INTERNATIONAL HUMAN RESOURCE MANAGEMENT

International HRM (IHRM) is the process of procuring, allocating, and effectively utilizing human resources in a multinational corporation, while balancing the integration and differentiation of HR activities in foreign locations. An understanding of IHRM is of growing importance for a number of reasons, the most significant of which are: Recent years have seen a rapid increase in global activity and global competition. As the MNCs increase in number and influence, so the role of international HRM in those companies grows in significance. The effective management of human resources internationally is increasingly being recognized as a major determinant of success or failure in international business. Research evidence shows that (i) shortage of international managers is becoming an increasing problem for international firms, (ii) to a large extent the successful implementation of global strategies depends on the existence of an adequate supply of internationally experienced managers, (iii) business failures in the international arena may often be linked to poor management of human resources, and (iv) expatriate failures continue to be a significant problem for many international firms. In this connection, Schuler et al. (1993) argue that: 1. HRM at any level is important to strategy implementation; 2. Major strategic components of MNCs have a significant bearing on international management issues, functions, policies and practices; 3. Many of these characteristics of strategic international human resource management can help or hinder the MNCs in their attempt to achieve their goals and objectives; and 4. There are various factors that make the relationship between MNCs and strategic IHRM complex, thereby making the study of IHRM important. Objectives of IHRM are as follows: 1. 2. 3. 4. To reduce the risk of international human resource To avoid cultural risks To avoid regional disparities To manage diversifies human capital

P.Morgans Model of IHRM

Factors that Influence the Global Work Environment:

Main challenges in IHRM are as follows: 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) 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

NETWORK ORGANISATIONS

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

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

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 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.

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 designs complexity increases, coordinating personnel and getting everyone to work toward common goals often become difficult Too many groups to their own way. IHRM involves three types of employees which are as follows: 1. Home country employees: Employees belonging to home country of firm where corporate head quarter is situated. 2. Host country employees: Employees belonging to nation in which subsidiary is situated. 3. Third country employees: These are those employees who are not from home country but are employed at subsidiary or corporate head quarters. As an HR manager the scope for me is really high. Now- a-days with increasing FDI and foreign companies entering Indian market, the demand for international human resource is increasing. There is a major requirement of the managers who can have a great control over cross cultural discrepancies. The cross cultural awareness supports employees moving to overseas subsidiaries. It takes care of cultural orientation, cultural assimilation, language training, sensitivity training and field experience. With the above mentioned quality the career opportunity for me is increasing with deep knowledge and clear understanding, I can enhance my horizon and have a good career graph. As an HR manager I can inculcate all the qualities in me and compete internationally. I can have a competitive edge over other HR managers. I would make myself globally competent after having an in-depth knowledge of IHRM.

HRM ASSIGNMENT ON INTERNATIONAL HUMAN RESOURCE MANAGEMENT

Submitted to: Dr. R. Sujatha

Submitted by: Tanvi Gupta A-20