HRM IN Global Perspectives

OBJECTIVES
• Introduction to study & practice of IHRM
• Understand concepts, theoretical framework ,
issues of HRM in Global perspectives
• get insights of concept of Expatriation and
Repatriation
• impact of cross culture on HRM
• info about Global workforce mgr
• study trends and challenges in International HRM
+33X P5-JJ
 IHRM can be defined as...

• The process of –

– Acquiring

– Designing, and

– Effectively using the human resources

– In a multinational company or organization, while trying and maintaining

– The balance of integration and differentiation of HR activities in the

foreign location
Defn :
The process of procuring, allocating and efficiently utilizing human resources ( skill,
knowledge, ideas ) in an international business is called International Human
Resource Management.
• integrate HR policies & practices across number of subsidiaries spread across several
countries.
• application of HRM practices to a International setting
• worldwide management of human resources
• enable MNE’s to be successful globally by-
– competitive throughout their presence in world markets
– efficient
– locally responsible to needs, wants, expectations of local society
– flexible and adaptable within least time
– capable of transferring knowledge & learning across globally dispersed unit
• various activities of HRM are-
– HRP
– staffing
– performance mgt
– career mgt
– T&D
– compensation & benefits
– Health & safety
– Labour relations
International HRM differs from purely domestic HRM in a number of ways. Some of these

differences include IHRM being responsible for:

• More HR functions and activities - foreign taxes, work visas, and assistance with international

relocations.

• A broader expertise and perspective- including knowledge about foreign countries, their

employment laws and practices, and cultural differences.

• More involvement in people’s lives, as the firm relocates employees and their families from

country to country.

• Dealing with and managing a much wider mix of employees - Context of international

employees requiring different training, staffing, compensation, and benefits programs.

• More external factors and influences- dealing with issues stemming from multiple

governments, country laws, cultures, currencies, and languages.

• a greater level of risk- (for example, political risk and uncertainties, legal compliance issues, and

early return of employees from foreign assignments).

 – the geographic dispersion,

– multiculturalism,

– different legal and social systems,

– cross-border movement of capital, goods, services, and people that are faced by the international

firm add a need for competency and sensitivity

• The personal and professional attitudes and perspectives of the IHR manager must be

greatly expanded to handle the multiple countries and cultures confronted in the global

arena

• Typical domestic HR managers do not have the global contacts or networks that become

necessary to learn about and to handle the new global responsibilities.

• They don’t typically have any experience with the business and social protocols needed

to interact successfully with foreign colleagues or with the forms of organizational

structure used to pursue international strategies (such as international joint ventures or

cross-border acquisitions).
FEATURES
• Employment of right people at right positions

• requires development of long term HR plan

• development of diversified range of skills to work beyond national boundaries

• determination of compensation for host , home and third country nationals

• creation of centralized reporting relationships for faster information sharing

• introduction of formal & informal methods to integrate global business

• develop well organized evaluation system to assess performance

• understand cultural dimensions of host nations influencing HR operations

• maintain good communication at global level

• perceived value of HR activities varies across different locations

Objectives
1. Create a local appeal without compromising on the global identity
2. Training upon cultures and sensitivities of the host country
3. Generating awareness of cross cultural sensitivities among
managers globally and hiring of staff across geographic
boundaries
4. To avoid cultural risks
5. To avoid regional disparities
6. To reduce the risk of international human resource
7. To manage diversifies human capital
Evolution
• Till 1960s, intl cos had centralised ctrl over human resources and capital

• with inc in biz, subsidiaries were estd with staff from home country( product knowledge,

initiate local mfg, loyalty to home co.)

• estd mfg plants overseas, entered into JVs with home cos on foreign soil

• moving nearer to customers, employing host country national

• In 1990s , sophisticated IHRM, research into policies & practices

• offered as a course in biz mgt courses

• focus on HR, allocation of apt human resource, maintain quality culture, satisfy customers

• identify, recruit, channel competent human resources into biz operations to improve

productivity & functional efficiency

• emergence of intl trade blocks

Reasons for emergence of IHRM:-

1.Global competition- IT, Prodn, Transportation, competitive pressures, well defined HR

policies to retain manpower

2.Mergers, acquisitions and alliances-HR issues, blending of diverse cultures & operations

3.Organizational restructuring- closure, layoff, elimination to attain competency

4.Technological advancements- info technology, human centric, better satisfaction to build

competitive advantage

5.Workforce diversity- racial diversity, gender biased

6.Skill shortages and the rise of the service sector- skilled workers unavailable

7.Rapid change in the external business environment

Significance of IHRM in International business:-

1.Culture- establishment, leadership style, HR practices affected by cultural differences

