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Chapter 1

Chapter 1. Introduction of IHRM. Chapter Objectives. We will establish the scope of the textbook: Define IHRM and key terms Introduce and review expatriate/international assignment management and evolution Outline differences between domestic HRM and IHRM

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Chapter 1

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  1. Chapter 1 Introduction of IHRM IHRM, Dr. Yang

  2. Chapter Objectives • We will establish the scope of the textbook: • Define IHRM and key terms • Introduce and review expatriate/international assignment management and evolution • Outline differences between domestic HRM and IHRM • Identify variables that moderate these differences • Discover complexity and increasing challenges of current IHRM practices and models • Discuss trends and emerging challenges in the global work environment in which IHRM functions and activities are conducted IHRM, Dr. Yang

  3. Three Approaches to IHRM • Cross-cultural management • Examine human behavior within organizations from an international perspective • Comparative HRM and Industrial Relations • Seeks to describe, compare and analyze HRM systems and IR in different countries • HRM in multinational firms • Explore how HRM is practiced in multinational firms IHRM, Dr. Yang

  4. Interrelationships between Approaches to the Field Figure1-1 IHRM, Dr. Yang

  5. The General Field of HR • Major Functions and Activities • Human resource planning • Staffing • Recruitment • Selection • Placement • Performance management • Training & development • Compensation & benefits • Industrial relations IHRM, Dr. Yang

  6. 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 and operate • Host country • Parent country • Third country IHRM, Dr. Yang

  7. The Interplay of Three Dimensions (Morgan’s Model of IHRM) IHRM, Dr. Yang

  8. 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 human resources IHRM, Dr. Yang

  9. International Assignments Create Expatriates Figure1-2 IHRM, Dr. Yang

  10. The Expansion Scope of IHRM • The field of IHRM covers all issues related to managing the global workforce and firm outcomes • A wide range of HR issues facing MNEs in different parts of their organizations • This definition includes comparative analyses of HRM in different countries (Stahl, Björkman & Morris, 2012). IHRM, Dr. Yang

  11. Added Complexity between Domestic HRM and IHRM • More HR activities • The need for a broader perspective • More involvement in employees’ personal lives • Changes in emphasis as the workforce mix of expatriates and locals varies • Risk exposure • Broader external influences IHRM, Dr. Yang

  12. Examples of IHR Activities • International taxation • International relocation & orientation • Administrative services for expatriates • Host-government relations • Language translation services IHRM, Dr. Yang

  13. Expatriation and Relocation • Arranging for pre-departure training • Providing immigration & travel details • Providing housing, shopping, medical care, recreation & schooling information • Finalizing compensation details such as: • Delivery of salary overseas • Determination of overseas allowances • Taxation treatment IHRM, Dr. Yang

  14. Variables that Moderate Differences between Domestic HRM and IHRM Figure1-3 IHRM, Dr. Yang

  15. Culture Matters • Culture shock • Emic-etic distinction • Convergence hypothesis • Research tends to focus on macro level variables • Divergence hypothesis • Research tends to focus on micro level variables • The international HR manager must be aware of cultural differences. IHRM, Dr. Yang

  16. The MNE Industry Type Continuum An MNE performs somewhere in this range: Multi-domestic Industries Global Industries Examples: Retailing, distribution, insurance International strategy: Collapses to a series of domestic strategies Airlines, semiconductors, copiers Must integrate activities on a worldwide basis IHRM, Dr. Yang

  17. The world’s top 10 non-financial TNC ranked by TNI 2008a IHRM, Dr. Yang

  18. What does senior management think? • Some of the changes required to truly internationalize HR • Have more to do with a global mindsetthan with behaviors. IHRM, Dr. Yang

  19. A Framework of Strategic HRM in MNEs Figure1-4 IHRM, Dr. Yang

  20. Asymmetric Events • Reflects heightened concerns about security, risk, and volatility in the global markets • Unmatched in our capabilities & plans • Highly leveraged against our particular assets • Designed not only to • Secure leverage against our assets, but also intended to • Work around, offset, and negate what in other contexts are our strengths • Difficult to respond to in a discriminate and proportionate manner IHRM, Dr. Yang

  21. The Changing Context of IHRM MNEs fail primarily because of • A lack of understanding of the essential differences in managing human resourcesin foreign environments. • These human considerations are • as important as the financial and • marketing criteria IHRM, Dr. Yang

  22. Summary • Defining IHRM and key terms • Contrast between Domestic vs. IHRM • Variables that moderate the differences • Complexity and challenges of IHRM • The cultural environment • Industry type • Extent of MNE reliance on its domestic market • Senior mgmt. attitudes to international operations • Applying a strategic view of IHRM • The changing context IHRM, Dr. Yang

  23. Vocabulary • HRM, IHRM • PCN, HCN, TCN • MNE • Expatriate, inpatriate, repatriate, international assignee, • Expatriation-Repatriation • Equity issues • Psychological contract • Culture shock • Convergence/divergence hypotheses • Porter’s value chain model • Index of transnationality • Global mindset • Asymmetric events • Environmental dynamics • Organizational culture IHRM, Dr. Yang

  24. Discussion Questions • What are the main similarities and differences between domestic and international HRM? • Define these terms: IHRM, PCN, HCN, and TCN. • Discuss two HR activities in which a MNE must engage that would not be required in a domestic environment. • Why is a greater degree of involvement in employees’ personal lives inevitable in many IHRM activities? • Discuss at least two of the variables that moderate differences between domestic and international HR practices. IBUS 628 Dr. Yang

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