differences between hrm and ihrm

7/29/2019 differences between hrm and ihrm

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DOMESTIC VS

INTERNATIONAL HUMAN

RESOURCE

MANAGEMENT


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INTRODUCTION

Despite the fact that the core principlesof SHRM also apply to Global HRM, GlobalHR presents some unique contingencies.


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1.Managing People in Global

Settings This requires Human Resources to address

a broader range of functional areas.

These areas include:

Clarifying Taxation Issues

Coordinating Foreign Currencies

Exchange Rates

Compensation Plans Working Directly With The Families of

Employees Who May Be Accepting Overseas

Assignments.


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2.Involvement In Employees

Personal Life Global Hr Requires More Involvement In

The Employees Personal Life

The Employee Is Usually Assisted With:

Acquiring Housing In The Host Country Selling Or Leasing Domestic Accomodation

Locating Recreational & Cultural Opportunities

For Employees & FamilyArranging & Paying for School for the

Employees Children

Locating & Securing Domestic Help For The

Employee


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Unique HR Contingencies.

3. The Organization Must often SetupDifferent HRM Systems for DifferentGeographic Locations

4. The Organization is often Forced to Dealwith More Complex External

Constituencies, including ForeignGovernments & Political & ReligiousGroups


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Exposure To Risks

Global Assignments often involve AHeightened Exposure to Risks.

These Risks Include:

Health & Safety of Employees & Family

Legal Issues in Host Country

Possible Tourism

Human & Financial Consequences of Mistakes,which may Greatly Exceed The Costs of Thosemade Domestically.


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Threat of Terrorism

The Threat of Terrorism has added tomany of the anxieties employees facewhen considering & undertaking a Global

Assignment.

A Recent Survey found that expatriatesneed & want more support from Head

Quarters than they are receiving regardinghealth & safety concerns;


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Major differences between

domestic HRM and IHRM Business activities e.g. taxation, international relocation,

expatriate remuneration, performance appraisals, cross-cultural training and repatriation

Increased complexities e.g. currency fluctuations, foreign

HR policies and practices, different labor laws Increased involvement in employees personal life e.g.

personal taxation, voter registration, housing, childrenseducation, health, recreation and spouse employment

Complex employee mix cultural, political, religious,ethical, educational and legal background

Increased risks e.g. emergency exits for serious illness,personal security, kidnapping and terrorism


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Myths about globalization

Myth #1: Global = International Myth #2: Global strategy means doing same

thing everywhere Myth #3: Globalizing = stateless corporation,

no national/community ties Myth #4: Globalization requires abandoning

country images and values Myth #5: Globalizing means tackling on

acquisitions or alliances in other countries,without much integration/change

Myth #6: A strategy must involvessales/operations in another country


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Strategies of international, multinational,global & transnational organizations

Internationalcompany transports its businessoutside home country; each of its operations is areplication of the company's domesticexperience; structured geographically; andinvolves subsidiary general managers

Companies offering multiple products often findit challenging to remain organized e.g. need tohave a common information systems foraccounting, financial and management controls,and marketing. Most evolve to becomemultinational companies


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Multinationalcompany grows and defines itsbusiness on a worldwide basis, but continues toallocate its resources among national or regional

areas to maximize the total.


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Globalorganizations treat the entireworld as though it were one large country;may be the entire company or one or

more of its product lines; may operatewith a mixture of two or moreorganizational structure simultaneously.


