A

REPORT

ON

INTERNATIONAL HUMAN RESOURCE

MANAGEMENT

SUBMITTED BY:
Anjali nair
MANISH SINGH
Prateek shrivastava
Devendra Prasad
Rounit roy

INTERNATIONAL ACADEMY OF MANAGEMENT AND

ENTREPRENEURSHIP

2009-2011

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 ACKNOWLEDGEMENT

This successful completion of the seminar is the result of invaluable help and
guidance from Mr. P. S. P. Swamy.

We express our gratitude towards him as his presence has been a source of
inspiration for us & helped us to become more knowledgeable in my topic.

We are deeply indebted to our college International Academy of Management &

Entrepreneurship, Bangalore for providing us the opportunity to complete our research in
this field.

Last but not the least we take this opportunity to thanks all those who have
contributed directly or indirectly through suggestions, thoughts and presence during the
work of seminar.

Group no. 07

Anjali Nair
Manish Singh
Prateek Shrivastava
Rounit Roy
Devendra Prasad

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Introduction:

Human Resource Management

Human Resource Management (HRM) involves all management

decisions and practices that directly affect the people who work for the
organization.
Hence HRM is the strategic and coherent approach to the management of
an organization's most valued assets - the people working there who
individually and collectively contribute to the achievement of the objectives of
the business. In simple words, HRM means employing people, developing their
capacities, utilizing, maintaining and compensating their services in tune with
the job and organizational requirement.

International Human Resource Management

INTERNATIONAL HUMAN RESOURCE MANAGEMENT (IHRM)
is a process of procuring, allocating, and effectively utilizing
human resources in a multinational corporation, while
balancing the integration and differentiation of Human
Resource activities in foreign locations.

Hence it can be defined as “Procurement, allocation,

utilization and motivation of Human Resources in International
business.

OBJECTIVES OF I-HRM

➢ To reduce the risk of international human resource.

It has helped a lot in reducing the risk in the business

by using a proper standard recruitment and selection
process.

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 ➢ To avoid cultural risks.
International HRM has helped a lot in overcoming the
inter-continental culture by making people from different
parts of world work under the same roof.
➢ To manage diversifies human capital.
Due to IHRM human capital is diversified and hence
the risk involved has lessen down to a great extent.

P. Morgan’s Model of IHRM

P. Morgan: Two groups of variables that affects basic HR process

1st – Types of employees.
2nd – Political, economic, legal environment, labor laws and practices
prevailing in different countries.

Human resource activities

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 ➢ Procurement.

➢ Allocation.

➢ Utilization of human resources.

Nations categories where firms expand and operate

➢ Host country

A country in which the MNE seeks to locate or has already

located a facility.

➢ Parent country

The country in which a company’s corporate headquarters

is located.

➢ Third country

The countries other than the one in which the MNC is

headquartered or the one in which it is assigned to work by the
MNC.

Categories of employees in an MNE

➢ Parent Country Nations (PCNs)

PCNs are managers who are citizens of the Country where the MNC is
headquartered. The reasons for using PCNs include

- The desire to provide the company’s more promising managers

with
international experience.
- The need to maintain and facilitate organizational coordination
and control.

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 - The unavailability of managerial talent in the host country.
- The company’s view of the foreign operation as short lived.
- The host country’s multi-racial population.
- The belief that a parent country manager is the best person for
the job.
.
➢ Host Country Nationals (HCNs)

HCNs are local managers hired by MNCs. The reasons for using HCNs

- Familiar with the culture, language.

- Less expensive, know the way things done, rules of local market.
- Hiring them is good public relation.

➢ Third Country Nationals (TCNs)

TCNs are managers who are citizens of countries other than the one
in which
the MNC is headquartered or the one in which it is assigned to work by
the
MNCs. The reason for using TCNs:

- These people have the necessary expertise.

- They were judged to be the best ones for the job..

International Recruitment and Selection

Recruitment

It is defined as searching for and obtaining potential job

candidates in sufficient numbers for and quality so that the
organization can select the most appropriate persons for its job
needs.

Selection

It is defined as the process of gathering information for

the purposes of evaluating and deciding whom should be
employed in particular jobs.

