Chapter3r

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International Human Resource Management
Managing people in a multinational context
Chapter Objectives
We learn about:
• Global perspective on IHRM with external
partners
• Cross-border alliances
• Equity-based alliances (M&As, IJVs)
• Globalizing SMEs
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Figure
3-1
Equity and non-equity modes of foreign operation
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Figure
3-2
The formation processes of M&As and HR challenges
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Typical cross-border M&A problems
1. Within first year of merger, up to 20% of
executives may be lost. Over a longer time
frame, this tends to increase even further.
2. Personnel issues are often neglected.
3. A high number of M&As fail or do not
produce the intended results.
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Figure
3-4
Impact of the human integration and task acquisition
on acquisition outcome
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Figure
3-5
HR activities in the phases of a cross-border M&A
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Table
3-1
Post-acquisition trends in HRM practices
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Figure
3-6
Formation of an international equity joint venture
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The main reasons for engaging in an IJV
1.
2.
3.
4.
5.
6.
7.
To gain knowledge and to transfer that knowledge
Host government insistence
Increased economies of scale
To gain local knowledge
To obtain vital raw materials
To spread the risks (e.g. share financial risks)
To improve competitive advantage in the face of
increasing global competition
8. Provide a cost effective and efficient response
forced by the globalization of markets
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Figure
3-7
IJV development stages and HR implications
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Table
3-2
SME definition
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Top 10 barriers to international markets by SMEs
1. Shortage of working capital to finance exports.
2. Identifying foreign business opportunities.
3. Limited information to locate/analyze markets.
4. Inability to contact potential overseas customers.
5. Obtaining reliable foreign representation.
6. Lack of managerial time to deal with internationalization.
7. Inadequate quantity of and/or untrained personnel for
internationalization.
8. Difficulty in managing competitor’s prices.
9. Lack of home government assistance/incentives.
10. Excessive transportation/insurance costs.
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Figure
3-8
SME employer image and internationalization
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Figure
3-9
Learning in small organizations
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