Chapter 1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
1 of 32
Chapter 1
INTRODUCTION
Chapter 1
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INTRODUCTION
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Vocabulary
Objectives
Scope of book
Defining IHRM
Domestic vs. international
Variables that moderate the differences
The cultural environment
Industry type
Extent of MNE reliance on HC market
Senior mgmt. attitudes to international ops.
Applying a strategic view of IHRM
The changing context
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
2 of 32
Chapter 1
START
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HRM, IHRM
PCN, HCN, TCN
MNE
expatriate = international assignee, inpatriate
repatriation
equity issues
psychological contract
culture shock
convergence/divergence hypotheses
Porter’s value chain model
index of transnationality
global mindset
asymmetric events
environmental dynamics
organizational culture
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
3 of 32
Chapter 1
Vocabulary
Objectives
1. Define IHRM and key terms
2. Introduce & review expatriate assignment mgmt.
3. Outline differences between domestic & IHRM
4. Detail a model that captures these differences
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
4 of 32
Chapter 1
5. Discover complexity & increasing challenges to
existing IHRM practices and models
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
5 of 32
Chapter 1
Scope of book
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
6 of 32
Chapter 1
Figure 1.1
Inter-relationships between approaches to the field
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
7 of 32
Chapter 1
Defining international HRM
HRM activities
1. Human resource planning
2. Staffing: recruitment, selection, placement
3. Performance management
4. Training & development
5. Compensation & benefits
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
8 of 32
Chapter 1
6. Industrial relations
Morgan’s “3-D” definition of IHRM
1. The HR activities of
procurement, allocation & utilization
2. The countries where IHRM occurs:
»
»
»
Host-country where subsidiary may be located
Parent-country where firm is headquartered
Other-countries that may be
source of labor, finance & other inputs
»
»
»
HCNs (host country nationals)
PCNs (parent ..
..
)
TCNs (host
..
..
)
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
9 of 32
Chapter 1
3. The employees of an international firm:
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
10 of 32
Chapter 1
Figure 1.2
International assignments create expatriates
Stahl-Björkman-Morris def. of IHRM
The field of IHRM covers
 All issues related to firm outcomes
 A wide range of HR issues facing MNEs in
different parts of their organizations
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
11 of 32
Chapter 1
This definition includes comparative analyses
of HRM in different countries.
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
12 of 32
Chapter 1
Domestic vs. international
IHRM is more complex than
domestic HRM
IHRM has …
1. more HR activities
2. a need for a broader perspective
3. more involvement in employees’ personal lives
4. changes of emphasis as
the mix of expatriates & locals varies
6. broader external influences
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
13 of 32
Chapter 1
5. more risk exposure
IHRM has international HR activities
■ International taxation
■ International relocation & orientation
■ Administrative services for expatriates
■ Host-government relations
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
14 of 32
Chapter 1
■ Language translation services
International relocation involves:
■ Arranging for pre-departure training
■ Providing immigration & travel details
■ Providing housing, shopping, medical care,
recreation & schooling information
■ Finalizing compensation details such as:
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
15 of 32
Chapter 1
 Delivery of salary overseas
 Determination of overseas allowances
 Taxation treatment
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
16 of 32
Chapter 1
Variables that moderate the differences
Four more moderators
in addition to IHRM complexity
1. The cultural environment
2. The industry(ies) with which the MNE is
primarily involved
3. The extent to which the MNE relies on
its HC domestic market
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
17 of 32
Chapter 1
4. The attitudes of senior management
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
18 of 32
Chapter 1
Figure 1.3
A model of all 5 variables that moderate the differences
between domestic and international HRM
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
19 of 32
Chapter 1
The cultural environment
Culture matters
■ Culture shock
■ Emic ≠ etic
■ Convergence hypothesis research
tends to focus on macro level
■ Divergence hypothesis research
tends to focus on micro level
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
20 of 32
Chapter 1
■ The international HR manager must be
aware of cultural differences
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
21 of 32
Chapter 1
Industry type
The MNE industry type continuum
An MNE performs somewhere in this range:
Multidomestic Industries
International strategy
Collapses to a
series of domestic strategies.
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
airlines, semiconductors, copiers
Must integrate activities on a
worldwide basis.
ISBN-10: 1408032090
© Cengage Learning
22 of 32
Chapter 1
Examples
retailing, distribution, insurance
Global Industries
1.
Parent org. recognizes that its HRM reflects
some assumptions & values of own home culture.
2.
Parent org. recognizes that its own peculiar ways are
neither universally better nor worse than others –
just different & likely to exhibit strengths & weaknesses,
particularly abroad.
3.
Parent org. recognizes that its foreign subsidiaries may prefer
other ways to manage people – ways that are neither
intrinsically better nor worse, but possibly more effective locally.
4.
Headquarters is willing to acknowledge cultural differences &
take steps to make them discussable & therefore usable.
5.
All parties build belief that cross-cultural learning invites
more creative & effective ways of managing people.
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
23 of 32
Chapter 1
Laurent’s steps for true IHRM:
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
24 of 32
Chapter 1
Extent of MNE reliance on HC market
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
25 of 32
1
Chapter 2
Table 1.1
The world’s top 10 non-financial TNC, ranked by TNI, 2008a
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
26 of 32
Chapter 1
Senior management attitudes
What does senior mgmt. think?
Some of the changes required
to truly internationalize HR
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
27 of 32
Chapter 1
have more to do with a global mindset
than with behaviors.
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
28 of 32
Chapter 1
Applying a strategic view of IHRM
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
29 of 32
Chapter 1
Figure 1.4
A framework of strategic HRM in MNEs
Asymmetric events tend to be
■ Unmatched in our capabilities & plans
■ Highly leveraged against our particular assets
■ Designed to
1. Secure leverage against our assets
2. Work around,
Offset, &
negate what in other contexts are our strengths
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
30 of 32
Chapter 1
3. Be difficult to respond to in a
discriminate & proportionate manner
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
31 of 32
Chapter 1
The changing context of IHRM
An MNE case study result
MNEs fail primarily because of
a lack of understanding of
the
differences
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
32 of 32
Chapter 1
in managing human resources
in foreign environments.