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Objectives of the module

Introduction to IHRM IHRM: Concept, Scope and Significance Multi national corporations and IHRM Theories and models


HRM refers to those activities undertaken by an organization to effectively utilize its human resources. Human resource planning Staffing Performance management Training and development Compensation Industrial relations


International Human Resource Management (IHRM) is the process of: acquiring, designating, 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 locations

Other definitions..
. . . the worldwide management of people in the multinational enterprise (Poole, 1990; p1) . . .how MNCs manage their geographically dispersed workforce in order to leverage their HR resources for both local and global competitive advantage (Scullion, 2005; p5) . . . a branch of management studies that investigates the design of and effects of organizational human resource practices in crosscultural contexts (Peltonen, 2006; p523)

Purpose of IHRM
To enable the firm /, the multinational corporations (MNCs), to be a successful globally. Objectives of IHRM: Remaining competitive throughout the world Efficient Locally Responsive Flexible and adaptive Capable to transforming learning across their globally dispersed units

Difference Between domestic and IHRM:

Six factors that differentiate international from domestic HRM. Theses are: 1. A wide range of HR activities 1) The need for a broader perspectives 2) More Involvement in employees personal life. 3) Responsiveness to changes in staffing requirements as international strategy changes. 4) Higher risk exposure 5) More external influences.

In Short
Points HR Activities Involvement in employees Needs Risk Exposure Cultural Environment Domestic HRM Less Less Needs is not so high Minimum Same IHRM More More Needs to cater multiple needs High Different

Senior Management

Change in attitude of Senior management not to be so high

Complexity is not so high as its in the parent country

Change in the attitude of senior management can be high



IHRM Model
TYPES OF ORGANIZATION Domestic organizations employing foreigners Parent companies Subsidiary companies Joint ventures Other type of organizations operating in foreign countries

TYPES OF HUMAN RESOURCES Domestic human resources Parent country nationals Third country nationals Other types of foreign countries

INTERNATIONAL HR ACTIVITIES Procuring Developing Compensating Utilizing Migration Socialization services Security Repatriation Cross-cultural management

Characteristics of international human resource management

Adaptation must be within cultural limits with extra care being taken, for example, when recruiting. HRM specialists can take generalizations and develop them according to international situation they find themselves in. IHRM must be included as part of core programmes in training and development it is no longer an option.

Significance of IHRM in International Business:


Congruence Significance




Effectivenes s

Rapid growth of internalization and global competition has increased the nos. and significances of MNCs resulting in the increased mobility of human resources. Increasing no. of strategic alliances and cross border mergers and acquisitions has increased the strategic implementation of IHRM as Global business.

COMMITMENT: 1. World wide recognition of management of human resources in international business and cross cultural management. 2. Business Networks and Horizontal communication and HR plays a vital role.

The performance of expatriates. (poor performance of expatriate may affect the market share and damage to foreign relations) Growing Importance of Expatriates in International Business.

Global Strategy Implementation. Success or failure of international business based on effectiveness of management of HR

CONGRUENCE: Learning, knowledge acquisitions have been identified as important potential sources of comp. advantages for MNCs. This has also enhanced the role of IHRM to meet the key strategic challenge of objectives. Knowledge management is an important source of comp. advantage for MNCs, where IHRM is the key partner and plays a central role.