International HRM

By:
Rashmi Vaishya
PGDBM-HR
14

Definitions of IHRM
International human resource management is all
about the world wide management of human
resources Process of sourcing, allocating, and
effectively utilising their skill, knowledge, ideas, plan
and perspective in responding to TQM.
The process of procuring, allocating and effectively
utilizing human resources in an international business
is called International Human Resource Management
or IHRM.
International Human Resource Management is the
process of sourcing, allocating and effectively utilizing
human resources in a multinational organization.

Dimensions of IHRM

According to P.V.
Morgan: IHRM is
the interplay
among 3
dimensions:
HR Activities
Types of
employees
Types of
Countries

Purpose of IHRM
To enable the firm /, the multinational
corporations (MNCs), to be a
successful globally.

Objectives of IHRM

Remaining competitive throughout the world

Efficient
Locally Responsive
Flexible and adaptive
Capable to transforming learning across their
globally dispersed units

Types Of International Organisation

1.
2.
3.
4.

International Corporations
Multinational Corporations
Global Corporations
Transnational Corporations
Global Efficiency and Local Responsiveness of
Firms

Global
efficienc
y

Global

Transnational

High

International

Multinational

Low

Low
Local
responsiveness

High

Global Corporations
Maintains control over its
worldwide operations
(subsidiaries) through a
centralized home office.
They treat the entire world as a
single market
Examples : Matsushita

International Corporations
Domestic firms that builds on its
existing capabilities to penetrate
overseas market.
Example : Honda, General
Electric, P&G

Transnational Corporations
Provides autonomy to
independent country operations
but bring these operations
together into an integrated whole
through networked structure.
They combines the local
responsiveness of an MNC and
the efficiency of a global
corporation
Examples : Ford & Unilever

Multinational Corporations
MNCs have operating units
(subsidiaries) located in foreign
countries. Subsidiaries function as
autonomous units
Examples : Shell, Philips, Xerox

Difference Between Domestic

and International HRM
Broadly there are two major factors therefore which
differentiate domestic HRM from IHRM.
1. The complexities of operating in different countries / cultures
2. Employing different nationals and different categories of
workers across boarder.
Dowling (1999) has argued 6 factors for differentiate
1. A wide range of HR activities
2. The need for a broader perspectives
3. More Involvement in employees personal life.
4. Responsiveness to changes in staffing requirements as
international strategy changes.
5. Higher risk exposure
6. More external influences.

International HRM

Domestic HRM

Deals with a very broader

perspective.

Deals with a very narrow

perspective(only domestic country).

It considers the global laws prevailing

across the world.

It considers the laws prevailing in the

country where companys
headquarters located.

More involvement in emp. Lives

happens

There are standards policies for every

emp. working in the country.

External influences & factors affect

the co..

There is not much external

influences affecting to the co..

Workforce are from different culture

work together.

Workforce are from the home country

works.

There are risk factors involvedTerrorism

A minimal of risk is involved as

compared.

Complexity involved in handling

different people from different
countries.

Relatively easy to handle as people

belong to same country.

Attributes of sr. mgt. differs as

involves dealing globally.

Attributes tends to be the same.

Involvement of diff. cultures affect

the orgn. culture

As emp. are of same country,

adoption of culture is feasible.

IHRM includes all HR functions but

There is std. technique and method to

Role of International
HRM

International human resource management is the basis of success of

any global multinational organization. International HRM enhances
employees effectiveness to achieve goals of the organization and meet
the needs; to develop employees to assume more diverse tasks,
assignments, face challenging situations and better understand the
cultural variations across the nations.
IHRM department deals with heterogeneous functions and has to give
additional focus on various aspects, such as:
1. More involvement in the employees personal life.
2. Deal with different groups of employees i.e. PCN, HCN and TCN for
which HR policies and practices may differ. International HR managers
have to understand cultural differentiation in multicultural
environment.
3. Manage external influences, i.e host government authorities, business
and other interest pressure and labour groups, etc.
4. Lay different emphasis on management training to deal diverse
workforce, their orientation and to meet international environment and
5. Provide guidance on taxation and compensation aspects.

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.g. spoken, written, body)
Different labour laws, political climate, stage(s) of
technological advancement, values and attitudes e.g.
time, achievement, risk taking
Roles of religion e.g. sacred objects, prayer, taboos,
holidays, etc
Educational level attained
Social organizations e.g. social institutions,

Limitations in IHRM
Management is basically the principle based on local
cultures, traditions, practices and needs of the
organizational growth. It is not universal for
everywhere, specially in the field of human resources
management.
HRM methods and systems developed by one society
can not always be transferred and applied to another.
HRM and industrial relations practices differ across
countries as these have their historic origin in
countries.
Personnel management and industrial relations are
embedded in societal rules, norms, values, ideologies
and no MNC can afford to ignore the influence of local
culture.

THANK
YOU