You are on page 1of 25

By: Alpana Yadav Bhawana Jyoti Komal Dagar Parul Sohu Sheena Goel

What is IHRM?

International HRM (IHRM) is the process of:
 Procuring,  Allocating, and  Effectively utilizing human resources in a multinational

corporation,  While balancing the integration and differentiation of HR activities in foreign locations.

Factors that Influence the Global Work Environment .

Forces for Change Global competition  Growth in mergers. acquisitions and alliances  Organization restructuring  Advances in technology and telecommunication  .

Impacts on Multinational Management     Need for flexibility Local responsiveness Knowledge sharing Transfer of competence .

Managerial Responses Developing a global “mindset” More weighting on informal control mechanisms Fostering horizontal communication Using cross-border and virtual teams Using international assignments      .

Influenced by more external sources Involves a greater level of risk than typical domestic HRM. .IHRM V/S DOMESTIC HRM       Encompasses more functions. Requires more involvement in employees’ personal lives. More heterogeneous functions. Involves constantly changing perspectives.

inter-firm agreements has risen dramatically Social. and political developments throughout the world changed the way global business is conducted .TRENDS      Integration of the world’s economies and business globalization continues unabated International trade is growing more rapidly than world output Foreign direct investment (FDI) flows are increasing The number of cross-border. economic.

contd. The external environment greatly influences HRM activities  Each country has its own:   Laws  Business customs  Workforce characteristics  Political climate  The most difficult challenge to overcome is the “people challenge” .

communication and gauge Language and communication .Issues in IHRM      Managing international assignments Employee and family adjustment Selecting the right person for a foreign assignment Culture.

political and religious groups Heightened exposure to risks such as health. exchange rates Compensation plans Working directly with the families of employees More involvement in employees personal life. facility etc. human and financial consequences of mistakes . Different HR systems for different geographic locations More complex external constituencies.Other International Issues to be addressed by HR         Clarifying taxation issues Coordinating foreign currencies. terrorism. foreign Governments. legal issues.

Barriers to effective global HRM Variations  Perception of HR  Attitude and actions of headquarters towards HR  Resistance to change  Cultural differences in learning and teaching styles  .

spoken.Main challenges in IHRM        High failure rates of expatriation and repatriation Deployment – getting the right mix of skills in the organization regardless of geographical location Knowledge and innovation dissemination – managing critical knowledge and speed of information flow Talent identification and development – identify capable people who are able to function effectively Barriers to women in IHRM International ethics Language (e. body) . written.g.

g. status systems . achievement. holidays. social institutions. prayer.contd. interest groups.        Different labor laws Different political climate Different stage(s) of technological advancement Different values and attitudes e. sacred objects. risk taking Roles of religion e. time.g. etc Educational level attained Social organizations e.g. taboos. authority structures.

The Cultural Nature of Global HRM Cultural differences between nations can influence the effectiveness of HRM policies and practices  HRM must be congruent with the cultural orientation of the workers  Hefstede says cultures vary in five dimensions:       Individualism versus collectivism Power distance Avoidance of uncertainty Masculinity Long-term versus short-term orientation .

The Concept of “Fit” in Global HRM        “Fit” is the degree to which HRM policies are congruent with the: Strategic plan of the organization Work-related values of the foreign culture Internal fit: making sure HRM policies facilitate the: work values and motivation of employees External fit: the degree to which HRM matches the: context in which the organization is operating .

 Discrepancies in International compensation: The “discrepancies” most cited are listed in the order of how often they were mentioned as being major problems:  • Base Salary • Overseas Premiums • Housing Allowances • Education Allowances • Cost of Living Allowances • Tax Equalization • Repatriation Allowances • Performance Based Incentive .

regardless of the managers country of origin  The challenge is to capitalize on the diversity of a global workforce without suppressing cultural heritage  .The biggest HR challenge facing any globally oriented corporation is finding competent managers  An expatriate manager (PCN) comes from the corporation’s home nation  Relocation can be troublesome.

The Expatriate Manager in the MNC      Managing the expatriate’s adjustment process is a primary focus of GHRM The difficulty of this task has increased because sales and production shifted closer to markets There is higher use of host country and third country management There is a concurrent increase in the number of “inpats” Both inpats and expats can have a difficult time adapting to their new surroundings .

Selecting the Expatriate Manager  Factors associated with expatriate success:  Good technical and language skills  Strong desire to work overseas  Specific knowledge of overseas culture  Well-adjusted family situation  Complete support of spouse  Behavioral flexibility  Adaptability and open-mindedness  Good relational ability  Good stress management skills .

Legal and Ethical Climate of GHRM  International business is conducted in a maze of:  International trade agreements  Parent country laws  Host country regulations  Ethical behavior challenges may also be encountered:  Environmental regulation. may be weaker  “Gift giving” or “greasing” may be common practice .

contd. Regulations regarding employment discrimination vary from country to country  Ethical dilemmas between profits and the preservation of basic human rights may also exist  Resolving ethical issues is not an easy task  .

Labor Relations & the International Corp.  Labor relations issues that may arise in the international environment:  Unions  Labor laws  Less emphasis on written contracts  How much participation employees are entitled to in HRM policies .

the chaebol.  Employee participation is guaranteed in Germany  South Korea’s giant industrial firms. control every aspect of worker’s lives  Government business regulations may differ  In Singapore.contd. annual wage adjustments are set by a national council and strikes are nearly impossible  There is no simple solution to the labor relations problems with which MNCs and GCs are confronted  Labor has been trying to establish global labor organizations .