2.Emphasis on core competency-gaining unique advantage
3.Competition for human resource
4.Stages of international involvement.
5.Technological changes.
6.Need for workforce empowerment- change in mindset, change in skills of workforce
Significance of IHRM by scullion:-

7.Challenge- rapid growth of internationalization, global competition

8.Commitment- worldwide recognition of HR mgt, cross cultural mgt, horizontal comm
9.Cost effective- growing imp of expatriates in intl business
10.
Competence-depends upon effectiveness of HR mgt
11.
Congruence- learning, knowledge mgt are key sources of competitive advantage
6.Scope/functions of IHRM:-

1.Recruitment and selection.

2.Training and development.

3.Performance appraisal.

4.Remuneration.

5.Fulfil international legal compliance.

6.Labour relations.
Nissan’s ethnocentric orientation was quite
apparent during its first years of exporting cars and
trucks in United States. Designed for mid Japanese
winters, the vehicles were difficult to start in many
parts of the US during the cold winter months. In
northern Japan many car owners would put blankets
over their hoods of their cars and they expected
Americans would do the same.
Robert Bosch GmbH, or Bosch, is a German
multinational engineering and electronics company
headquartered in Gerlingen, near Stuttgart, Germany. It
is the world's largest supplier of automotive components
measured by 2011 revenues,

It proudly believes in German engineering and promotes

its products with same approach.
McDonald’s
• McDonald’s strategy to serve
veg burgers in India instead
of non- veg burgers (pork and
beef) to its Indian customers
can be termed as polycentric.
Gerber
When Gerber, a Nestle owned purveyor
of baby foods first started selling their
baby food in Africa, they used the same
packaging as in the USA – with the
cute baby on the label. Later they
found out that in Africa companies
routinely put pictures on the label of
what is inside the package, since most
people cannot read.
 PEPSI Vs.
COKE
In the 1950s, Pepsi reportedly lost its dominant
share of the beverage market in at least one
southeast Asian country after changing its vending
machines and coolers from a deep regal blue to
light ice blue. Light blue is associated with death
in that region, and Pepsi’s subsequent loss was
competitor Coca-Cola’s gain.
 MARKETING EXECELLENCE

Domino’s has a regional approach to serving pizzas which

has made it a much bigger brand than its rivals.

 The company introduced its American Legends line of

specialty pizzas in 2009, featuring 40% more cheese
than the company's regular pizzas, along with a greater
variety of toppings
 In 2010, shortly after the company's 50th anniversary,
Domino's changed its pizza recipe "from the crust up",
making significant changes in the dough, sauce, and
cheese used in their pizzas
 In December 2013, Domino's Pizza, in Israel, unveiled
its first vegan pizza, which uses a soy-based cheese
substitute
 In 2014, Domino's Pizza in Nigeria introduced the new
Jollof Rice Pizza and The Beef Stew Pizza
“Coca-Cola Zero provides real Coca-Cola taste for variety-seeking consumers.
Coca-Cola Zero is sweetened with a blend of low-calorie sweeteners, while Diet
Coke is sweetened with aspartame. As for Coke/Coca-Cola light, in certain
countries, the term ‘diet’ is not used to describe low-calorie foods and beverages. In
these countries, we offer Coke/Coca-Cola light. The sweetener blend used for
Coke/Coca-Cola light is formulated for each country based on consumer
preference.”
MTV has catered to local taste in East Asia in South Korea, China, India and Japan. E.g.
MTV broadcasts on two channels with Chinese music in China and Hindi pop in India.

Using joint ventures with local partners, channels are branded accordingly as MTV
India, MTV Korea, MTV China and MTV Japan and use more local employees with use of
local language.
CENTRIC
 Standardization or Adaption?
• Standardization
• Assumes homogenous markets and in response
offers standardized products and services
using a standardized marketing mix

• Adaption
• Takes into account the inherent diversity in the
global marketplace and adapts the marketing
mix to fit the local culture, preferences, laws
and rules, infrastructure and competition
 REALITY
Companies that operate in foreign markets should have
eclectic abilities to seek integration, sensitivity and learning
on the global scale at the same time, and standardization
and adaption should not be evaluated as approaches that
cannot be coordinated.
Workers in an African port saw the
“Fragile” symbol and presumed it
was broken glass, threw it all in
the sea

 ‘Turn It Loose’ Slogan

 Translated into
Spanish, it
read "Suffer
From
Diarrhea."
 McDonald’s offers beer in Germany,
wine in France, mutton pies in Australia,
Veggie McNuggets in India, Teriyaki
Burger in Japan, McLaks in Norway

 Some if its local favorites around the

world include the McItaly burger in
Italy, Maharaja Mac in India, the
McLobster in Canada, the Ebi Filit-O
in Japan
 HLL identified the
importance of rural
customers and invented
the shampoo sachets
priced at almost a rupee
which were an instant
hit.

