International Human Resource Management

(Code: 6PGDM02HR)
PGDM-trimester-6

1. What are the key differences in salary compensation for PCN’s and TCN’s? Do these
differences matter?

Ans. PCNs (Parent Country Nationals) and TCNs (Third Country Nationals) are terms commonly used
in the context of international business and expatriate assignments. The key differences in salary
compensation between PCNs and TCNs stem from various factors, including the cost of living, skills
and expertise, availability of local talent, and company policies. Here are some general points of
differentiation:

Cost of Living: PCNs are typically from the home country of the multinational corporation (MNC),
while TCNs are from a country other than the home country or the host country. The salary
compensation for PCNs may be higher due to the potentially higher cost of living in the home country,
whereas the salary for TCNs may be adjusted according to the cost of living in their home country or
other relevant factors.

Skills and Expertise: PCNs are often selected for their specialized skills, knowledge, and experience
that may be lacking in the host country. Therefore, they may command higher salaries reflecting their
expertise. On the other hand, TCNs may be hired for their specific skills that are difficult to find locally
but may not necessarily command the same salary levels as PCNs.

Local Talent Availability: If the host country has a pool of skilled workers available, the need to bring
in PCNs or TCNs may be reduced. In such cases, the salary compensation for both PCNs and TCNs
might be influenced by the prevailing local market rates.

Company Policies and Practices: Some multinational corporations have standardized compensation
packages for expatriates, regardless of their nationality. However, others may have different
compensation structures based on the employee's nationality, reflecting factors such as taxation,
benefits, and exchange rates.

These differences in salary compensation can matter significantly, both for the individuals involved and
for the company. For PCNs, higher salaries may be necessary to attract and retain talent willing to take
on the challenges and uncertainties of working abroad. For TCNs, the salary offered may impact their
willingness to accept assignments in foreign countries. From the company's perspective, striking the
right balance between attracting talent, managing costs, and ensuring equity and fairness across the
workforce is crucial for the success of international assignments and overall business operations.
2. Outline the main characteristics of the four approaches to international HRM.

Ans. International HRM (Human Resource Management) takes different approaches depending on a
company's global strategy and priorities. Here's a breakdown of the four main approaches:

Ethnocentric Approach:

• Focus: Home country dominance.

• Key Characteristics:
o Management positions filled by Parent-Country Nationals (PCNs) from the company's
headquarters country.
o Home country practices and policies are applied globally, with limited adaptation to
local cultures.
o Suitable for companies with strong home country expertise and tight control needs.

Polycentric Approach:

• Focus: Decentralization based on local needs.

• Key Characteristics:
o Host-Country Nationals (HCNs) are preferred for managerial roles in subsidiaries.
o HR practices and policies are adapted to fit the local culture and legal framework.
o Often used by companies operating in multiple countries with diverse cultures.

Regiocentric Approach:

• Focus: Regional talent pool optimization.

• Key Characteristics:
o Best talent, regardless of nationality, is sought within a specific region
o Creates a pool of regional managers who can navigate cultural similarities within the
region.
o Useful for companies with a strong regional presence.

Geocentric Approach:

• Focus: Best talent wins globally.

• Key Characteristics:
 o Selection and promotion based on global competence, not nationality.
o Highly mobile workforce with international experience.
o Policies and practices designed for a global workforce.
3. What is the difference between a global manager and a global mind-set?

Ans. The difference between a global manager and a global mindset lies in their focus and application:

Global Manager:

Focus: A global manager refers to an individual who is responsible for overseeing and managing
international operations or teams across different countries.

Application: Global managers typically have the authority and responsibility to make decisions that
impact the organization's global strategy, operations, and performance.

Global Mindset:

Focus: A global mindset refers to a set of attitudes, perspectives, and skills that enable individuals to
understand and adapt to different cultures, markets, and business practices around the world.

Application: A global mindset is not limited to managers; it can be developed by anyone, regardless
of their position in the organization. It is about having an open-minded approach to diversity, being able
to think globally while acting locally, and being sensitive to cultural nuances and differences.
4. What are the main similarities and differences between domestic and international HRM?

Ans.

Similarities:

Human Resource Planning: Both domestic and international HRM involve forecasting the
organization's future human resource needs and planning to meet those needs effectively.

Recruitment and Selection: Both involve the process of attracting, screening, and selecting qualified
candidates for various positions within the organization.

Training and Development: Both domestic and international HRM focus on training and developing
employees to enhance their skills, knowledge, and abilities.

Performance Management: Both involve managing and evaluating employee performance to ensure
that individual and organizational goals are met.

Compensation and Benefits: Both domestic and international HRM involve designing and
administering compensation and benefit packages to attract, retain, and motivate employees.

Differences:

Cultural and Legal Differences: International HRM must consider cultural differences, as well as
legal and regulatory requirements, in multiple countries, which may not be as prevalent in domestic
HRM.

Staffing Approaches: International HRM may involve different staffing approaches, such as
ethnocentric, polycentric, geocentric, or regiocentric, depending on the organization's global strategy
and the availability of talent in different locations. Domestic HRM typically focuses on a single national
context.

Complexity and Scope: International HRM is often more complex and has a broader scope than
domestic HRM due to the additional challenges of managing a diverse workforce across multiple
countries and cultures.

Training and Development Challenges: International HRM may face challenges in providing training
and development programs that are effective across different cultures and languages, which may not be
as significant in domestic HRM.

Compensation and Benefits Considerations: International HRM must consider currency fluctuations,
cost of living differences, and local market conditions when designing compensation and benefit
packages, which may not be as relevant in domestic HRM.
5. What is GLOBE Model in IHRM?

Ans. The GLOBE (Global Leadership and Organizational Behaviour Effectiveness) Model in
International Human Resource Management (IHRM) is a framework developed by a group of
researchers led by Robert J. House in the early 2000s. The model seeks to identify the dimensions of
culture that influence organizational behaviour and leadership across different countries.

The GLOBE Model is based on data collected from 62 countries and consists of nine cultural
dimensions that are relevant for understanding the differences in organizational behaviour and
leadership practices:

Power Distance: The degree to which members of a society expect power to be distributed unequally.

Uncertainty Avoidance: The extent to which a society tolerates uncertainty and ambiguity.

Collectivism vs. Individualism: The degree to which individuals are integrated into groups.

Gender Egalitarianism: The extent to which a society minimizes gender discrimination and promotes
gender equality.

Assertiveness: The degree to which individuals are assertive, confrontational, and aggressive in social
relationships.

Future Orientation: The extent to which a society encourages and rewards future-oriented behaviors
such as planning and investing for the future.

Performance Orientation: The degree to which a society values and rewards performance and
excellence.

Humane Orientation: The extent to which a society emphasizes kindness, generosity, and compassion.

Institutional Collectivism: The degree to which organizational and societal practices encourage and
reward collective distribution of resources and collective action