ar as "ossi1le0 se7ual

harass!ent

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

1een discri!inated against or se7uall#
harassed+

E=UAL EM5LOJEE O55ORTUNITJ
Giscri!ination on the 1asis o*.8

Gisa1ilit#

Race

Age

Minorit#

Marital status
Eual e!"lo#!ent o""ortunit# act is
i!"le!ented 1# !an# countries to sto"
these discri!inations+

Gi)ersit# in $or%*orce
Differences 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 1oth the
organi&ation and the indi)idual+

Gi)ersit# is the !i7ture o* "eo"le in 1usiness0 $ith their )ariet# o*
1ac%grounds0 e7"eriences0 st#les0 cultures0 s%ills and co!"etencies+
Gi)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 different

among a "ariety of dimensions

Need to understand the impact of

culture
Learning:s *ro! the ,heel

NET,ORI ORGANISATIONS

International Gi)ision Structure

Glo1al 5roduct Gi)ision

Glo1al Area Gi)ision

Glo1al Hunctional Gi)ision Structure

Multinational Matri7 Structure

International Gi)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

Uni*ied a""roach to international o"erations

O*ten ado"ted 1# *ir!s still in

de)elo"!ental states o* international
1usiness o"erations

Se"arates do!estic *ro! international

!anagers 'not good(

Ma# *ind it di**icult to thin% and act

strategicall#0 or to allocate resources on a
glo1al 1asis

International Gi)ision Structure

*lobal Product Di"ision
Structural arrange!ent in $hich do!estic di)isions are gi)en
$orld$ide res"onsi1ilit# *or "roduct grou"s
Glo1al "roduct di)isions o"erate as "ro*it centers
Hel"s !anage "roduct0 technolog#0 custo!er
di)ersit#
A1ilit# to cater to local needs
Mar%eting0 "roduction and *inance coordinated on
"roduct81#8"roduct glo1al 1asis
Gu"lication o* *acilities and sta** "ersonnel $ithin
di)isions
Gi)ision !anager !a# "ursue currentl# attracti)e
geogra"hic "ros"ects and neglect others $ith long8
ter! "otential
Gi)ision !anagers !a# s"end too !uch ti!e ta""ing
local rather than international !ar%ets

*lobal Product Di"ision

Glo1al Area Gi)ision

Structure under $hich glo1al o"erations

organi&ed on geogra"hic 1asis
/
International o"erations "ut on sa!e le)el as
do!estic
/
Glo1al di)ision !angers res"onsi1le *or all 1usiness
o"erations in designated geogra"hic area
/
O*ten used 1# *ir!s in !ature 1usinesses $ith narro$
"roduct lines
/
Hir! is a1le to reduce cost "er unit and "rice
co!"etiti)el# 1# !anu*acturing in a region
/
Gi**icult to reconcile a "roduct e!"hasis $ith
geogra"hic orientation
/
Ne$ RKG e**orts o*ten ignored 1ecause di)isions are
selling in !ature !ar%et

Glo1al Area Gi)ision

Glo1al Hunctional Gi)ision
Structure
Structure that organi&es $orld$ide o"erations
"ri!aril# 1ased on *unction and secondaril# on
"roduct
/ A""roach not used e7ce"t 1# e7tracti)e co!"anies such as
oil and !ining
/ Ha)ored onl# 1# *ir!s needing tight0 centrali&ed
coordination and control o* integrated "roduction "rocesses
and *ir!s in)ol)ed in trans"orting "roducts and ra$
!aterials 1et$een geogra"hic areas
/ E!"hasi&es *unctional e7"ertise0 centrali&ed control0
relati)el# lean !anagerial sta**
/ Coordination o* !anu*acturing and !ar%eting o*ten di**icult
/ Managing !ulti"le "roduct lines can 1e )er# challenging
1ecause o* se"aration o* "roduction and !ar%eting into
di**erent de"ar!ents+

Glo1al Hunctional Gi)ision
Structure

Multinational Matri7 Structure
Structure is a co!1ination o* glo1al
"roduct0 area0 or *unctional
arrange!ents
/
Allo$s organi&ation to create s"eci*ic
t#"e o* design that 1est !eets its needs
/
As !atri7 design:s co!"le7it# increases0
coordinating "ersonnel and getting
e)er#one to $or% to$ard co!!on goals
o*ten 1eco!e di**icult
/
Too !an# grou"s to their o$n $a#

Multinational Matri7 Structure

Transnational Net$or% Structures
Multinational structural arrange!ent
co!1ining ele!ents o* *unction0 "roduct0
geogra"hic design0 $hile rel#ing on
net$or% arrange!ent to lin% $orld$ide
su1sidiaries
/
At center o* transnational net$or% structures
are nodes0 units charged $ith coordinating
"roduct0 *unctional0 and geogra"hic
in*or!ation
/
Gi**erent "roduct line units and geogra"hic
area units ha)e di**erent structures
de"ending on $hat is 1est *or their "articular
o"eration

Transnational Net$or% Structures

Control Mechanis!s