Asian Delight (Thailand)

 CONCLUSION
As brands go international—in some cases as we have seen above—brand managers can

forget that simple truth. That is, know your market. Cross cultural marketing is simply about

using common sense and analysing how the different elements of a brand are impacted by

culture and modifying them to best speak to their target audience.

Many international companies have had problems with expanding their brands worldwide

because they have failed to put in the research and effort necessary to understand the

culture. This has lead to several failed brands, to offended consumers, and to the loss of

millions of dollars that comes with having to start all over again.
Limitations to IHRM:-

1. Employee and family adjustment.

2. Selecting the right person for the foreign assignment.

3. Managing international assignment.

4. Management practices.

5. Cultural issues.

6. Difference in industrial relation practices.

7. Language and communication.

8. Resistance to change.
 QUALITIES OF GLOBAL MANAGERS
• Overseas experience

• Deep self awareness

• Sensitivity to cultural diversity

• Humility

• Lifelong curiosity

• Cautious honesty

• Global strategic thinking

• Patiently impatient

• Well spoken

• Good negotiator

• Presence
 Organizational dynamics and IHRM
• Defn : is the process of continously strengthening resources and enhancing employee performances
• how an organization manages and promotes organizational learning , better biz practices and strategic
mgt
• Four fundamental biz activities contributing to organizational dynamics-
– structurally define depts, set measurable goals,  inventory control, producttion control, ,revenue
forecasts, expense mgt.
• Implementation- mgrs must allocate resources and responsibilities to employees basedon skills and
schedules
• Leadership- involves handson exemplary oversight driving innovation, knowledge and performance
• Control- how executives and mgt establish systems that gather data used to determine if goals are met
• At the heart of Organizational dynamics lies HRM
• Hr managers bring org effectiveness with application of behavioural sciences & principles.
• Project mgrs impact co’s dynamics by ensuring quality through careful planning-

- addressing risk, communication & progress

- create open forums to empower vendors, employees, shareholders to share info

- financial monitoring & integrated cost control

 Components of IHRM

• The subject matter of IHRM is covered under three

headings:

– Cross-cultural management

– Comparative HRM

– IHRM
 Components of IHRM
Cross Cultural Management

• Nations differ in their values, cultures and attitudes.

• At the same time, plenty of research has found that since different nations have
different values, there is a difference in how their organizational behaviour is.
• It is, therefore, essential that an International HR manager is aware of such
differences.
• This is because all HR activities like recruitment, appraisals, performance and rewards
are affected by the cultural orientation of an employee.
• As an International HR manager, while taking policy or process decisions, it is essential
that one keeps in mind the cultural aspect.
• “ CHRM explains the behavior of people in organizations around the world and
shows people how to work in organizations with employees & client populations
from many different cultures.
FEATURES OF CROSS CULTURAL MANAGEMENT
• describes Org behaviour within countries & cultures, improves

interaction of coworkers, mgrs, executives, clients, partners, suppliers etc.

• adequate understanding of cultural context is imp

• helps mgrs to cope with employees of foreign cultures

• forms basis for devlpt of intercultural training measures

• assists structured analysis of transferring specific elements of parent

firms HR policy foreign subsidiaries

• helps decide incentive system( individual/ group as per the culture)

