You are on page 1of 21

1.

Introduction

BM025-3-3
International Human
Resource Management

Chapter Objectives
Define key IHRM terms
Review expatriate management evolution
Outline differences between domestic and
international HRM
Discover the increasing complexity and
potential challenges of current IHRM

Module Code and Module Title

Title of Slides

Terms
HRM
IHRM

NAFTA
HCN
PCN
TCN

MNE
culture shock

Module Code and Module Title

expatriate
inpatriate

Title of Slides

IHRM Chapter 1

Figure 1-1: Inter-relationships between approaches in the field

Module Code and Module Title

Title of Slides

1/4

Figure 2-1: A model of IHRM

Module Code and Module Title

Title of Slides

1/5

HRM Activities
An organizations HRM activities include:
1. Human resource planning
2. Staffing (recruitment, selection, placement)
3. Performance management
4. Training and development
5. Compensation (remuneration) and benefits
6. Industrial relations

Module Code and Module Title

Title of Slides

IHRM Chapter 1

Differences between domestic HRM & IHRM


The complexity of IHRM can be attributed to six factors:

1. More HR activities
2. The need for a broader perspective
3. Move involvement in employees personal
lives
4. Changes in emphasis as the workforce mix
of expatriates and locals varies
5. Risk exposure
6. Broader external influences
Module Code and Module Title

IHRM Chapter 1

Title of Slides

What is an expatriate?
An employee who is working and
temporarily residing in a foreign country
Some firms prefer to use the term
international assignees
Expatriates are PCNs from the parent
country operations, TCNs transferred to
either HQ or another subsidiary, and
HCNs transferred into the parent country

Module Code and Module Title

Title of Slides

1/8

Figure 1-3: International assignments create expatriates

Module Code and Module Title

Title of Slides

1/9

Differences between domestic HRM & IHRM


The complexity of IHRM can be attributed to six factors:

1. More HR activities
2. The need for a broader perspective
3. Move involvement in employees personal
lives
4. Changes in emphasis as the workforce mix
of expatriates and locals varies
5. Risk exposure
6. Broader external influences
Module Code and Module Title

IHRM Chapter 1

Title of Slides

10

More HR Activities

International taxation
International relocation
Language translation services
Host government relations

Module Code and Module Title

Title of Slides

1/11

Broader Perspective
No more a uniform compensation policy
Designing programs for more than one
national group of employees.
International perspective of expatriate
benefits

Module Code and Module Title

Title of Slides

1/12

More involvement in personal


lives

Housing arrangements
Benefits and allowances
Schooling for children
Spouse assistance

Module Code and Module Title

Title of Slides

1/13

Changes in emphasis on
workforce mix
Foreign operations will mature after a
period of time
The need for PCNs and TCNs will decline
Local staff become more trained
Will change planning, staffing, training and
development

Module Code and Module Title

Title of Slides

1/14

Risk Exposure
Human and financial costs of failure is
high
Direct costs, such as salaries and benefits
Other costs such as damaged
relationships with host country
Risks also include terrorism, diseases etc
Eg, World Trade Centre and SARs

Module Code and Module Title

Title of Slides

1/15

Broader External Influence


Economy
Political aspect
Governments Hiring policies

Module Code and Module Title

Title of Slides

1/16

Table
1-2

World top ten non-financial transnational corps.,


ranked only by foreign assets

Module Code and Module Title

Title of Slides

17

IHRM Chapter 1

Variables that moderate differences between


domestic HRM and IHRM
1. The complexity involved in operating in different
countries and employing different national
categories of employees
2. The cultural environment
3. The industry (or industries) with which the MNE is
primarily involved
4. The extent of reliance of the MNE on its homecountry domestic market
5. The attitudes of senior management

Module Code and Module Title

Title of Slides

18

IHRM Chapter 1

Figure
1-4

A model of the variables that moderate differences between domestic

Module Code and Module Title

and international HRM

Title of Slides

19

IHRM Chapter 1

Discussion Questions
1. What are the main similarities and differences
between domestic and international HRM?
2. Define these terms: IHRM, PCN, HCN, and TCN.
3. Discuss two HR activities in which a MNE must
engage that would not be required in a domestic
environment.
4. Why is a greater degree of involvement in employees
personal lives inevitable in many IHRM activities?
5. Discuss at least two of the variables that moderate
differences between domestic and international HR
practices.

Module Code and Module Title

Title of Slides

20

IHRM Chapter 1

Tutorial Discussion
Impact of Globalisation on Human Resource Management.
Identify 5 challenges that you as an International HR Manager
would face. Provide a solution (how would you overcome) for
each of these challenges.
Discuss in groups of 4

Module Code and Module Title

Title of Slides