International Human Resources Management

1. International Human Resources Management Chapter 4 Strategic IHRM

2. Strategic IHRM The role of HR in the globalization of a business is largely strategic in nature. One of the key ingredients for MNC success in going global is the organizations capability to be able to scale to the new country, its culture and its rules and norms, all of which rest with the HRM team

3. Understanding Strategy Strategy is commonly articulated as Corporate Level strategy Business Level Strategy Functional Level Strategy

4. Nature of Strategic IHRM The foundation for sound strategic IHRM practices can be summarized as : Clear understanding of the nature and scope of the business that the MNC engages in Understanding of the global challenges that the business, industry faces Knowledge of the sources of competitive advantage that the company has over its competitors Identify the organizational capability that provides the company with the competitive advantage Establish the HR activities that can be globalised and those that can be localized Provide knowledge on the HR best practices w.r.t. staffing, rewarding and managing the workforce that will enable strategic advantage

5. Two Dimensions to Strategic IHRM IHR initiatives could be driven by the parent company/ headquarters and commonly implemented globally across all businesses IHR which is localized and deployed at the business unit level

6. Strategic IHRM practiced as….. IHR initiatives could be driven by the parent company/ headquarters and commonly implemented globally across all businesses

7. Strategic IHRM initiatives… 1 Creating the global vision and committing to set of value for the organization Assisting with establishing the HR delivery framework for the new subsidiary Managing HR challenges arising during global mergers and acquisitions

8. Strategic IHRM initiatives … 2 Responsible for strategic decisions to retrench/ downsizing or shutting down of operations at a remote location Supporting decisions related to increasing the size of subsidiary

9. Strategic IHRM initiatives …. 3 Constantly aligning the HR practices to meet the needs of the changing external environment , shifts in the marketplace , competition, advent of new technologies and such changes that call for a strategic realignment within the company

10. Strategic IHRM practiced as….. IHR which is localized and deployed at the business unit level

11. Strategic IHRM initiatives …. 1 Local hiring norms and practices and prevailing methods to attract and retain talent Salary structures, job bands, hierarchies/levels, titles and associated perks and benefits Work practices that are locally prevalent and unique to the country and the culture of the host subsidiary

12. Strategic IHRM initiatives … 2 Ensuring strategic compliances with the statutory requirements per country norms Coping with HR related challenges due to shifts in the local market place, competition, or the advent of new technologies

13. Linking MNC strategies to HR activities

14. Linking MNC strategies to HR activities

15. Linking IHRM to business strategy….. New Business strategy is crafted Interpretation : consider Functional HR implication Inspection : Business plan is considered by each business Insertion : provide inputs to the business plan Integration : of HR insights into the business strategy

16. Strategic HR Choices Staffing the organization both at the global as well can local level Building Core competencies and competitive abilities globally and locally Structuring the organization and work effort to ensure minimal conflicts at HQ/ local subsidiary level

17. 6 Strategic HR Choices Staffing Choices Appraising choices Compensating choices Training and Development choices Employee influence Work systems

18. Staffing Choices Internal sources Narrow career paths Single career paths Explicit criteria Limited socialization Closed procedures External sources Broad career paths Multiple career paths Implicit criteria Extensive socialization Open procedures

19. Appraising Choices Behavioural criteria Purpose is developmental, remedial, maintenance Low employee participation Short term criteria Individual criteria Results criteria High employee participation Long term criteria Group criteria

20. Compensating Choices Low Base Salaries Internal equity Few perks Standard, fixed package Low participation No incentive Short-term incentives No employment security Hierarchical High Base salaries External equity Many perks Flexible package High participation Many incentives Long –term incentives High employment security High participation

21. Training and Development Choices Short term narrow application Productivity emphasis Spontaneous, unplanned Individual orientation Low participation Long term Broad application Quality emphasis planned, systematic Group orientation High participation

22. Employee Influence Collective Bargaining Formal due process No employee input No employee ownership Employee empowerment Individual Bargaining Informal(or no) due process Broad employee participation Employee complaince Partial or complete employee ownership

23. Work systems Job simplification Explicit job analysis Team orientation Narrowly defined jobs Participative management Specialize jobs Close supervision Job enrichment Implicit job analysis Individual orientation Broadly defined jobs Directive management Rotation among jobs Self or peer supervision

24. HR Preparedness Be a techno-professional and acquire basic business and technology knowledge about the company, its competition, the industry and the global challenges for the business Be informed on the local economic conditions in the various countries that influences your business/industry Subscribe to itenrnational magazines and e-groups / blogs to remain updated on current happening in the labor market and workspace Earn your place at the ‘strategy’ table