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Transnational organization - Usespecialized facilities to permit localresponsiveness; more complex

coordination mechanism to provide globalintegration


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Global efficiency and local responsiveness

of different types of firms

Global Transnational

International Multinational

Globalefficiency

HighLow

High

Local responsiveness


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Orientation to international

operations

(1) Australian organization with internationaloperations

All senior and many middle management positions

held by Australians Highly centralized in Australia, large head office

Instruction and advice from Australian head office tosubsidiaries

HR policies and practices are predominantlyAustralian with some modification to satisfy foreignrequirements

Australian corporate culture


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operations

(2) Australian multinational organization

Localization of some management positions but alltop corporate positions held by Australians

Some decentralization to regional or areaheadquarters

Regional headquarters is the main source ofcommunications; instructions from Aust head office to

regional headquarters HR policies and practices are mixed

Mix of Australian and host country culture


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operations

(3) Australian global organization

All management positions are open toeveryone regardless of nationality

Decentralized decision making

Two-way or multiple-way communicationbetween headquarters

HR policies and practices are benchmarked onbest international practices

International corporate culture


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Example from Japanese MNCs

Campbell, N. (1991). How Japanese multinationals work so well. Prism, 4, 61-69.1. Borderless structure and bottom-up decision-making processes

that encourage communication and information flow among allcomponents of the company and extend the network to its key suppliers,distributors, and other business partners.

2. Custodial leadership that emphasizes values and vision and is skillfullyunassertive, while energizing and challenging middle managers withdemanding targets.

3. Human resource management, including socialization, training, andpromotion via a hierarchy of ranks, job rotation, and appraisal systemsthat promote hard work, commitment, and competition among peers.

4. Incremental planning and control that help a company expand littleby little, focusing on new products and the relentless pursuit ofoperating improvements, rather than "grand designs" for competitiveadvantage.

5.An extended family model that encourages and rewards commitment.


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IHRM - a shift in thinkingLaurent (1986)

Explicit recognition by parent org of theexistence of assumptions and values ofhome & host cultures

Explicit recognition by parent orgethnocentrism is neither good/bad, hasstrengths and weaknesses

Explicit recognition of subsidiariespreferences which may be different


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IHRM - a shift in thinkingLaurent (1986)

Willingness to acknowledge culturaldifference discuss and learn

Genuine belief in creative and effectiveways of managing people through cross-cultural training/learning


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Important lessons for global firms

The need to manage change

The need to respect local cultures

The need to understand a corporationsculture

The need to be flexible

The need to learn


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Main challenges in IHRM

High failure rates of expatriation and repatriation Deployment getting the right mix of skills in

the organization regardless of geographicallocation

Knowledge and innovation disseminationmanaging critical knowledge and speed ofinformation flow

Talent identification and development identifycapable people who are able to function

effectively Barriers to women in IHRM International ethics Language (e.g. spoken, written, body)


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Main challenges in IHRM

Different labor laws Different political climate Different stage(s) of technological advancement

Different values and attitudes e.g. time,achievement, risk taking Roles of religion e.g. sacred objects, prayer,

taboos, holidays, etc Educational level attained Social organizations e.g. social institutions,

authority structures, interest groups, statussystems


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Strategies for managing a global

workforce

(1) Implement the aspatial career strategy

Get people from everywhere (geocentric approach)

Expats work in multiple countries during the course of

their career Gain a lot of knowledge about different cultures &

operations

Develops in-depth knowledge

Use previous knowledge for new assignment Extremely high cost

Mainly managers, not technicians


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workforce

(2) Implement the awareness-building assignmentstrategy

Expose a candidate to cultural training exercises

Usually for short term (3 months to one year) Family members usually not required to relocate

Usually used to train candidates for futureassignments

Learn from foreign assignment and bring experienceback to HQ


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workforce

(3) Implement the SWAT team strategy Highly mobile teams for short term

assignments

Deployed throughout the organization todifferent parts of the world

No development agenda, plaintroubleshooting

Transfer technical knowledge to locals as theyfix problems

E.g. technical troubleshooters


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workforce

(4) Implement the virtual solutions strategy

Collection of practices that exploit electroniccommunication

E.g. internet, intranet, videoconferencing,electronic databases, email, electronic expertsystems

Low cost and very fast in terms ofdisseminating knowledge

Used by Xerox and Ford


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differences between hrm and ihrm