Introduction and Overview

Chapter 1

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 Chapter Objectives

In this introductory chapter, we will establish the

scope of the textbook. We will
• define key terms in international human
resource management (IHRM)
• outline the differences between domestic and
international human resource management and
the variables that moderate these differences

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 Chapter Objectives (cont.)

• discuss trends and challenges in the global

work environment and the enduring context in
which IHRM functions and activities are
conducted – including the way in which forces
for change affect the operations of the
internationalizing firm and have consequences
for the management of people in the
multinational context.

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

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 Figure 2-1: A model of
IHRM

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 HR activities slide 1

• Human resource planning

• Staffing
– Recruitment
– Selection
– Placement
• Training and development

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 HR activities slide 2

• Compensation
(remuneration)
and benefits
• Industrial
relations
Figure 2-2: Stages of
internationalization

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 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

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Figure 1-3: International
assignments create
expatriates

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 Differences between Domestic and
International HRM
• More HR activities
• The need for a broader perspective
• More involvement in employees’ personal
lives
• Changes in emphasis as the workforce mix of
expatriates and locals varies
• Risk exposure
• Broader external influences

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 Figure 1-4: Variables that
moderate differences between
domestic and international
HRM
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 The ‘top ten’ Multinationals

1. Rio Tinto
(UK/Australia) Electrolux (Sweden)
2. Thomson Corporation 7. Interbrew (Belgium)
(Canada) 8. Anglo American (UK)
3. ABB (Switzerland) 9. AstraZeneca (UK)
4. Nestlé (Switzerland) 10. Philips Electronics (The
5. British American
Tobacco (UK) Netherlands)

UNCTAD Index of
Transnationality

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 Figure 1-5: Factors
influencing the global
work environment

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 Forces for change

• Global competition
• Growth in mergers, acquisitions and
alliances
• Organization restructuring
• Advances in technology and
telecommunication

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 Impacts on Multinational Management

• Need for flexibility

• Local responsiveness
• Knowledge sharing
• Transfer of competence

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 Managerial Responses

• Developing a global ‘mindset’

• More weighting on informal control
mechanisms
• Fostering horizontal communication
• Using cross-border and virtual teams
• Using international assignments

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 Chapter summary

This chapter has established the scope of this

book. We have:
• Defined international HRM and the term ‘expatriate’.
• Discussed the differences between domestic and
international HRM – looking at six factors: more HR
activities, the need for a broader perspective, more
involvement in employees’ personal lives, changes in
emphasis as the workforce mix of expatriates and
locals varies, risk exposure and more external
influences.
(cont.)

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 Chapter summary (cont.)

• Examined what we have called the enduring context of IHRM. The

focus is on the current global work environment, looking at the forces
for change that have prompted managerial responses that have
implications for the way in which people are being managed in
multinationals at the turn of the 21st century. However, we have made
a brief comparison with the situation that confronted a 14th-century
merchant as a way of drawing out some of the constants in
international business.
• This treatment has enabled us to provide an overview of the field of
IHRM and establish how the general environment affects IHRM.
The next chapter examines the organizational context where we
explore how IHRM activities are determined by, and influence,
various internal changes as the firm internationalizes

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