Dr.G.

VIJAYAKRISHNA,

INTERNATIONAL HRM
MBA,MHRM,PG D(IR&PM),
Ph.D
Associate Professor
INTRODUCTION
International HRM is by introducing the international strategic context that,
MNCs operate within which various models that have been proposed to explain,
how the international HR function is organised and its role. We then consider
how HR knowledge is transferred focusing specifically on the role of
international HR networks and expatriates.

ASSOCIATE PROFESSOR DR.G.VIJAYAKRISHNA

DEFINITION
The set of distinct activities, functions and processes that are directed at attracting ,
developing and maintaining an MNC Human Resources. It is thus aggregate the
various HRM Systems used to manage the people in the MNCs, both at home and
overseas (Taylor,beachelr&Naiper-1996)
IHRM can be defined HRM activities which are taking place in the International
Context i.e.; Recruitment,PMS, T&D and other aspects of HRM.

ASSOCIATE PROFESSOR DR.G.VIJAYAKRISHNA

IMPORTANCE
IHRM showing concern to identify and understand , how MNCs
manage their geographically dispersed work force for both local and
international competitive advantage
Its bridging the gap between differences among nationalities
IHRM Function in MNCs play crucial role in developing systems
and process that promote internal consistency in how employees are
treated
IHRM helps in integration and co-ordination among the work force
It helps to built a proper organisational Structure.

ASSOCIATE PROFESSOR DR.G.VIJAYAKRISHNA

INTERNATIONAL STRATEGIC
CONTEXT
International business strategists have attempted to generate
theory that makes it easier to interpret the complex world of
international business. One of the best known is Prahalad and
Doz’s (1987) Integration–Responsiveness (IR) Grid. They argue
that MNCs are faced with pressures to integrate and coordinate
their activities on the one hand and on the other to respond to local
(national) variations. The pressures driving integration and
responsiveness faced by MNCs are summarised in Table

ASSOCIATE PROFESSOR DR.G.VIJAYAKRISHNA

OCCASIONS OF MAKING OF I-R
(INTEGRATED-RESPONSIVENESS)
GRID
Strategic co-ordination need is high where
Operational integration need is high where
Local responsiveness is high where

ASSOCIATE PROFESSOR DR.G.VIJAYAKRISHNA

STRATEGIC CO-ORDINATION NEED IS HIGH WHERE;

Multinational customers are a large proportion of the customer base. For

example, it is important to coordinate pricing, service and product support
worldwide as the multinational customer has the ability to compare prices on
this basis.
Global competition is likely. If companies operate in multiple markets global
competition is highly likely. As such it is important to monitor and collect
information on competitors 'activities in the different countries in readiness
for an appropriate and timely strategic response.
Investment in one or more parts of the business is high. For example, high-
tech manufacturing or R&D are common high fixed costs. To maximise the
benefits and yield the best return on capital investments global coordination is
necessary.
ASSOCIATE PROFESSOR DR.G.VIJAYAKRISHNA
OPERATIONAL INTEGRATION NEED IS
HIGH WHERE;
Technological intensity is high. Technology intensive businesses
often require a small number of manufacturing sites that enable
quality and costs to be centrally controlled while serving wide
geographically dispersed markets.
 Cost reduction is a priority. This can be achieved through locating
in low cost economies or building plants designed to maximise
economies of scale.
 The product is universal and requires minimal adaptation to local
markets. This is typical in consumer electronics.
 Manufacturing needs to be located close to essential raw materials
or energy such as in the petrochemicals business.
ASSOCIATE PROFESSOR DR.G.VIJAYAKRISHNA
 LOCAL RESPONSIVENESS IS
HIGH WHERE;
Customer demands vary across nations or regions.
Distribution channels need to be tailored to the characteristics of
the country or region. For example, marketing of products may
need to be nationally specific.
There are other similar products or where the product needs to
be adapted to local needs.
Local competitors rather than multinational competitors define
the market competition.
The host country places restrictions on the operating subsidiary .

ASSOCIATE PROFESSOR DR.G.VIJAYAKRISHNA

IHRM APPROACHES (EPRG
APPROACH)
The ethnocentric mindset reflects a focus on home country values
and ways of operating. As a consequence key positions in
subsidiaries are filled by parent country nationals (i.e.
expatriates).This gives the parent a high degree of direct control
over the subsidiaries’ operations.

