INTERNATIONAL HUMAN RESOURCE MANAGEMENT

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INTERNATIONAL HUMAN

RESOURCE MANAGEMENT

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CONTENTS………

• Introduction to IHRM

• Challenges to IHRM

• Equal employee opportunity

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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}

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What is IHRM?

• International HRM (IHRM) is the

process of:

– procuring,

– allocating, and

– effectively utilizing human resources – in a multinational corporation, while – balancing the integration and

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OBJECTIVES of IHRM

• To reduce the risk of international human resource

• To aviod cultural risks

• To aviod regional disparities

• To manage diversifies human capital

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Human resource activities

– Procurement

– Allocation

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– Host country

– Parent country

– Third country

Nation/country

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Categories of employees in an MNE

• Parent-country nationals (PCNs)

– Employees who were

born and live in a parent country.

• A parent (or home) country: the country in which a

company’s corporate headquarters is located.

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• Host-country nationals (HCNs)

– Employees born and raised in a host country.

• Host country: a country in which the MNE seeks to

locate or has already located a facility. • Third-country nationals (TCNs) – Employees born in a

Categories of employees in an

MNE

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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

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International Assignments Create

Expatriates

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1.

1. Inability of spouse to adjust

Inability of spouse to adjust

2.

2. Manager’s inability to adjust

Manager’s inability to adjust

3.

4.

4. Manager’s personal or emotional

Manager’s personal or emotional

maturity

5.

5. Inability to cope with larger overseas

Inability to cope with larger overseas

responsibility

6.

6. Lack of technical competence

Lack of technical competence

7.

7. Difficulties with new environment

Difficulties with new environment

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Why IHRM

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Factors that Influence the Global Work

Environment

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• _{Global competition}

_{Global competition}

_:

• _{Growth in mergers, acquisitions}

_{Growth in mergers, acquisitions}

and alliances

:

• _{Organization restructuring}

_{Organization restructuring}

_:

• _{Advances in technology and}

_{Advances in technology and}

telecommunication

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• _{Need for flexibility}

_{Need for flexibility}

_:

• _{Local responsiveness}

_{Local responsiveness}

_:

• _{Knowledge sharing}

_{Knowledge sharing}

_:

• _{Transfer of competence}

_{Transfer of competence}

_:

Impacts on Multinational

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• _{Developing a global “mindset”}

_{Developing a global “mindset”}

• _{More weighting on informal control}

_{More weighting on informal control}

mechanisms

• _{Fostering horizontal}

_{Fostering horizontal}

communication

• _{Using cross-border and virtual}

_{Using cross-border and virtual}

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 _{More HR activities: taxation, culture}_{More HR activities: taxation, culture}

orientation, administrative services

 _{The need for a broader perspective: cater to}_{The need for a broader perspective: cater to}

multiple needs

 _{More involvement in employees’ personal}_{More involvement in employees’ personal}

lives: adjustment, spouses, children

 _{Changes in emphasis as the workforce mix of}_{Changes in emphasis as the workforce mix of}

expatriates and locals varies: fairness

 _{Risk exposure: expatriate failure, terrorism}_{Risk exposure: expatriate failure, terrorism}  _{Broader external influences: government}_{Broader external influences: government}

regulations, ways of conduct

Differences between Domestic HRM and

IHRM

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Differences between Domestic HRM

and IHRM: variables

• _{Complexity involved in operating in}_{Complexity involved in operating in}

different countries, varied nationalities of

employees

• The different Cultural Environment_{The different Cultural Environment}

• The industry or industries with which the _{The industry or industries with which the}

MNC is involved

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Variables that Moderate Differences

between Domestic HR and IHRM

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Qualities of Global Managers

• Understand the worldwide business

• Learn about many cultures

• Work with many types of people • Create cultural synergy

• Adapt to living in many cultures • Use cross-cultural skills daily

• Treat foreign colleagues as equals • Use foreign assignments as career

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Main challenges in IHRM

• 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

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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

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EQUAL EMPLOYEE OPPORTUNITY

• Equal Employment Opportunities (EEO)

means eliminating barriers to ensure that all employees

are considered for the employment of their choice and have the chance to perform to their maximum

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• EEO practices include:

• fairness at work,

• hiring based on merit and

• promotion based on talent.

