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IHRM
Welingkar Hybrid Program
Chapter Objectives
By the end of this chapter, you will understand:
4. Summary
1. What is International HRM?
About IHRM
The field has evolved from its fragmented beginnings and organizational
behaviour scholarships.
The process of
Acquiring
Designing, and
Effectively using the human resources
In a multinational company or organization, while trying and maintaining
The balance of integration and differentiation of HR activities in the foreign
location
Evolution of IHRM
For over 30 years the question has been asked: To what extent and in what
ways are MNCs and their managers becoming truly international?
For over 20 years, much of the literature on IHRM has focused on the issue of
expatriation.
Expatriates are sent out around the world like corporate missionaries to
provide technical and managerial expertise, to control operations, and to
further develop these managers as well as their companies.
Problems of expatriation adjustment have also been the key concern. Now
issues of repatriation have taken the foreground.
Indeed, the traditional career paths pursued by expatriates have evolved over
time. In its place, the concept of boundary-less careers has emerged.
Evolution of IHRM
Different models of HRM have been identied : the American model that
tends to be more transactional and the European model which is more social
and more constrained by the institutional context.
Could Japanese management practices, for example quality circles, work in the
U.S.A.? Why did practices developed by Deming (an American) work better in
Japan than in the U.S.? Was it because of some unique aspects of Japanese
culture?
Peters and Waterman (1984) entered the debate by arguing that good
management principles and practices are universal, and as such, these could
also be found in excellent U.S. companies.
4. Summary
2. Three components of IHRM
Components of IHRM
Cross-cultural management
Comparative HRM
IHRM
Components of IHRM
Cross Cultural Management
We all believe in some or the other sort of stereotypes even though it may
not be true. Beliefs such as these are common: All Asians are good at Math, All
Irish people drink alcohol, All Americans are domineering, All Italians are good
lovers! However, the same may not be true. We might meet a non alcoholic
Irishman or even a passive American!
At the same time, plenty of research has found that since different nations
have different values, there is a difference in how their organizational
behaviour is.
We know that they may have different labour markets and education systems,
different employment laws and trade unions, and the different cultural
expectations that we have already noted.
This area is also concerned about ensuring how a company manages its people
in a cost effective way across countries while being sensitive to individual
country differences as well.
IHRM has the same dimensions as HRM in a national context, but it operates
on a larger scale, more complex scenarios and coordination.
IHRM has its own issues and pressures, those of more personal insight into the
employees life and family situations and a greater need for diversity
management.
Quick Check
Answers:
1. B 2. C
Chapter Structure
1. What is International HRM?
4. Summary
3. The current IHRM Scenario
Current IHRM Scenario
MNEs today
Changes being wrought in the HR service supply chain as the need for several
intermediary service providers is being reduced, and as web-based HR
provision increases
As knowledge and ideas about best practice flow from both the centre to the
operations and vice versa, it is not uncommon for HR professionals at all levels
of the firm to feel that their ideas are being overridden by those of other
nationalities or business systems.
The debate now is not just about the difference between standardised and
localised HR practices, but between optimised, standardised or localised
practices, with there being considerable debate about the nature and
meaning of standardised versus optimised HR processes.
Global HRM is not simply about covering these staff around the world. It
concerns managing IHRM activities through the application of global rule-
sets.
The Changing IHRM Scenario
International Shared Services
By the end of the 1980s most multinational organisations had decided that
splitting up the HR function on a country-by-country basis when the rest of the
organisation was increasingly aligned behind global lines of business was not
helping the function to achieve its objectives.
The advent of shared service thinking in the late 1990s provided the
opportunity to transform HR structures.
In its own right it will undoubtedly have a considerable impact on the role
and activities of IHR departments, centrally and locally.
The ability to get HRM information to and from, and support on to, line
managers and even employees - desks without a formal HRM
intervention opens up new and exciting possibilities allowing HR to focus
on its capability and business development roles.
The Changing IHRM Scenario
Outsourcing, Insourcing & Offshoring
The most common targets for outsourcing are those HR activities that can
most easily be ring-fenced, and include: payroll, training, recruitment.
Offshoring is not outsourcing per se, but rather concerns the completion of
the same task in a different location where the costs are significantly cheaper.
Pyndt and Pedersen (2006) found that the direct benefits of offshoring are
easy to understand and are derived from savings in labour costs, foreign
suppliers import of products or services and repatriation of profits.
Answers:
1. C 2. A
Chapter Structure
1. What is International HRM?
4. Summary
4. Chapter Summary
International Human Resource Management (IHRM) is a branch of
management studies that investigates the design and effects of organizational
human resource practices in cross-cultural contexts.
Once we have understood HRM we can easily understand IHRM. HRM means
Human Resource Management which in simple words means managing the
people within an organization. Any or many all decisions made by the
management and the practices followed which directly affects the employee
of a company is known as Human Resource Management.
Comparative HRM focuses on the way that people work and explores the
differences between nations in the way that they manage this process.
The added value of the HR function in an international firm lies in its ability to
manage the delicate balance between overall co-ordinated systems and
sensitivity to local needs, including cultural differences, in a way that aligns
with both business needs and senior management philosophy.