eHR01 Global HRM Prof R K Singh AIMA CME

AIMA-CME 2 GHRM-Introduction & Overview GHRM :Introduction HRM refers to the activities an organization carries out to use its human resource effectively. It is a complex task in a purely domestic firm, but- HR functions are far more complex in an Global business where staffing, management development, performance evaluation, and compensation activities are complicated by profound differences between countries- in labour markets, language, culture, legal systems, economic systems and the like.

AIMA-CME 3 GHRM : Introduction and Overview GHRM : Introduction and Overview Approaches to GHRM: 1. Cross Cultural Management Approach 2. Comparative HR system-Country- wise 3. HRM in MNCs. Model of GHRM : Three Dimensions 1. HR Activities (PAU) 2. Type of Employees (HCNs, PCNs, and TCNs) 3. The Countries ( Host, Home, Other)

AIMA-CME 4 GHRM-Introduction & Overview GHRM-Introduction & Overview Defining GHRM : “GHRM is the interplay among the three dimensions- HR Activities, Types of Employees and Countries of Operation.”

AIMA-CME 5 GHRM-Introduction & Overview Defining GHRM : “GHRM is the procurement, allocation, utilization and motivation of human resources in the Global arena. GHRM is critical to the strategy and success of global operations.”

AIMA-CME 6 GHRM- Introduction & Overview HRM vs GHRM : 1. More HR activities 2. The need for a broader perspective 3. More involvement in employees’ personal lives 4. Changes in emphasis as the workforce mix of expatriates and locals varies 5. Risk exposure and 6. More external influences.

AIMA-CME 7 GHRM :The Organizational Context GHRM-Various Approaches: 1.Ethnocentric 2.Polycentric 3.Regiocentric 4. Geocentric

AIMA-CME 8 GHRM :The Organizational Context Ethnocentric Approach: A policy in which all key management positions are filled by parent-country nationals. A policy in which all key management positions are filled by parent-country nationals. Strategic decision making is centralized to the parent country headquarter. Strategic decision making is centralized to the parent country headquarter. A firm must pursue an ethnocentric staffing policy if the host country lacks qualified and experienced individuals to fill senior management positions, especially when they operate in less developed countries A firm must pursue an ethnocentric staffing policy if the host country lacks qualified and experienced individuals to fill senior management positions, especially when they operate in less developed countries

AIMA-CME 9 GHRM :The Organizational Context Polycentric Approach: This policy requires that host-country nationals be considered to manage subsidiaries while parent-country nationals occupy key positions at corporate headquarters. This policy requires that host-country nationals be considered to manage subsidiaries while parent-country nationals occupy key positions at corporate headquarters. This policy may be less expensive to implement, reducing the costs of value creation while operating overseas. This policy may be less expensive to implement, reducing the costs of value creation while operating overseas. Strategic Decision Making for the subsidiary operation is decentralized. Strategic Decision Making for the subsidiary operation is decentralized.

AIMA-CME 10 GHRM :The Organizational Context Geocentric Approach: 1. This policy seeks the best people for key jobs throughout the organization, regardless of nationality. 2. First, it enables the firm to make the best use of its human resources. 3. Second, a geocentric policy enables the firm to build a cadre of Global executives who feel at home working in a number of cultures. …..Cont.

AIMA-CME 11 GHRM :The Organizational Context Geocentric Approach: 4.Global composition of the management team, which results from geocentric staffing, tends to reduce the cultural myopia and enhances local responsiveness. 5.The employees would be satisfied and happy if their company follows this type of policy.