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Presentation on International HRM:

Presentation on International HRM Special thanks to Dr. Harish Shukla

What is IHRM:

What is IHRM International HRM is the process of procuring, allocating and utilizing human resource in an MNC or a global firm.

Why International Human Resource Management?:

Why International Human Resource Management? Increasing globalization, firms and employees in them moving all over the world. Major problems in international operations because of human resource management blunders Hence need to understand human resource management in a global perspective

Why International Human Resource Management? (cont’d):

Why International Human Resource Management? (cont’d) The role of HR in International Operations Managing a Multicultural Workforce Developing Managerial Talent in a Global Business Environment

What does IHRM add into the Traditional Framework of HRM?:

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

Diversity as an Organizational and HR Challenge in MNE :

Diversity as an Organizational and HR Challenge in MNE

Forces for Change:

Forces for Change Global competition : Growth in mergers, acquisitions and alliances : Organization restructuring : Advances in technology and telecommunication :

Major approaches to managing and staffing subsidiaries:

Major approaches to managing and staffing subsidiaries Ethnocentric: company uses the approach developed in home country and the values, attitudes, practices and priorities of headquarters determine the HR policies and practices. Polycentric : company considers the needs of the local subsidiary when formulating human resource policies. Regiocentric : the company considers the needs of an entire region when developing the human resource policies and practices. Global or geocentric: The company’s priority is the optimal use of all resources including human resources, local or regional considerations are not considered important for the success of corporate strategy.

Impacts on Multinational Management:

Impacts on Multinational Management Need for flexibility : Local responsiveness : Knowledge sharing : Transfer of competence :

The Expatriate Problem:

The Expatriate Problem High Expatriate Failure Rates Average cost per failure to the parent firm can be as high as three times the expatriate’s annual domestic salary plus the cost of relocation Between 16% & 40% of all American employees sent abroad to developed nations, and almost 70% sent to less developed nations return home early

Reasons for Expatriate Failure:

Reasons for Expatriate Failure Inability of spouse to adjust Manager’s inability to adjust Other family problems Manager’s personal or emotional maturity Inability to cope with larger overseas responsibility Lack of technical competence Difficulties with new environment

Major differences between domestic HRM and IHRM:

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 employee’s personal life e.g. personal taxation, voter registration, housing, children’s education, 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

Example from Japanese MNCs :

Example from Japanese MNCs 1. Borderless structure and bottom-up decision-making processes that encourage communication and information flow among all components 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 skillfully unassertive, while energizing and challenging middle managers with demanding targets. 3. Human resource management , including socialization, training, and promotion via a hierarchy of ranks, job rotation, and appraisal systems that promote hard work, commitment, and competition among peers. 4. Incremental planning and control that help a company expand little by little, focusing on new products and the relentless pursuit of operating improvements, rather than "grand designs" for competitive advantage. 5. An extended family model that encourages and rewards commitment.

IHRM - a shift in thinking Laurent (1986):

IHRM - a shift in thinking Laurent (1986) Explicit recognition by parent org of the existence of assumptions and values of home & host cultures Explicit recognition by parent org – ethnocentrism is neither good/bad, has strengths and weaknesses Explicit recognition of subsidiaries’ preferences – which may be different

IHRM - a shift in thinking Laurent (1986):

IHRM - a shift in thinking Laurent (1986) Willingness to acknowledge cultural difference – discuss and learn Genuine belief in creative and effective ways of managing people through cross-cultural training/learning

Main challenges in IHRM:

Main challenges in IHRM High failure rates of expatriation and repatriation Deployment – getting the right mix of skills in the organization regardless of geographical location Knowledge and innovation dissemination – managing critical knowledge and speed of information flow Talent identification and development – identify capable people who are able to function effectively Barriers to women in IHRM International ethics Language (e.g. spoken, written, body)

Main challenges in IHRM:

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

Slide 18:

THANK YOU. Presented by: Ajita thakur Amita Joshi