Chapter 1ihrm

Chapter 1
INTRODUCTION
Chapter 1
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
1 of 32
START
Chapter 1 Click on an item to

go to its section.
INTRODUCTION
Click on the book
cover below to
return to this table
of contents.
 Vocabulary
 Objectives
 Scope of book
 Defining IHRM
 Domestic vs. international
 Variables that moderate the differences
 The cultural environment
 Industry type
 Extent of MNE reliance on HC market
 Senior mgmt. attitudes to international ops.
Chapter 1
2 of 32
Vocabulary
 HRM, IHRM
 PCN, HCN, TCN
 MNE
 expatriate = international assignee, inpatriate
 repatriation
 equity issues
 psychological contract
 culture shock
 convergence/divergence hypotheses
 Porter’s value chain model
 index of transnationality
 global mindset
 asymmetric events
 environmental dynamics
Chapter 1
 organizational culture
3 of 32
Objectives
1. Define IHRM and key terms
2. Introduce & review expatriate assignment mgmt.
3. Outline differences between domestic & IHRM
4. Detail a model that captures these differences
5. Discover complexity & increasing challenges to
existing IHRM practices and models
Chapter 1
4 of 32
Figure 1.1
Inter-relationships between approaches to the field
Chapter 1
5 of 32
Defining international HRM
 Refers to those activities undertaken by an
organization to effectively utilize its human
resources.
Chapter 1
6 of 32
HRM activities
1. Human resource planning
2. Staffing: recruitment, selection, placement
3. Performance management
4. Training & development
5. Compensation & benefits
6. Industrial relations
Chapter 1
7 of 32
Morgan’s “3-D” definition of IHRM
1. The HR activities of
procurement, allocation & utilization
2. The countries where IHRM occurs:
» Host-country where subsidiary may be located
» Parent-country where firm is headquartered
» Other-countries that may be
source of labor, finance & other inputs
3. The employees of an international firm:
» HCNs (host country nationals)
» PCNs (parent .. .. )
» TCNs (host .. .. )
Chapter 1
8 of 32
Figure 1.2
International assignments create expatriates
Chapter 1
9 of 32
Stahl-Björkman-Morris def. of IHRM
The field of IHRM covers
 All issues related to managing the global
workforce and firm outcomes
 A wide range of HR issues facing MNEs in
different parts of their organizations
This definition includes comparative analyses

of HRM in different countries.
Chapter 1
10 of 32
IHRM is more complex than
domestic HRM
IHRM has …
1. more HR activities
2. a need for a broader perspective
3. more involvement in employees’ personal lives
4. changes of emphasis as
the mix of expatriates & locals varies
5. more risk exposure
6. broader external influences
Chapter 1
11 of 32
IHRM has international HR activities
■ International taxation
■ International relocation & orientation
■ Administrative services for expatriates
■ Host-government relations
■ Language translation services
Chapter 1
12 of 32
START
Click on an item to
go to its section.
International Taxation
Click on the book
cover below to
of contents.
 Variation in tax laws

 Time lag between completion of assignment
and settlement of tax lib.
 Tax equalization policies must be designed to
ensure that there is no tax incentive or
disincentive.
 Services of major accosting firm
Chapter 1
13 of 32
International relocation involves:
■ Arranging for pre-departure training
■ Providing immigration & travel details
■ Providing housing, shopping, medical care,
recreation & schooling information
■ Finalizing compensation details such as:
 Delivery of salary overseas
 Determination of overseas allowances
 Taxation treatment
Chapter 1
14 of 32
• Administration Services for Expatriates
Services in host countries
Ethical question arise
 Host Govt Relations
Host govt relations help resolve potential
problems.
 Language Translation Services
Role of translation group in HR dept is often
expanded to provide translation services
Chapter 1
15 of 32
START
Click on an item to
go to its section.
The need for a broader perspective

Click on the book
cover below to
of contents.
 Broader view of issues

 Administer programs for single national group
More involvement in employees personal life

 A greater degree of involvement in employees
personal lives is necessary for selection training and
effective management of PCNs and TCNs
employees
Chapter 1
16 of 32
Changes in emphasis as the workforce START
Click on an item to
go to its section.
mix of PCNs and HCNs varies Click on the book

cover below to
of contents.
 More trained locals become available and

resources previously allocated now transferred
to areas like local staff selection, training etc
 The need to change emphasis in HR

operations as the foreign subsidiary matures
 A factor that would broaden the responsibilities
of local H.R activities
Chapter 1
17 of 32
START
Click on an item to
Risk Exposures go to its section.
Click on the book

cover below to
of contents.
 Frequently the Human and financial consequences

of failure in the international area are more severe
than in domestic business.
 Expatriate failure
 Premature return
 Under-performance
 Direct costs of Failure (salary, training,
traveling)three times higher than domestic cost
 Indirect costs(loss of foreign market share, damage
to key host country relationships
Chapter 1
 Terrorism
18 of 32
START
Click on an item to
Broader external influences go to its section.
Click on the book

