International HRM
Messiah College
January 22, 2014
attribution
Attribution in this presentation: all figures come
from Peter J. Dowling, a.o., International Human
Resource Management, South-Western Cencage
Learning, 2008, ISBN 978-1-84480-542-6, unless
mentioned otherwise.
Objectives
• Define key IHRM terms
• Review expatriate management
evolution
• Outline differences between domestic
and international HRM
• Discover the increasing complexity
and potential challenges of current
IHRM
A definition of IHRM
“We define the field of IHRM broadly to cover all
issues related to the management of people in
an international context. Hence our definition
of IHRM covers a wide range of human resource
issues facing MNC’s in different parts of their
organizations. Additionally, we include
comparative analyses of HRM in different
countries.”
Stahl and Bjorkman, page 5, Chapter 1.
expatriate
management
Terms
NAFTA
UNCTAD
HRM
IHRM
HCN
PCN
TCN
expatriate
inpatriate
MNE
culture shock
emi-etic distinction
Inter-relationships between
approaches to a field
Defining HRM
An organization’s HRM activities include:
1. Human resource planning
2. Staffing (recruitment, selection, outplacement)
3. Performance management
4. Training and development
5. Compensation (remuneration) and benefits
6. Industrial relations
Human resource planning
Recruitment & Selection
Performance management
Renumeration
Training & Development
Differences between domestic HRM
and IHRM
The complexity of IHRM can be attributed to six
factors:
1. More HR activities
2. The need for a broader perspective
3. Move involvement in employees’ personal lives
4. Changes in emphasis as the workforce mix of
expatriates and locals varies
5. Risk exposure
6. Broader external influences
from SWOT to Strategy
Implementation of Strategy
• corporate governance
• organizational structure
• coordination and control
• leadership
• entrepreneurship
• innovation
• change and sustainability
approach and focus
• Suitability, does the strategy address the key
issues?
• Acceptability, will the strategy achieve an
acceptable return, reasonable level
of risks?
• Feasibility, can the strategy be pursued within
the resources, capabilities and
competences of the organization?
opportunities international strategy
Internationalization causes
differences in costs/risks
• Exporting  high cost and low risk
• Licensing  low costs and high risk
• Strategic alliances  shared costs and shared
risks, but having problems of integration and
therefore control
• Acquisitions  rapid, high cost and high risk
• The establishment of a new subsidiary  also
high cost and high risk, greater opportunity for
management control and above average
returns
determinants
of national
advantage
Determinants of national advantage
• Factor conditions  labor, land, natural
resources, financial capital, infrastructure
• Demand conditions  demand for basic and
advanced goods and services in the home market
• Related and supported industries  important
networks of suppliers, buyers, services
• Firm’s strategy, structure and rivalry  some
places in different countries are the location of
choice for particular industries, products,
services
viability of the firm
framework for thinking flexibly about
culture
• Unitary and unique organizational culture
• Organizations as meetings points of ‘fields’ of
culture
• Local subcultures
• Ambiguous cultural configurations
• Integration  consistency and consensus
• Differentiation  variation and sub-culture
conflict
• Fragmentation  ambiguity, inconsistency and
fluctuation
knowledge strategies
four knowledge management
strategies
• Leveraging  communicate and transfer existing
knowledge within the organization
• Expanding  create and build on existing
knowledge
• Appropriate strategy  take new knowledge
from external individuals and
organizations and transfer this into
your organization
• Probing strategy  create new, propriatory
knowledge from your internal
organizational resources
A model of the variables that moderate differences
between domestic and international HRM
Variables that moderate differences
between domestic and international HRM
1. The complexity involved in operating in
different countries and employing different
national categories of employees
2. The cultural environment
3. The industry (or industries) with which the
MNE is primarily involved
4. The extent of reliance of the MNE on its
home-country domestic market
5. The attitudes of senior management
Strategic HRM in multinational
enterprises
truly international HRM require following steps
1. Recognize that one’s own HRM reflects home culture
assumptions and values.
2. Recognize that one’s own peculiar ways are neither
universally better nor worse than others - just different and
likely to exhibit strengths and weaknesses, particularly
abroad.
3. Recognize that organization’s foreign subsidiaries may prefer
other ways to manage people – ways that are neither
intrinsically better nor worse, but possibly more effective
locally.
4. Headquarters willingness to acknowledge cultural differences
and steps to make them discussable and therefore usable.
5. Build shared genuine belief that cross-cultural learning will
result in more creative and effective ways of managing
people.
Discussion Questions
1. What are the main similarities and differences
between domestic and international HRM?
2. Define these terms: IHRM, PCN, HCN, and TCN.
3. Discuss two HR activities in which a MNE must
engage that would not be required in a domestic
environment.
4. Why is a greater degree of involvement in
employees’ personal lives inevitable in many
IHRM activities?
5. Discuss at least two of the variables that
moderate differences between domestic and
international HR practices
The end