Chapter 1 Introduction of IHRM IHRM, Dr. Yang

Chapter Objectives We will establish the scope of the textbook: Define IHRM and key terms Introduce and review expatriate/international assignment management and evolution Outline differences between domestic HRM and IHRM Identify variables that moderate these differences Discover complexity and increasing challenges of current IHRM practices and models Discuss trends and emerging challenges in the global work environment in which IHRM functions and activities are conducted IHRM, Dr. Yang

Three Approaches to IHRM Cross-cultural management Examine human behavior within organizations from an international perspective Comparative HRM and Industrial Relations Seeks to describe, compare and analyze HRM systems and IR in different countries HRM in multinational firms Explore how HRM is practiced in multinational firms IHRM, Dr. Yang

Interrelationships between Approaches to the Field Figure 1-1 IHRM, Dr. Yang

The General Field of HR Major Functions and Activities Human resource planning Staffing Recruitment Selection Placement Performance management Training & development Compensation & benefits Industrial relations IHRM, Dr. Yang

What does IHRM add into the Traditional Framework of HRM? Types of employees Within and cross-cultural workforce diversity Coordination Communication Human resource activities Procurement Allocation Utilization of human resources Nation/country categories where firms expand and operate Host country Parent country Third country IHRM, Dr. Yang

The Interplay of Three Dimensions (Morgan’s Model of IHRM) IHRM, Dr. Yang

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 Global flow of human resources IHRM, Dr. Yang

International Assignments Create Expatriates Figure 1-2 IHRM, Dr. Yang

The Expansion Scope of IHRM The field of IHRM covers all issues related to managing the global workforce and firm outcomes A wide range of HR issues facing MNEs in different parts of their organizations This definition includes comparative analyses of HRM in different countries (Stahl, Björkman & Morris, 2012). IHRM, Dr. Yang

Added Complexity between Domestic HRM and IHRM 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 IHRM, Dr. Yang

Examples of IHR Activities International taxation International relocation & orientation Administrative services for expatriates Host-government relations Language translation services IHRM, Dr. Yang

Expatriation and Relocation Arranging for pre-departure training Providing immigration & travel details Providing housing, shopping, medical care, recreation & schooling information Finalizing compensation details such as: Delivery of salary overseas Determination of overseas allowances Taxation treatment IHRM, Dr. Yang

Variables that Moderate Differences between Domestic HRM and IHRM Figure 1-3 IHRM, Dr. Yang

Culture Matters Culture shock Emic-etic distinction Convergence hypothesis Research tends to focus on macro level variables Divergence hypothesis Research tends to focus on micro level variables The international HR manager must be aware of cultural differences. IHRM, Dr. Yang

The MNE Industry Type Continuum An MNE performs somewhere in this range: Multi-domestic Industries Global Industries Examples: Retailing, distribution, insurance International strategy: Collapses to a series of domestic strategies Airlines, semiconductors, copiers Must integrate activities on a worldwide basis IHRM, Dr. Yang

The world’s top 10 non-financial TNC ranked by TNI 2008a IHRM, Dr. Yang

What does senior management think? Some of the changes required to truly internationalize HR Have more to do with a global mindset than with behaviors. IHRM, Dr. Yang

A Framework of Strategic HRM in MNEs Figure 1-4 IHRM, Dr. Yang

Asymmetric Events Reflects heightened concerns about security, risk, and volatility in the global markets Unmatched in our capabilities & plans Highly leveraged against our particular assets Designed not only to Secure leverage against our assets, but also intended to Work around, offset, and negate what in other contexts are our strengths Difficult to respond to in a discriminate and proportionate manner IHRM, Dr. Yang

The Changing Context of IHRM MNEs fail primarily because of A lack of understanding of the essential differences in managing human resources in foreign environments. These human considerations are as important as the financial and marketing criteria IHRM, Dr. Yang

Summary Defining IHRM and key terms Contrast between Domestic vs. IHRM Variables that moderate the differences Complexity and challenges of IHRM The cultural environment Industry type Extent of MNE reliance on its domestic market Senior mgmt. attitudes to international operations Applying a strategic view of IHRM The changing context IHRM, Dr. Yang

Vocabulary HRM, IHRM PCN, HCN, TCN MNE Expatriate, inpatriate, repatriate, international assignee, Expatriation-Repatriation Equity issues Psychological contract Culture shock Convergence/divergence hypotheses Porter’s value chain model Index of transnationality Global mindset Asymmetric events Environmental dynamics Organizational culture IHRM, Dr. Yang

Discussion Questions What are the main similarities and differences between domestic and international HRM? Define these terms: IHRM, PCN, HCN, and TCN. Discuss two HR activities in which a MNE must engage that would not be required in a domestic environment. Why is a greater degree of involvement in employees’ personal lives inevitable in many IHRM activities? Discuss at least two of the variables that moderate differences between domestic and international HR practices. IBUS 628 Dr. Yang