• helps mgr to be proactive & anticipate environmental

differencesproblems related to worldwide std HRM practices

Convergence of cultures
• multiple cultures become similar through exposure to traditions, ideals &
languages
• ex. Intl sports event, technology
• Global cos use internet for research, mkting & adapting to customers
needs
• proposes to facilitate, stimulate dialogue betn cultures, fight against
discrimination & violence
• main objective is to promote relationships betn different cultures, spread
its ideas & activities
• no. Of factors encouraged the convergence-
– transport/ communication huge increase in no. Of people visiting foreign
countries
– Globalization of media same tv prgs, newspaper, magazine articles
– similarity in tastes & consumption patterns of young people
– std mkting strategies, std products of MNCs across the world
– consumer willingness to accept new ideas/ try new products
– similar technologies common work experiences & working methods
 Role of IHRM in Cross cultural mgt
• Role of IHRM is considerably enhanced as it has to deal with heterogeneous functions basis for
success of any global orgn.,
• Enhances effectiveness to meet needs & achieve goals of the orgn
– to develop employees to assume more diverse tasks , assignments
– Face challenging situations
– understand cultural variations across nations better
• IHRM has to additionally focus on-
– More involvement in employee’s personal life
– deal with different groups of parent country nationals
– host country & third country nationals for whom HR policies & practices are different
– multicultural environment (cultural differences)
– managing external influences (Govt authorities, labour groups etc..)
– emphasize on mgt training to deal diverse workforce, their orientation, intl environment
– provide guidance on taxation & compensation aspects
Problems of cross cultural issues in organizations
• Understanding different behavior of people than expected
• Avoid getting frustrated and angry
• motivating a cultural diverse team
• achieve the desired level of efficiency
• Lack of proper training on managing a cultural diverse team
Importance of cultural sensitivity to international managers
• Intl mgrs need to know about cultural differences among nations in order to-
– communicate effectively with customers, suppliers, biz associates, partners in
other countries & with foreign employees
– Conduct negotiations , understand the nuances of other parties
– Predict trends in social behaviour likely to affect firm’s foreign operations
– Understand ethical stds, social responsibility in other countries
– Predict how cultural differences will affect consumer reactions to ads &
promotios
– foster relationships between union confederations & employee associations
– Understand local govt policies & its influence on biz promotion
• COMPARATIVE HRM
-explores the extent to which HRM differs between different countries or
even sometimes between different regions of a country.
- There are different labour markets and education systems, different
employment laws and trade unions, and different cultural expectations.
- employment systems differ noticeably between countries and that
managing human resources has to vary from country to country.
-The CHRM field concentrates on-
- differences in HR policies across nations influenced by their culture,
government policy and education system / how is HRM structured in a
particular country.
- Difference in management practices across nations
Importance of Comparative human resource management

• factors affect the ability of nations and their businesses to adapt more
effectively to the economic and social change required has to be
considered.

• explains how variations in comparative human resource management

systems (HRMS) operate to impact firm
– religious and secular holidays need to be honored based on the cultures

– official language of the workplace & whether the language is accepted by co-
workers

– focus on the functions, policies, and practices of HRM in different countries.

– Different countries have different national cultures that have different HRM
implications.
challenges –
adaptation of HR practices to the new set of cultures -
creation of a manner of operation that is both comfortable
to the organization, and appropriate for those cultures.

– greater numbers of areas,

– the number and variety of cultures represented in their

workforce also changes.

– practical issues can arise that may make doing business

increasingly more difficult.
DIFFERENCE BETWEEN INTERNATIONAL HRM AND COMPARATIVE HRM 

• HRM issues, functions, policies and practices that result from the strategic

activities of MNES. (Scullion, 1995).

• deals principally with issues and problems associated with the globalization of

capitalism.

• more complex to manage, in terms of the diversity of national contexts and types

of workers.

• The emphasis is on the MNC’s ability to attract, develop and deploy talented

employees in a multinational setting and to get them to work effectively despite

differences in culture, language and locations.

• tends to mitigate the impact of national culture and national employment

practice against corporate culture and practices.

• Comparative HRM -explains the patterns and variations encountered in cross-

national HRM

• According to comparative HRM literature, different national business systems

arise from differences in specific historical, cultural and institutional heritage in

certain countries.

• occur due to decisive historical events

• process of industrialization/ due to the legacy of pre-modern forms of social

organization.
 Diversity:
• based on individual acceptance and respect.
•understanding that individuals are unique and different.

• Cultural diversity

• acknowledges the existence of broad cultural groups within a

culture.

• Cultural diversity has been part of India's history, and through it, India culture is

constantly developing.
 Elements of
Diversity
Age Income

Gender Education

Ethnicity Marital Status

Race
Religious Beliefs
Physical Ability Geographic Location
Sexual Orientation
Parental Status
Physical
Personality Type
Characteristic
Ways to incorporate diversity:
• incorporate diversity into their workplaces without causing major changes to

the way their companies operate-

• Recruiting from diverse talent pools to make the company open to

employees from various backgrounds.

• infused into advertising practices to ensure products and services are

targeted to all consumers through print, online, television or radio.

• Managing Diversity is defined has the “planning and implementing

organizational systems and practices to manage people so that the potential

advantages of diversity are maximized while its potential disadvantages are

minimized.
Key to growth:
• Diversity management is the key to growth in today’s fiercely
competitive global marketplace.
• No longer can America’s corporations hide behind their lack of
cultural intelligence.
• Organizations that seek global market relevancy must
embrace diversity – in how they think, act and innovate
• how an organization treats its people authentically down to
the roots of its business model.
• In today’s new workplace, diversity management is a time-
sensitive business imperative.
 Diversity Initiatives that Help an Organization Keep a Competitive Human
Resources Advantage

• Improves corporate culture Responsive service delivery and enhanced staff skills
•Improves employee morale

• Easier recruitment of employees

• Enables the organization to move into emerging markets

•Increases creativity

•Access to overseas markets.

