INTERNATIONAL HUMAN RESOURCE MANAGEMENT

WHAT IS HRM?
• HRM refers to those activities undertaken by an organization to utilize its human
resources effectively.
• These are: HR planning, staffing, performance management, training and development,
compensation and benefits, industrial relations.

WHAT IS IHRM?
• International Human Resource Management (IHRM) is the procurement, allocation,
utilisation and motivation of human resources in international businesses.
• The Host Country -where a subsidiary is located
• The Home country where the firm is headquartered
• ‘Other’ countries may be source of labour, finance and other inputs.

WHAT IS EXPATRIATE?
• An expatriate is an employee who is working and temporarily residing in a foreign
country.

DIFFERENCES BETWEEN INTERNATIONAL AND DOMESTIC HRM

• Dowling argues that the complexity of International HRM can be attributed to six factors:
• More HR activities
• The need for a broader perspective
• More involvement in employee’s personal lives
• Changes in emphasis as the workforce mix of expatriates and locals varies
• Risk exposure
• Broader external influences

MORE HR ACTIVITIES
• International Taxation: Domestic and host country tax liabilities, tax equalization
policy,should be no tax incentive or disincentive.
• International relocation and orientation: predeparture training,immigration and travel
details, providing housing, shopping , medical care and recreation and schooling information,
finalizing compensation details.
• Administrative services for expatriates
• Host-government relations
• Language translation services
 THE NEED FOR A BROADER PERSPECTIVE
• Designing and administering programmes for more than one national group of
employees.
MORE INVOLVEMENT IN EMPLOYEES’ PERSONAL LIVES
• A greater degree of involvement in employees’ personal lives is necessary for the
selection, training, and effective management of both PCN and TCN employees.
VARIETY OF WORKFORCE MIX
• IHRM deals with employees drawn from a number of nations in contrast with domestic
HRM, where employees are drawn from one nation.
RISK EXPOSURE
• The human and financial consequences of failure in the international arena are more
severe than in domestic business.
BROADER EXTERNAL INFLUENCES
• The major external factors that influence IHRM are the type of government, the state of
the economy and the generally accepted practices of doing business in each of the various host
countries in which the multinationals operates.

CULTURAL ENVIRONMENT
• Members of a group or society share a distinct way of life with common values, attitudes
and behaviours that are transmitted over time in a gradual, yet dynamic process.
• Culture shock- A phenomenon experienced by people who moves across culture.
INDUSTRY TYPE
• Multidomestic industry, is one in which competition in each country is essentially
independent of competition in other country. Example- Retail, distribution, insurance.
• Global industry, is one in which a firm’s competitive position in one country is
significantly influenced by its position in other country.

RELIANCE OF THE MULTIDIMENSIOANLS ON ITS HOME COUNTRY DOMESTIC

MARKET
• Size of the domestic market: If small, ‘go international’.
• Reliance on the domestic market