Self-reflection on IHRM (unit-1&2)

Laizu Akter
MBA in HRM
ID: HRMJD11/19
Reg: 05495
Session: 2019-20
 Unit-1
International human resource management can be defined as the set of activities involved in
hiring, managing performance, compensation, training and relations with employees hired to
manage internal operations of a company, with a view to ensure the success of their international
business and strategies.

International human resource management bears both functional and strategic resemblance to
human resource management. Functionally it performs almost the same set of activities as human
resource management – recruitment, selection, performance management, compensation,
training, industrial relations, career management etc. Strategically international HRM is closely
linked to the business strategy of the organization.

International Human Resource Management deals with at least three types of employees based
on their country of origin:

Parent Country Nationals (PCNs): Employees belonging to the country where a company’s
headquarters are located are called as parent country nationals.

Host Country Nationals (HCNs): Employees belonging to country where the company has set
up a subsidiary or a manufacturing facility are called host country nationals.

Third Country Nationals (TCNs): Employees who work in the home or host country facility of
the company but are not nationals of either are called third country nationals.

Difference between Domestic and International Manager

Domestic Manager: A domestic manager’s work concerns the country in which he/she works
in. Depending on the nature of the business, a domestic manager’s work will depend on the
culture of the state. There won’t be a language barrier as your business will operate in the state’s
main language(s). Though there is always a need for market research in all organizations, a
domestic manager may find this easier to do as it’s likely you’re familiar with the language of
your country and its general trends.
International Manager: An international manager’s focus is on business targets within a
particular country or an entire region. This means they could be dealing with a new culture,
multiple languages, and new rules and regulations. The restrictions on multi-nationals are
greater, and so the work of an international manager can be more varied and complex than that of
a national/domestic manage. An international manager will have to spend more time on market
research in order to understand the different trends.

Issues in IHRM

There are various complexities of operating in different countries and employing different
national categories of employees. And such complexities can differentiate domestic HRM from
IHRM. Dowling argues that the complexity of IHRM can be attributed to many of factors such
as more HR attitude, the need for broader perspective, more involvement of employee’s personal
lives, mixing of work force of various countries, risk exposure and broader external factor
influences. Some major external factors such as the type of government, the state of economy,
political stability, cultural and ethical issues, industrial relation and labour laws, unionism,
working culture, food, taxation, health and safety issues, amusement etc. of a nation is also an
important concern for IHRM.

All the issues are related with management of the people in a multinational context. The issues
are to be resolved, unless the whole edifice of international human resource management would
be destroyed. The main issues are:

▪ Managerial issues
▪ Socio-cultural issues

International Business Strategies

International business firms can use four basic strategies
International strategy: International business firms adapt this strategy in order to transfer the
valuable skills and products developed in the home country to the foreign markets where such
Multidomestic strategy: International business firms adapting this strategy customize products
and marketing strategies to the host country requirements and environment. skills and products
Global strategy: International business firms adapting this strategy concentrate on profit earning
though cost minimization are not available.
Transnational strategy: international business firms should pursue low cost leadership-cum-
local responsive or customization strategy due to intensive global competition

Understanding Culture

Culture is a system of shared meaning and understanding held by the members of the
organization/society that distinguishes from others. Culture is mostly determined by the
economic level and conditions and climate of a region or a country. Since economic level and
conditions and climate differ from region to region and country to country, culture also differs
from region to region and country to country.

Culture: Its Coverage & Determinants

Culture is made up of assumptions, values, beliefs and attitudes set by the society based on the
changing environment. Individuals set their minds, based on the society's culture in which they
are brought up in addition to their own psychological set up mostly shaped by the genetically
characteristics, to react to and interact with the environment in certain ways.
Cultural factors influence the cultural formation and thereby behavior

Knowledge: People gain knowledge from the influence of environmental factors as well as
interaction with the environment.
Beliefs: Belief is a cognitive representation of one's relevant environment may be right or wrong,
Value: Value is an "enduring belief that a specific mode of conduct or end state of existence is
personally or socially preferable to an opposite or converse model of conduct or end-state of
existence.” good or bad and cause and effect relationships.
Attitude: Attitude is defined as, "a learned predisposition to respond in a consistently favorable
or unfavorable manner with respect to a given object."
Behavior: Knowledge provides inputs to beliefs, values and attitude. In turn, belief influences
values and values influence attitudes. These three factors together form culture and which turn
result in behavior
Cross-Cultural Theory
Cross-cultural communication theories explain phenomena related to cross-cultural research.
Cross-cultural research compares and contrasts people's communication across diverse cultures
and explains the consequences of these differences.
 Unit-2
Diversity is, and has been, one of the hot topics in business and workplaces for some time now.
The consensus, for the most part, is that diversity does bring benefits. Whether those benefits
are increased innovation, more profitability, teams with better problem solving skills, something
else or all of these depend on the context, but few would argue that diversity brings no benefits.

Cross-Cultural Differences in the Workplace

Having a diverse workplace has many benefits but can also come with challenges for managers
as they navigate ways to help people from different backgrounds and experiences find common
ground in the workplace.

Reaction to Cultural Improprieties: Culture imposes norms for people's behavior in different
situations. People feel uneasy, anxious and threatened when they violate the cultural norms.
People who don't follow cultural values and norms are often punished or looked down or
condemned by others of the society.

Cultural Sensitivity

Cultural sensitivity is being aware that cultural differences and similarities between people exist
without assigning them a value positive or negative, better or worse, right or wrong. All cultures
are good and therefore employees and managers of global companies, when they work in foreign
countries should avoid ethnocentric/ parochial behavior.

Ethnocentrism: A way of believing and saying that people tend to believe their way of doing
something is always best/right and impose such beliefs on others.

Cultural Attitude and International Business: The international businessmen should eliminate
the SRC effect in order to understand the foreign cultures as they have to carry on business under
the existing cultures. The businessman should eliminate the influence of SRC as it helps to
prevent a transfer of personal culture to the overseas market. This awareness helps the manager
to formulate customer-oriented strategies and avoid the possible failures.
Types And Strategies of Organization Culture

Strategies for managing workforce diversity or cultural diversity are five-fold

Individual Strategies: Individuals with broad minded approach can formulate strategies based on
the situations, ego-state and cultural background of other persons at the workplace in order to
manage the diversified cultural situations. Individual strategies to manage cultural diversity are
not inclusive.

Group Strategies to Cultural Diversity: Group of employees belong to the same culture can
understand the cultures of other groups and cultural differences between the two groups. They
can also formulated appropriate strategies for managing cultural diversity. The group strategies
include: Knowledge sharing, Advising & cautioning, Cultural exchange through socialization
programs

Organizational Strategies to Cultural Diversity: Organizations can formulate effective strategies

to manage cultural diversity at the work place, in addition to the strategies adapted by individuals
and groups. Organizational strategies include: Recruitment and Selection Strategies,
Organizational Policies and Practice, Cultural Training, Breaking the Glass Ceilings, Formal
Socialization Programs, Structuring Work Teams, Use of Counsellors, Communication.

National Strategies: National strategies towards management of cultural diversity include:

● Legislative approach towards equal employment opportunities

● Efforts of the cultural associations/societies

● Efforts of the diplomatic missions

International Strategies: International Strategies towards diversity management include:

▪ Economic Unions and Regional Integrations

▪ Efforts of International Trade Organizations and Financial Institution
▪ Efforts of the MNCs' Headquarters.