Differences between domestic and international HRM
With the development of globalization, the blending and collision of domestic enterprises and foreign enterprises is becoming more and more fierce (Xinqi, 2004). More and more foreigners are sent out of their own countries and work in another country. It is probably no exaggeration to say that every day in every country in the world, there are people being sent out and sent in. And the increase of expatriates between one country and another country inevitably bring new challenges to human resource management, such as culture shock and the differences between domestic HRM and international HRM. Many firms underestimate the complexities and problems involved in international businesses, and do not pay enough attention on them. It is no surprise when the firms fail in the international businesses. Evidences have been found and prove that business failures in the international arena are usually relative to poor human resource management (Dowling, Festing, & Engle, 2008, p. 9). In addition, human resource management in an international environment is even more complex than domestic human resource management. Therefore, if the firms want to succeed in the international arena, they should not only have a good domestic HRM, but also have a good international HRM. To have a good international HRM, they can not just copy domestic HRM. They should know that there are differences between domestic HRM and international HRM. The complexity of operating in foreign countries and employing workers from different countries is a key variable that makes domestic and international HRM different (Dowling, et al. 2008, p. 5). The complexity of international HR can be attributed to six factors, but here we just discuss three of them (more human resource activities, more involvement in employees’ personal lives, higher risk) and the differences of the training of employees.
2.1 International HRM has more human resource activities than domestic HRM. Domestic HRM include at lease six activities: human resource planning; staffing; performance management; training and development; compensation and benefits; industrial relations. However, the scope of international HRM is much broader than that of domestic HRM. In other words, international HRM has some activities the same as domestic HRM (e.g., human resource planning and staffing), but some activities which are not necessary in domestic HRM will be necessary in international HRM, too. These activities are issues connected with: international taxation; international relocation and orientation; administrative services for expatriates; host-government relations; and language translation services (Aswathappa, 2007). Firstly, in domestic environment, employees of the company are all from only one country, and activities such as international relocation, orientation and language translation services are not needed. The company will save much time, effort and money in this case. But when the company goes into international environment, it must put additional time, effort and money on international relocation, orientation and language translation services, etc. to help expatriates adapt the new environment which is differ from their own countries (Sims, 2007). Secondly, in domestic environment, company just needs to deal with domestic taxation. However, in international environment, company not only needs to deal with domestic (home-country) taxation, but also needs to deal with international (host-county) taxation. Thirdly, in international environment, company should provide administrative services for expatriates, because policies and procedures will sometimes be vague and be opposite to local environment. But these services are usually a time-consuming and complex activity. Let me give an example of ethical conflicts. Ethical problems will occur when some thing which is legal and accepted in...
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