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Criteria for Selecting Staff for International
Assignments

Description

➢ Technical Ability
• Technical and managerial competencies of the person to
perform the required tasks

• Research studies indicate that technical ability are the most

important selection criteria for organizations

• Usually easy to evaluate on the basis of past performance.

➢ Cross-Cultural Suitability

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• Certain individual traits and characteristics can have an
impact on the success or failure of an international assignment
– cultural empathy, adaptability, diplomacy, language ability,
positive attitude, emotional stability, and maturity

• Ability to implement technical and managerial skills and feel

reasonably comfortable in a in a foreign environment.

• Sometimes difficult to determine

➢ Family Requirements
• Spouse may not adjust to a foreign environment

• Adjustment level of spouse depends on several factors, such

as the adjustment of the expatriate and the spouse’s own
opinion of the international assignment.

Country-Cultural Requirements

• “Hardship Postings” (Remoteness of job location, social

upheavals, safety risks, very low standard of living and lack of
recreational opportunities etc.)

• Pressure of living in repressive cultures and countries (e.g.

China, Saudi Arabia and other totalitarian Islamic states in the
Middle East).

Organization-Specific Requirements)

Situational Factors influence staff selection. Examples:

• Organization’s staffing approach may require sending more

expatriates to work in certain regions and locations than
otherwise

• Partner organizations may be involved in the selection of

expatriate staff, for example, on international joint ventures

• Certain specific skills, for example, training, may be used as

a selection criteria.

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 ➢ Language
• Important situational factor. Knowledge of the host country’s
language is considered critical for many senior level positions
along with the ability to communicate effectively.

• Knowledge of the host country’s language helps expatriates

and their families feel more comfortable in the new
environment.

Difference between IHRM and Domestic HRM

· Responsible for a greater number of functions and activities

· Broader knowledge of foreign county employment law

· Closely involved with employees lives

· Cope with more external influences

· Exposure to problems and liabilities

· Management of differential compensation

· Diversity management

· More coordination and travel

· More risk management

Difference between Domestic and International

Managers

· Global mindset

· Communication skills

· Conflict management skills

· Oriented towards a process of continual change

· International experience

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· Political, economic and social sensitivity and knowledge of
many countries.

· Knowledge of culture shock and how to minimize it.

· Leadership and team building skills.

Variables that moderate difference between Domestic

HRM and IHRM:

Main Challenges in IHRM:

➢ Talent identification and development – identify capable

people who are able to function effectively

➢ Language (e.g. spoken, written, body)

➢ Different labor laws

➢ Different political climate

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 ➢ Different stage(s) of technological advancement

➢ Educational level attained.

Human Resource Management: Futuristic Vision

On the basis of the various issues and challenges the following
suggestions will be of much help to the philosophy of HRM with regard to its
futuristic vision:

1. There should be a properly defined recruitment policy in the organization that

should give its focus on professional aspect and merit based selection.

2. In every decision-making process there should be given proper weightage to

the aspect that employees are involved wherever possible. It will ultimately lead
to sense of team spirit, team-work and inter-team collaboration.

3. Opportunity and comprehensive framework should be provided for full

expression of employees' talents and manifest potentialities.

4. Networking skills of the organizations should be developed internally and

externally as well as horizontally and vertically.

5. For performance appraisal of the employee’s emphasis should be given to

360 degree feedback which is based on the review by superiors, peers,
subordinates as well as self-review.

6. 360 degree feedback will further lead to increased focus on customer

services, creating of highly involved workforce, decreased hierarchies, avoiding

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discrimination and biases and identifying performance threshold.

7. More emphasis should be given to Total Quality Management. TQM will cover
all employees at all levels; it will conform to customer's needs and expectations;
it will ensure effective utilization of resources and will lead towards continuous
improvement in all spheres and activities of the organization.

Conclusion

To conclude IHRM should be linked with strategic goals and objectives in

order to improve business performance and develop organizational cultures that
foster innovation and flexibility. All the above futuristic visions coupled with
strategic goals and objectives should be based on 3 H's of Heart, Head and Hand
i.e., we should feel by Heart, think by Head and implement by Hand.

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