ihrm in erm
TRANSCRIPT
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An Introduction to IHRM
Dr.Yogananthan
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Content
Introduction
Ice breakerMyths!!!
International orientation (IB?)
Strategic IHRM Reasons to go for IHRM
IHRM model
Differences between HRM & IHRM
Challenges of IHRM
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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 corporations
culture
The need to be flexible
The need to learn
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Increasing Importance of Global Human Resource
Understanding
International
Mergers and
Acquisitions
Importance of
Global Human
Resources
Management
Foreign Human
Resources
Global
Competition
Market Access
Opportunities
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Figure 151 Types of Organizations
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Managing Across Borders
International corporation
Domestic firm that uses its
existing capabilities to
move into overseasmarkets.
Multinational corporation
(MNC)
Firm with independentbusiness units operating in
multiple countries.
Global corporation
Firm that has integrated
worldwide operations
through a centralized homeoffice.
Transnational corporation
Firm that attempts to
balance local
responsiveness and global
scale via a network of
specialized operating units.
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Approaches To International Human Resource
Management
Ethnocentric: Highly centralized. HQcontrols PCNs dominate.
Polycentric: Decentralized. Each subsidiaryhas some degree of decision makingautonomy. HCNs manage subsidiaries.
Geocentric: Ignores nationality in favor ofability and competence needs in aworldwide integrated business strategy.
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Choosing an Approach to IHRM
Corporate International Strategy
Political and Legal Concerns
Level of Development in Foreign Locations
Technology and the Nature of the Product
Organizational Life Cycle Cultural Differences
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Convergence or Divergence?
Large corporations
preference for
consistent worldwidesystems
Smaller companies
desire for more
professional systems
Need to follow localHRM laws
Development of
unique techniquesand practices to suit
local cultural and
legal requirements
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Reasons for IHRM
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Forces for Change
Global competition:
Growth in mergers, acquisitions and alliances:
Organization restructuring:
Advances in technology and
telecommunication:
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Impacts on Multinational Management
Need for flexibility:
Local responsiveness:
Knowledge sharing:
Transfer of competence:
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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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Factors that Influence the Global Work Environment
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What does IHRM add into the Traditional
Framework of HRM? Types of employees
Within and cross-cultural workforce diversity Coordination Communication
Human resource activities Procurement Allocation Utilization of human resources
Nation/country categories where firms expand andoperate Host country Parent country Third country
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A Model ofIHRM
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Some Terms Defined
Host Country National (HCN): Belongs to
the Country where the subsidiary is located
Parent Country National (PCN): Belongs tothe Country where the firm has its
headquarters
Third Country Nationals (TCN): Belongs toany other country and is employed by the
firm
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What is an expatriate?
An employee who is working and temporarily residingin 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, andHCNs transferred into the parent country
Global flow of HR: more complexity in activities and
more involvement in employees' lives
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Models of IHRM
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Matching ModelFomburn,
1984 Highlights the right fit between Human
resource systems with organizational
strategy, structure.
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Harvard ModelBeer et al, 1984
Stresses Human
Concerned about employeremployee
relationship
High lights the interests of various
stakeholders both internal and external
Match between stakeholders interest and
organizational objective
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Contextual modelHendry &
Pettigrew, 1988 It concentrates on organizations may follow
no of pathways in order to achieve results.
External environmentsocio economical,politico legal, technological & competitive
Internal enviornmentculture, structure,
leadership, technology & business output.
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5 P model- Schuler, 1992
Five HR activities
Philoshopy
Policy
Programmes
Practices
Processes with strategics needs of
organization
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European modelBrewster, 1993
&1995 Constrained between internatioanl
(European union) and national level by
national culture and legislation. Patterns of ownership, HRM practices in
union, consultative arrangements.
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Choosing an Approach to IHRM
Corporate International Strategy
Political and Legal Concerns
Level of Development in Foreign Locations
Technology and the Nature of the Product
Organizational Life Cycle
Cultural Differences
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Main challenges in IHRM
High failure rates of expatriation and repatriation
Deploymentgetting the right mix of skills in theorganization regardless of geographical location
Knowledge and innovation disseminationmanagingcritical knowledge and speed of information flow
Talent identification and developmentidentifycapable people who are able to function effectively
Barriers to women in IHRM International ethics
Language (e.g. spoken, written, body)
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Major differences between domestic
HRM and IHRM Business activities e.g. taxation, international relocation,
expatriate remuneration, performance appraisals, cross-culturaltraining 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, childrens education,health, recreation and spouse employment
Complex employee mixcultural, political, religious, ethical,
educational and legal background Increased risks e.g. emergency exits for serious illness, personalsecurity, kidnapping and terrorism
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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 ofexpatriates and locals varies: fairness
Risk exposure: expatriate failure, terrorism Broader external influences: government
regulations, ways of conduct
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Variables that Moderate Differences between
Domestic HR and IHRM
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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, status systems
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Reference
Chris Chan, Introduction to IHRM,
BUSN3025 seminar, 2003.
Peter J Dowling, Denice EWelch,International Human Resource
Management, Cengage Learning.