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Chapter Objectives
Define key terms in IHRM Outline the differences between domestic HRM and IHRM Identify the variables that moderate these differences Discuss trends and challenges in the global work environment and the enduring context in which IHRM functions and activities are conducted And understand the way in which forces for change affect the operations of the internationalizing firm and have consequences for the management of people in the multinational context
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Why International Human Resource Management? Increasing globalization, firms and employees in them moving all over the world. Major problems in international operations because of human resource management blunders Hence need to understand human resource management in a global perspective
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Why International Human Resource Management? (contd) 110 senior human resource and industrial relations managers mentioned the most compelling issues in human resource management The role of HR in International Operations Managing a Multicultural Workforce Developing Managerial Talent in a Global Business Environment
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New Environment Increased Environmental Uncertainty More Complexity More Dynamism Less Richness
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human behavior within organizations from an international perspective to describe, compare and analyze HRM systems and IR in different countries how HRM is practiced in multinationals
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Source: Marilyn Loden and Judy B. Rosener, Workforce America: Managing Employee Diversity as a Vital Resource, p. 20. 19
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Performance appraisal Training and development Compensation and benefits Industrial relations
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Strategic Decisions and Their Implications for Human Resource Management (contd)
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A Model of IHRM
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What is an expatriate?
An employee who is working and temporarily residing in a foreign country
Some firms prefer to use the term international assignees Expatriates are PCNs from the parent country operations, TCNs transferred to either HQ or another subsidiary, and HCNs transferred into the parent country
Global flow of HR: more complexity in activities and more involvement in employees' lives
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Differences between Domestic HRM and IHRM More HR activities: taxation, culture orientation, administrative services The need for a broader perspective: cater to multiple needs More involvement in employees personal lives: adjustment, spouses, children Changes in emphasis as the workforce mix of expatriates and locals varies: fairness Risk exposure: expatriate failure, terrorism Broader external influences: government regulations, ways of conduct
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Managerial Responses
Developing a global mindset: More weighting on informal control mechanisms: Fostering horizontal communication: Using cross-border and virtual teams: Using international assignments:
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Ethnocentric: Highly centralized. HQ controls PCNs dominate. Polycentric: Decentralized. Each subsidiary has some degree of decision making autonomy. HCNs manage subsidiaries. Geocentric: Ignores nationality in favor of ability and competence needs in a worldwide integrated business strategy.
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Convergence or Divergence?
Large corporations preference for consistent worldwide systems Smaller companies desire for more professional systems Need to follow local HRM laws Development of unique techniques and practices to suit local cultural and legal requirements
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