1. An Introduction to International Human Resource Management

2. Why International Human Resource Management?
Increasing globalization, firms and employees in them moving all over the world.
Major problems in international operations because of human resource management blunders
Hence need to understand human resource management in a global perspective
Morgan defines IHRM as an interplay of 3 dimensions :HR activities,types of employees & countries of operations.

3. Why International Human Resource Management? (cont’d)
The role of HR in International Operations
Managing a Multicultural Workforce
Developing Managerial Talent in a Global Business Environment
Reasearch done shows 3 global pressures: 1. Deployment, 2. Knowledge & innovation dissemination 3. Identification & development of talent on a global basis.

4. Globalization, Uncertainty, Complexity and IHRM
Globalization and New Technologies
New Environment – Increased Environmental Uncertainty More Complexity More Dynamism Less Richness
Environment is more complex, dynamic & with less knowledge, awareness & experience regarding the new environment with increased uncertainity.

5. Globalization and importance of IHRM
Uncertainty, Complexity, Hypercompetition
Need to Refocus on Persons, Roles and Integration for Global Performance HR
Capabilities People Processes Persons in Roles

6. 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 multinationals
Approaches based on human behaviour & HRM systems and practices.

7. Interrelationships between Approaches of IHRM

8. Diversity as an Organizational and HR Challenge in MNE
DUERR POINTS OUT:International problems are created by people and also solved by them.
Source: Marilyn Loden and Judy B. Rosener, Workforce America: Managing Employee Diversity as a Vital Resource, p. 20.

9. A Definition of Human Resource Management
Human Resource Management (HRM) involves all management decisions and practices that directly affect the people who work for the organization.
“Human Resources” the people who work for the organization.

10. A Definition of Human Resource Management (cont’d)
“Human” represents the dimension of HRM which relates to the soft aspects such as commitment of employees through participation and the most important assets being the employees.
“Resource” represents the hard aspects such as the strategy link of HRM and the importance of efficient utilization of employees.
“Management” represents the role of HRM as part of management that implies that it’s not only an administrative function that carries out the formulated policies but also a managerial function that contributes to strategy formulation.

11. The General Field of HR Major Functions and Activities
Human resource planning
Staffing
Recruitment
Selection
Placement
Performance appraisal
Training and development
Compensation and benefits
Industrial relations

12. Human Resource Management Functions
Planning for Organizations, Jobs, and People
The Strategic Management of Human Resources
Human Resource Planning
Acquiring Human Resources
Selection
Recruitment
Integration

13. Human Resource Management Functions (cont’d)
Building and Motivating Performance
HR Development
Performance Appraisal
Compensation Systems

14. Human Resource Management Functions (cont’d)
Maintaining Human Resources
Benefits
Safety & Health
Collective Bargaining
Organizational Exit
Employment transitions
Multinational Human Resource Management

15. Strategic Decisions and Their Implications for Human Resource Management

16. Strategic Decisions and Their Implications for Human Resource Management (cont’d)
Other complex issues are foreign competiton,nurturing HR,Formulation & Implementation of global strategy,Top mgt. Priority for I.Business and international expansion for small/medium firms.

17. 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

18. A Model of IHRM

19. Some Terms Defined
Host Country National (HCN): Belongs to the Country where the subsidiary is located
Parent Country National (PCN): Belongs to the Country where the firm has its headquarters
Third Country Nationals (TCN): Belongs to any other country and is employed by the firm

20. 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 HR: more complexity in activities and more involvement in employees' lives

21. International Assignments Create Expatriates:

22. The Expatriate Problem
High Expatriate Failure Rates
Average cost per failure to the parent firm can be as high as three times the expatriate’s annual domestic salary plus the cost of relocation
Between 16% & 40% of all American employees sent abroad to developed nations, and almost 70% sent to less developed nations return home early

23. Reasons for Expatriate Failure
Inability of spouse to adjust
Manager’s inability to adjust
Other family problems
Manager’s personal or emotional maturity
Inability to cope with larger overseas responsibility
Lack of technical competence
Difficulties with new environment

24. Differences between Domestic HRM and IHRM
More HR activities: taxation, culture orientation, administrative services
The need for a broader perspective: cater to multiple needs
More involvement in employees’ personal lives: adjustment, spouses, children
Changes in emphasis as the workforce mix of expatriates and locals varies: fairness
Risk exposure: expatriate failure, terrorism
Broader external influences: government regulations, ways of conduct

25. Differences between Domestic HRM and IHRM: variables
Complexity involved in operating in different countries, varied nationalities of employees
The different Cultural Environment
The industry or industries with which the MNC is involved
Attitudes of Senior Management
Extent of reliance of MNC on home country domestic market

26. Variables that Moderate Differences between Domestic HR and IHRM

27. Forces for Change Global competition:
Growth in mergers, acquisitions and alliances:
Organization restructuring:
Advances in technology and telecommunication:

28. Impacts on Multinational Management
Need for flexibility:
Local responsiveness:
Knowledge sharing:
Transfer of competence:

29. Managerial Responses
Developing a global “mindset”:
More weighting on informal control mechanisms:
Fostering horizontal communication:
Using cross-border and virtual teams:
Using international assignments:

30. Factors that Influence the Global Work Environment

31. Approaches To International Human Resource Management
Ethnocentric: Highly centralized. HQ controls PCNs dominate.
Polycentric: Decentralized. Each subsidiary has some degree of decision making autonomy. HCNs manage subsidiaries.
Geocentric: Ignores nationality in favor of ability and competence needs in a worldwide integrated business strategy.

32. Convergence or Divergence?
Large corporations’ preference for consistent worldwide systems
Smaller companies’ desire for more professional systems
Need to follow local HRM laws
Development of unique techniques and practices to suit local cultural and legal requirements

33. Choosing an Approach to IHRM
Corporate International Strategy
Political and Legal Concerns
Level of Development in Foreign Locations
Technology and the Nature of the Product
Organizational Life Cycle
Cultural Differences

34. Thank You