• Reduction in skill shortages.

• Decreased interpersonal conflict among employees

•Improves client relations

•Increases productivity

• Improves the organization`s bottom line

•Maximizes brand identity

 Benefits of Diverse workplace:
• Customer service improves when staff understand and can communicate

skillfully with customers from a range of backgrounds.

• The community is also more likely to identify with and relate to companies that

reflect its level of diversity

• Workplace diversity where staff are encouraged to work in their areas of

strength and capability.

• Valuing diversity where staff potential is recognized and developed.

• Productive diversity is valuing different experience, perspectives, skills and the

cross-transfer and integration of these into the company and local economy.
STRATEGIES FOR MANAGING DIVERSITY IN WORKFORCE
The 5-fold strategy for managing workforce diversity are as follows-
1. Individual strategies- based on situations, ego state, cultural background of other persons
a. Understanding the cultural background of others- understand behavioural patterns
b. Believing that all cultures are good – climate and economic conditions
c. Perceive from others perspective- convincing others or being convinced
d. Approach of not winning over other’s culture- adjust and not win over or trade off
e. Clear communication- language and apt words
2. Group strategies-
a. Knowledge sharing- expatriates from same nationality meet, share info about conflicts, harmony
b. Advising and cautioning- info about conflict areas & possible solns
c. Cultural exchange through socialization programmes
3. Organizational strategies-
a. Recruitment and selection strategies- different approaches have their own pros & cons
b. Organizational policies and practices-cultures, salaries, benefits, work, T &D, employee relations, Free & fair implementation
c. Cultural training- manage diversity
d. Formal socialization programmes
e. Structuring work team – project/ specific task
f. Communication teams info sharing, consultation, negotiations, bargaining, nertworking, working tpgether
g. Special benefits to women and old people
4. National strategy-
a. Legislative approach towards equal employment opportunities- laws enacted by Govt to employ minority, other communities
b. Efforts of cultural associations/societies- Indo-U.S, Indo german cultural societies spread cultural awareness
c. Efforts of the diplomatic missions-embassies, high commissions initiate efforts to spread culture
5. International strategies –
a. Economic unions and regional integration
b. Efforts of International trade orgns and financial institutions
culture shock-
• Being cut off from the familiar cultural cues and known patterns

• Living and working over an extended period of time in a situation that is new,

ambiguous, and complex

• Being rejected by/and/or rejecting members of the new culture

• Feeling surprise, anxiety, even disgust and indignation after becoming

aware of cultural differences

• Brings your own lifestyle, value, culture, and thoughts into question

• Being continually expected to function at maximum level, skill, and speed

where societal rules are unknown

 STAGES OF CULTURE SHOCK
• Honeymoon stage(Arrival)
• VIP feeling
• Everything is new, interesting, untested, and
exciting
• Feel energetic and enthusiastic
• A large wish to see new places and things and meet
a large number of new people
•Culture shock/ Feeling unhappy
• Reality sets in about timeframe, location
• You become aware of cultural differences
• Confusion, anxiety, homesickness, feeling
overwhelmed, and even angry
• Find the behavior of people unusual and “weird”
• Begin to criticize host culture, mock, or
even show animosity
• Actually begin to dislike
the host culture, blame
it for your problems
• Recovery (adjusting)
• Feeling safety again
• Developing routines and knowing how to
react in different circumstances
• Making friends
• One begins to accept the culture ways with a
positive attitude
•Adaptation(Completion)
• Enthusiasm!
• Enjoyment of daily life
• Sometimes preference given to new culture over
own culture (i.e. food, dress, etc…)
• Adopt certain behavioral traits and language
phrases
• The feeling of never wanting to leave
• Forging strong relationships
• Accept culture with positive attitude
• Gain problem-solving skills
overcoming culture shock:
• Keep busy and active
• Establish strong friendships with people from the host culture
• Think about the positive things of the culture
• Realize that everybody who goes abroad experiences culture shock
• Be an avid learner
• Set short-term goals

• Find someone from your country that has been there longer. Use that person to gain
perspective

• Avoid foreigners who spend their time complaining about the host culture.
• Avoid criticizing the host culture yourself

• Work at maintaining a healthy sense of humor. Laugh at yourself!

• When talking about experiences, focus on your feelings rather than the causes