IHRM Trends And
Future Challenges
Supreme
Adhikari
Introduction
Trends and developments that present future challenges to IHRM
Current Issues:-
i> International Business Ethics
ii> Mode of Operation
iii> Ownership Issues related to IHRM other than large
multinationals
iv> Safety and Security Issues
Model of Strategic HRM in Multinational Enterprises
International Business Ethics And HRM
Three Main Responses :-
1. Ethical Relativism
2. Ethical Absolutism
3. Ethical Universalism
The Ethical Relativism believes that, there are no universal or
international rights and wrongs, it all depends on a particular culture’s
values and beliefs.
For the ethical relativist, ‘when in Rome, one should do as the Romans
do’
The Ethical Absolutism believes that, an MNC should only follow ‘what
is accepted as ethical in it’s home country, regardless of which country it
operates in.
For the ethical absolute, ‘when in Rome, one should do what one would
do at home, regardless of what the Romans do’
The Ethical Universalism believes that, there are certain fundamental
principles of right and wrong that are universal in nature and accepted by
every culture
It’s something that can be viewed on a general basis. For ex: Doing
something that brings about the greatest good for greatest number
Universal Ethical Principles
Can be seen in the agreements among nations who are signatories to:-
1. The United Nations Declaration of Human Rights
2. The OECD guidelines for Multinationals Enterprises
( adopted by the Organization of Economic Cooperation and
Development)
Staffing
Compensating
Training
Health
Safety
Bribery and Corruption
Most frequent ethical problems encountered by international managers
are due to high level of bribery and corruptions still existing in
organizations
• Bribery involves the payment of agents to do things that are
inconsistent with the purpose of their position or office in order to
gain an unfair advantage
• Bribery can be distinguished from so-called gifts and ‘facilitating’ or
‘grease’ payments
Reasons for Bribery being a Crime:-
• Adds cost to products
• Undermines equity, efficiency and integrity in the public service
• Affects safety and economic well being of general public
• Undercuts public confidence in markets and aid programs
New Global Developments on Criminalization of
Bribery
The United Nations adopted the UN Declaration Against Corruption
and Bribery in International Commercial Transactions in December
1996
Committed UN members to criminalize bribery and deny tax
deductibility for bribes
The declaration was endorsed by 30 OECD members and 4 non-
members with the adoption of the Convention of combating bribery of
Foreign Public officials in International Business Transactions
Roles of HR in Operationalizing Corporate
Ethics Program:-
• Special role in the formulation, communication, monitoring and
enforcing an enterprise’s ethics program
• When firms leave ethical considerations up to the individual
employee
• Pressures of operating in a foreign environment allow internal
inconsistencies that affect total global performance
When recruiting and selecting expatriates, the ability to manage with
integrity could be a job relevant criterion
The pre departure training of expatriates and the orientation program
must include following components:
Formal studies in ethical theory and decision making
Interactive discussion and role playing around dilemmas which
expatriates are likely to encounter
Organizational Factors: Structure,
Strategy and IHRM
External parties are often involved in:-
• Contractual modes
• Joint ventures
• Strategic alliances
More research needs to be done with regard to “arm’s length” operation
Training is an important part towards contractual modes playing a
key role in:-
transferring of technology and systems
inculcation of company culture
acting as a screening process
This results in short-term assignments to deliver the training
Non-Governmental Organizations
(NGO’s)
The influence of NGO’s over the activities of wide range of
industries around the globe is increasing which is of great importance
and support to the activities conducted by the MNE’s
NGOs that are less familiar such as BRAC (formerly known as the
Bangladesh Rural Advancement Committee) which is now a global
organization with over 110 million beneficiaries
External factors : challenges in an uncertain
world : safety, security and counterterrorism
legal compliances and training issues
Unwilling to discuss the protocols, process,
systems and structure in sensitive areas :
cyber-terrorism, political terrorist group, avian
flu and airborne contamination
Corporate risk assessment categories
In-facility emergency and disaster
preparedness : local safety laws and standard
In-facility security : perimeter security, search
protocols into and out of facilities , internal
search protocols and threat to management
Industrial espionage, theft and sabotage :
secure internal communication, open record
protection, employee privacy regulations,
clearly defined physical inspection and search
process
Cyber-terrorism: hardware, software and
human system
Out-of-facility fire and travel risk : travel policies
The evolving field of IHRM
Being slow to develop
2 major reasons
1. Methodological problems involved in the
area of international management and IHRM
2. Many management and HR researchers have
regarded the IHRM field as a marginal
academic area
Evolving role of the HRM function in MNEs
• Complexity in HR role
• challenges continue
• McKinsey survey on forces shaping global
economy
Emerging maket:44%
Developed marekt:41%
Developed market deployed to emerging
market:35%