cover below to
of contents.
 Type of government
 State of the economy
 Generally accepted practices of doing
business
Chapter 1
19 of 32
Four more moderators
in addition to IHRM complexity
1. The cultural environment
2. The industry(ies) with which the MNE is
primarily involved
3. The extent to which the MNE relies on
its HC domestic market
4. The attitudes of senior management
Chapter 1
20 of 32
Figure 1.3
A model of all 5 variables that moderate the differences
between domestic and international HRM
Chapter 1
21 of 32
Culture matters
■ Culture shock
■ Emic ≠ etic
■ Emic refers to culture specific aspects of behaviors and
etic refers to culture common aspects
■ Convergence hypothesis(Etic)
■ Research tends to focus on macro level
■ There were principles of sound mgt that held regardless of the
national environment.
■ Universality of the sound mgt practices would lead to societies
becoming more and more alike in future
■ Divergence hypothesis(emic)
■ Research tends to focus on micro level.
Chapter 1
22 of 32
The MNE industry type continuum
An MNE performs somewhere in this range:
Multidomestic Industries Global Industries
Examples
retailing, distribution, insurance airlines, semiconductors, copiers
International strategy
Collapses to a Must integrate activities on a
series of domestic strategies. worldwide basis.
Chapter 1
23 of 32
The value chain also known as Porter’s Value Chain Analysis is a business
management concept that was developed by Michael Porter
 According to Porter (1985), the primary activities are:
 Inbound Logistics - involve relationships with suppliers and include all

the activities required to receive, store, and disseminate inputs.
 Operations - are all the activities required to transform inputs into outputs
(products and services).
 Outbound Logistics - include all the activities required to collect, store,

and distribute the output.
 Marketing and Sales - activities inform buyers about products and

services, induce buyers to purchase them, and facilitate their purchase.
Chapter 1
 Service - includes all the activities required to keep the product or service
working effectively for the buyer after it is sold and delivered.
24 of 32
START
Click on an item to
Secondary activities are: go to its section.
Click on the book

cover below to
 Procurement - is the acquisition of inputs, or resources, for the firm. of contents.
 Human Resource management - consists of all activities involved in

recruiting, hiring, training, developing, compensating and (if
necessary) dismissing or laying off personnel.
 Technological Development - pertains to the equipment, hardware,

software, procedures and technical knowledge brought to bear in the
firm's transformation of inputs into outputs.
 Infrastructure - serves the company's needs and ties its various

parts together, it consists of functions or departments such as
accounting, legal, finance, planning, public affairs, government
relations, quality assurance and general management.
Chapter 1
25 of 32
Laurent’s steps for true IHRM:
1. Parent org. recognizes that its HRM reflects
some assumptions & values of own home culture.
2. Parent org. recognizes that its own peculiar ways are
neither universally better nor worse than others –
just different & likely to exhibit strengths & weaknesses,
particularly abroad.
3. Parent org. recognizes that its foreign subsidiaries may prefer
other ways to manage people – ways that are neither
intrinsically better nor worse, but possibly more effective locally.
4. Headquarters is willing to acknowledge cultural differences &
take steps to make them discussable & therefore usable.
5. All parties build belief that cross-cultural learning invites
more creative & effective ways of managing people.
Chapter 1
26 of 32
Reliance on Domestic Market
 Small Domestic Market
 One of the key drivers for seeking new international
markets
 Index of transnationality (ratio of foreign assets)
Chapter 1
27 of 32
Table 1.1
The world’s top 10 non-financial TNC, ranked by TNI, 2008a
1
Chapter 2
28 of 32
What does senior mgmt. think?
Some of the changes required

to truly internationalize HR
have more to do with a global mindset

than with behaviors.
Chapter 1
29 of 32
An MNE case study result
MNEs fail primarily because of
a lack of understanding of
the
differences
in managing human resources

in foreign environments.
Chapter 1
30 of 32

Chapter 1ihrm

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chapter 1ihrm

Uploaded by

Copyright:

Available Formats

Chapter 1

Chapter 1 Click on an item to

This definition includes comparative analyses

 Variation in tax laws

The need for a broader perspective

 Broader view of issues

More involvement in employees personal life

mix of PCNs and HCNs varies Click on the book

 More trained locals become available and

 The need to change emphasis in HR

Risk Exposures go to its section.

Click on the book

 Frequently the Human and financial consequences

Broader external influences go to its section.

Click on the book

 Inbound Logistics - involve relationships with suppliers and include all

 Outbound Logistics - include all the activities required to collect, store,

 Marketing and Sales - activities inform buyers about products and

Secondary activities are: go to its section.

Click on the book

 Human Resource management - consists of all activities involved in

 Technological Development - pertains to the equipment, hardware,

 Infrastructure - serves the company's needs and ties its various

 Index of transnationality (ratio of foreign assets)

Some of the changes required

have more to do with a global mindset

in managing human resources

You might also like