It concerns all aspects of

employment including recruitment,

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OBJECTIVES

• To promote recognition and acceptance of everyone's right to equality of opportunity

• TO eliminate, as far as possible,

discrimination against people by

prohibiting discrimination on the basis of various attributes

• TO eliminate, as far as possible, sexual harassment

• TO provide redress for people who have been discriminated against or sexually harassed.

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EQUAL EMPLOYEE OPPORTUNITY

Discrimination on the basis

of:-• Disability • Race

• Age

• Minority

• Marital status

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Diversity in workforce

Differences among people in age, gender, race, ethnicity, religion, sexual

orientation, socioeconomic background, capabilities/disabilities and in the

thought process.

management system which incorporates the differences found in a multicultural

workforce in a manner which results in the highest level of productivity for both the organization and the individual.

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Diversity is the mixture of people in business, with their variety of backgrounds, experiences, styles, cultures, skills and competencies.

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• As individuals, we are all diverse

• As organizations and work groups,

some are more diverse than others • Important to understand your mix

(customer’s, employees &

stakeholders) now both current state and desired state

• People are both similar and different

among a variety of dimensions

• Need to understand the impact of

culture

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NETWORK ORGANISATIONS

• International Division Structure

• Global Product Division

• Global Area Division

• Global Functional Division Structure

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International Division Structure

Structural arrangement that handles all

international operations out of a division created for this purpose

• Assures international focus receives top management attention

• Unified approach to international operations • Often adopted by firms still in

developmental states of international business operations

• Separates domestic from international managers (not good)

• May find it difficult to think and act

strategically, or to allocate resources on a global basis

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Global Product Division

Structural arrangement in which domestic divisions are given worldwide responsibility for product groups

• Global product divisions operate as profit centers • Helps manage product, technology, customer

diversity

• Ability to cater to local needs

• Marketing, production and finance coordinated on product-by-product global basis

• Duplication of facilities and staff personnel within divisions

• Division manager may pursue currently attractive geographic prospects and neglect others with long-term potential

• Division managers may spend too much time tapping local rather than international markets

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Global Area Division

• Structure under which global operations

organized on geographic basis

– International operations put on same level as domestic

– Global division mangers responsible for all business operations in designated geographic area

– Often used by firms in mature businesses with narrow product lines

– Firm is able to reduce cost per unit and price competitively by manufacturing in a region – Difficult to reconcile a product emphasis with

geographic orientation

– New R&D efforts often ignored because divisions are selling in mature market

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Global Functional Division

Structure

Structure that organizes worldwide operations

primarily based on function and secondarily on product

– Approach not used except by extractive companies such as oil and mining

– Favored only by firms needing tight, centralized

coordination and control of integrated production processes and firms involved in transporting products and raw

materials between geographic areas

– Emphasizes functional expertise, centralized control, relatively lean managerial staff

– Coordination of manufacturing and marketing often difficult – Managing multiple product lines can be very challenging

because of separation of production and marketing into different deparments.

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Global Functional Division

Structure

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Multinational Matrix Structure

Structure is a combination of global

product, area, or functional

arrangements

– Allows organization to create specific

type of design that best meets its needs – As matrix design’s complexity increases,

coordinating personnel and getting

everyone to work toward common goals often become difficult

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Transnational Network Structures

Multinational structural arrangement

combining elements of function, product, geographic design, while relying on

network arrangement to link worldwide subsidiaries

– At center of transnational network structures are nodes, units charged with coordinating product, functional, and geographic

information

– Different product line units and geographic area units have different structures

depending on what is best for their particular operation

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INTERNATIONAL HUMAN RESOURCE MANAGEMENT