Special thanks to

Dr. Harish Shukla

What is IHRM
International HRM is the process of
procuring, allocating and utilizing
human resource in an MNC or a
global firm.
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
Why International Human Resource
Management? (contd)
The role of HR in International Operations
Managing a Multicultural Workforce
Developing Managerial Talent in a Global
Business Environment
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
Diversity as
an
Organization
al and HR
Challenge in
MNE
Forces for Change
Global competition:
Growth in mergers, acquisitions and alliances:
Organization restructuring:
Advances in technology and telecommunication:
Major approaches to managing and staffing subsidiaries
Ethnocentric: company uses the approach developed in home
country and the values, attitudes, practices and priorities of
headquarters determine the HR policies and practices.

Polycentric : company considers the needs of the local subsidiary
when formulating human resource policies.

Regiocentric : the company considers the needs of an entire region
when developing the human resource policies and practices.

Global or geocentric: The companys priority is the optimal use of all
resources including human resources, local or regional
considerations are not considered important for the success of
corporate strategy.
Impacts on Multinational Management
Need for flexibility:
Local responsiveness:
Knowledge sharing:
Transfer of competence:
The Expatriate Problem
High Expatriate Failure Rates
Average cost per failure to the parent firm can
be as high as three times the expatriates
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
Reasons for Expatriate Failure
1. Inability of spouse to adjust
2. Managers inability to adjust
3. Other family problems
4. Managers personal or emotional maturity
5. Inability to cope with larger overseas
responsibility
6. Lack of technical competence
7. Difficulties with new environment
Major differences between domestic HRM
and IHRM
Business activities e.g. taxation, international relocation,
expatriate remuneration, performance appraisals, cross-
cultural training and repatriation

Increased complexities e.g. currency fluctuations, foreign
HR policies and practices, different labor laws

Increased involvement in employees personal life e.g.
personal taxation, voter registration, housing, childrens
education, health, recreation and spouse employment

Complex employee mix cultural, political, religious,
ethical, educational and legal background

Increased risks e.g. emergency exits for serious illness,
personal security, kidnapping and terrorism
Example from Japanese MNCs

1. Borderless structure and bottom-up decision-making processes that encourage
communication and information flow among all components of the company
and extend the network to its key suppliers, distributors, and other business
partners.

2. Custodial leadership that emphasizes values and vision and is skillfully
unassertive, while energizing and challenging middle managers with
demanding targets.

3. Human resource management, including socialization, training, and
promotion via a hierarchy of ranks, job rotation, and appraisal systems that
promote hard work, commitment, and competition among peers.

4. Incremental planning and control that help a company expand little by little,
focusing on new products and the relentless pursuit of operating
improvements, rather than "grand designs" for competitive advantage.

5. An extended family model that encourages and rewards commitment.
IHRM - a shift in thinking
Laurent (1986)
Explicit recognition by parent org of the
existence of assumptions and values of
home & host cultures
Explicit recognition by parent org
ethnocentrism is neither good/bad, has
strengths and weaknesses
Explicit recognition of subsidiaries
preferences which may be different
IHRM - a shift in thinking
Laurent (1986)
Willingness to acknowledge cultural
difference discuss and learn
Genuine belief in creative and
effective ways of managing people
through cross-cultural
training/learning
High failure rates of expatriation and repatriation

Deployment getting the right mix of skills in the
organization regardless of geographical location

Knowledge and innovation dissemination managing
critical knowledge and speed of information flow

Talent identification and development identify capable
people who are able to function effectively

Barriers to women in IHRM
International ethics
Language (e.g. spoken, written, body)

Main challenges in IHRM
Different labor laws
Different political climate
Different stage(s) of technological advancement
Different values and attitudes e.g. time, achievement,
risk taking
Roles of religion e.g. sacred objects, prayer, taboos,
holidays, etc
Educational level attained
Social organizations e.g. social institutions, authority
structures, interest groups, status systems