International HRMByProf. Amaresh C Nayak

Myths about GlobalisationMyth #1: Global = InternationalMyth #2: Global strategy means doing same thing everywhereMyth #3: Globalizing = stateless corporation, no national/community tiesMyth #4: Globalisation requires abandoning country images and valuesMyth #5: Globalizing means tackling on acquisitions or alliances in other countries, without much integration/changeMyth #6: A strategy must involves sales/operations in another country

International, Multinational, Global & Transnational OrganizationsInternational company transports its business outside home country; each of its operations is a replication of the company's domestic experience; structured geographically; and involves subsidiary general managers Companies offering multiple products often find it challenging to remain organized e.g. need to have a common information systems for accounting, financial and management controls, and marketing. Most evolve to become multinational companies

International, Multinational, Global & Transnational OrganizationsMultinational company grows and defines its business on a worldwide basis, but continues to allocate its resources among national or regional areas to maximize the total.

International, Multinational, Global & Transnational OrganizationsGlobal organizations treat the entire world as though it were one large country; may be the entire company or one or more of its product lines; may operate with a mixture of two or more organizational structure simultaneously.

International, Multinational, Global & Transnational OrganizationsTransnational organization - Use specialized facilities to permit local responsiveness; more complex coordination mechanism to provide global integration

Global Efficiency and Local Responsiveness of Firms

Important Lessons for Global FirmsThe need to manage changeThe need to respect local culturesThe need to understand a corporations cultureThe need to be flexibleThe need to learn

International HRMInternational human resource management is concerned with the human resource problems of multi-national firms in foreign subsidiaries with the unfolding of HR issues that are associated with the various stages of the internationalization process Boxall 1995

International HRMInternational HRM (IHRM) is the process of:Procuring, Allocating, andEffectively utilizing human resources In a multinational corporation, whileBalancing the integration and differentiation of HR activities in foreign locations

International HRMComplexity Operation of the multinational enterprise units across diverse national contextsThe employment of workers with different national characteristics

Objectives of IHRMTo reduce the risk of international human resourceTo avoid cultural risks To avoid regional disparitiesTo manage diversifies human capital

P.Morgans Model of IHRM

What is an expatriate?An employee who is working and temporarily residing in a foreign countrySome firms prefer to use the term international assigneesExpatriates are PCNs from the parent country operations, TCNs transferred to either HQ or another subsidiary, and HCNs transferred into the parent countryGlobal flow of HR: more complexity in activities and more involvement in employees' lives

International Assignments Create Expatriates

Differences between Domestic HRM and IHRMMore HR activities: taxation, culture orientation, administrative servicesThe need for a broader perspective: cater to multiple needsMore involvement in employees personal lives: adjustment, spouses, childrenChanges in emphasis as the workforce mix of expatriates and locals varies: fairnessRisk exposure: expatriate failure, terrorismBroader external influences: government regulations, ways of conduct

Differences between Domestic HRM and IHRMComplexity involved in operating in different countries, varied nationalities of employeesThe different Cultural EnvironmentThe industry or industries with which the MNC is involvedAttitudes of Senior ManagementExtent of reliance of MNC on home country domestic market

Variables that Moderate Differences between Domestic HR and IHRM

Major Differences Between Domestic HRM and IHRMBusiness activities e.g. taxation, international relocation, expatriate remuneration, performance appraisals, cross-cultural training and repatriationIncreased complexities e.g. currency fluctuations, foreign HR policies and practices, different labor lawsIncreased involvement in employees personal life e.g. personal taxation, voter registration, housing, childrens education, health, recreation and spouse employmentComplex employee mix cultural, political, religious, ethical, educational and legal backgroundIncreased risks e.g. emergency exits for serious illness, personal security, kidnapping and terrorism

Main challenges in IHRMHigh failure rates of expatriation and repatriationDeployment getting the right mix of skills in the organization regardless of geographical locationKnowledge and innovation dissemination managing critical knowledge and speed of information flowTalent identification and development identify capable people who are able to function effectivelyBarriers to women in IHRMInternational ethicsLanguage (e.g. spoken, written, body)

Main challenges in IHRMDifferent labor lawsDifferent political climateDifferent stage(s) of technological advancementDifferent values and attitudes e.g. time, achievement, risk takingRoles of religion e.g. sacred objects, prayer, taboos, holidays, etcEducational level attainedSocial organizations e.g. social institutions, authority structures, interest groups, status systems

Qualities of Global ManagersUnderstand the worldwide businessLearn about many cultures Work with many types of peopleCreate cultural synergyAdapt to living in many culturesUse cross-cultural skills dailyTreat foreign colleagues as equalsUse foreign assignments as career development

Diversity in workforceDifferences among people in age, gender, race, ethnicity, religion, sexual orientation, socioeconomic background, capabilities/disabilities and in the thought process.Management system which incorporates the differences found in a multicultural workforce in a manner which results in the highest level of productivity for both the organization and the individual.

Diversity in workforceDiversity is the mixture of people in business, with their variety of backgrounds, experiences, styles, cultures, skills and competencies

Diversity Wheel

Diversity WheelLearnings - As individuals, we are all diverseAs organizations and work groups, some are more diverse than othersImportant to understand your mix (customers, employees & stakeholders) now both current state and desired statePeople are both similar and different among a variety of dimensionsNeed to understand the impact of culture

Employment DiscriminationDiscrimination on the basis of:-DisabilityRaceAgeMinorityMarital status

Equal Employment Opportunities (EEO)It means eliminating barriers to ensure that all employees are considered for the employment of their choice and have the chance to perform to their maximum potential.

Equal Employment Opportunities (EEO)Objectives - To promote recognition and acceptance of everyone's right to equality of opportunityTO eliminate, as far as possible, discrimination against people by prohibiting discrimination on the basis of various attributesTO eliminate, as far as possible, sexual harassmentTO provide redress for people who have been discriminated against or sexually harassed.

Equal Employment Opportunities (EEO)EEO practices include:fairness at work, hiring based on merit and promotion based on talent.It concerns all aspects of employment including recruitment, pay and other rewards, career development and work conditions

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