International Human Resource Management

Managing people in a multinational context

Chapter Objectives
We learn about:
• Global perspective on IHRM with external
partners
• Cross-border alliances
• Equity-based alliances (M&As, IJVs)
• Globalizing SMEs

IHRM Chapter 3 2
Figure
3-1
Equity and non-equity modes of foreign operation

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Figure
3-2
The formation processes of M&As and HR challenges

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Typical cross-border M&A problems
1. Within first year of merger, up to 20% of
executives may be lost. Over a longer time
frame, this tends to increase even further.
2. Personnel issues are often neglected.
3. A high number of M&As fail or do not
produce the intended results.

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Figure Impact of the human integration and task acquisition
3-4 on acquisition outcome

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Figure
3-5
HR activities in the phases of a cross-border M&A

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Table Post-acquisition trends in HRM practices
3-1

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Figure
3-6
Formation of an international equity joint venture

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The main reasons for engaging in an IJV
1. To gain knowledge and to transfer that knowledge
2. Host government insistence
3. Increased economies of scale
4. To gain local knowledge
5. To obtain vital raw materials
6. To spread the risks (e.g. share financial risks)
7. To improve competitive advantage in the face of
increasing global competition
8. Provide a cost effective and efficient response
forced by the globalization of markets
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Figure
3-7
IJV development stages and HR implications

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Table SME definition
3-2

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Top 10 barriers to international markets by SMEs
1. Shortage of working capital to finance exports.
2. Identifying foreign business opportunities.
3. Limited information to locate/analyze markets.
4. Inability to contact potential overseas customers.
5. Obtaining reliable foreign representation.
6. Lack of managerial time to deal with internationalization.
7. Inadequate quantity of and/or untrained personnel for
internationalization.
8. Difficulty in managing competitor’s prices.
9. Lack of home government assistance/incentives.
10. Excessive transportation/insurance costs.

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Figure
3-8
SME employer image and internationalization

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Figure
3-9
Learning in small organizations

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