The polycentric mindset focuses on host country values and ways of

operating. As a result key positions in the subsidiary are more likely
to be filled by local employees and the parent company is less
interested in controlling and homogenising the organisational
culture.
ASSOCIATE PROFESSOR DR.G.VIJAYAKRISHNA
CONTD…
The regiocentric mindset focuses on regional values and ways of operating. As
a result the organisation is usually structured along regional geographical
lines (e.g. Europe, America,and Asia Pacific Rim) and employees move
around within these regions. This approach allows some degree of integration,
but recognises regional diversity.

The geocentric mindset focuses on global values and ways of operating. These
global values are not nationally specific but instead transcend national
boundaries and become almost a cultural. This approach looks to use the best
people for the job selecting from all over the global organisation.

ASSOCIATE PROFESSOR DR.G.VIJAYAKRISHNA

STRATEGIC AND CULTURAL
REQUIREMENTS (ADLER,CHADLER)
Phase I: Domestic: Here the focus is on the home market. The products/services are unique, they
have not been available before, therefore the price is high relative to cost and competition is
minimal.
Phase II: International: Here competition increases and international markets become more
important for profit. There is a shift in focus from product development (R&D) to manufacturing
and plants are set up locally and divisional structures emerge.
Phase III: Multinational: Here the product/service reaches maturity, competition is intense and
the price has fallen. Coordination of resources becomes a vital tool in the reduction of costs. The
role of culture becomes less important as the issue of reducing costs takes central position.
Phase IV: Global. The three prior phases were based on hierarchical structures. This phase is
based on the assumption that the organisation will need to operate in all three phases
simultaneously and therefore build ‘complex networks of joint ventures and wholly owned
Organizatons.

ASSOCIATE PROFESSOR DR.G.VIJAYAKRISHNA

IHRM OBJECTIVES(VON
GLINOW,1990)
Timing: refers to whether the organisation takes a short-term or long-term
perspective in its business and international HRM strategy
Cost: refers to whether the organisation needs to focus on lowering costs or can
focus on longer-term development issues in its overseas operations and the
career paths of its expatriate managers.
Integration: relates to the use of expatriate managers in implementing informal
control systems.
Differentiation: refers to the development of a network of home and host
country managers to facilitate communication and control between the parent
and subsidiary.

ASSOCIATE PROFESSOR DR.G.VIJAYAKRISHNA

CONTD…
These four objectives change over four OLC(Organizational Life Cycle) stages leading to a
different pattern of international HRM.
Stage 1: As the firm starts out most of the international HRM is conducted on an ad hoc basis
and international assignments focus on technical work skills with little emphasis on cultural
training.
Stage 2:he number and extent of commitment in overseas operation increases. Short-term
savings remain a priority and the need of integration is minimal. However, for successive growth
of the overseas markets greater knowledge of the local environment is needed. Thus expatriate
training in cultural sensitivity and languages becomes more important
Stage 3. As the business becomes well established, the organisation can take a longer-term
perspective and integration becomes key, particularly for controlling costs. Home country
expatriates provide control along with the transfer of home HRM systems and organisational
culture.
Stage 4. The demands for both integration and differentiation are evident. In response
organisations need to invest in training and development to enhance the flexibility of the
organisation to meet these demands. ASSOCIATE PROFESSOR DR.G.VIJAYAKRISHNA
KNOWLEDGE AND THE TRANSFER OF THE HR
POLICY AND PRACTICE IN INTERNATIONAL
ORGANIZATIONS
Global policy Development
Global HR Policy development and implementation
Best practices creation and sharing
Socialization of the HR community
( PMS, Succession planning, talent spotting , Expatriate careers
etc)
 Ex- Patriate MANAGER, Parent- Subsidiary,
 Top-down Vs Collaboration

ASSOCIATE PROFESSOR DR.G.VIJAYAKRISHNA

NO BOOK IS REQUIRED UNLESS YOUR
OWN BOOK IS OPENED- (
(SWAMI VIVEKANANDA)

ASSOCIATE PROFESSOR DR.G.VIJAYAKRISHNA