Nowadays, many people might think that International Human Resource Management (IHRM) is synonymous with expatriate management. However, IHRM covers more than just the management of expatriates. According to Laurent (1986, pp. 91-93), IHRM is a set of activities aimed managing organisational human resources at international level to achieve organisational goals and achieve competitive advantage over competitors at national and international level. IHRM includes typical HRM functions such as human resource planning, recruitment, selection, placement, training and development, performance appraisal and compensation at international level and additional activities such as global skills management, expatriate management and so on.
According to Scullion (1995, pp352-353), IHRM has become more important in recent years for a number of reasons. First, global activities and global competitions has been increasing rapidly. As the Multinational Companies increase in number and influence, the role of IHRM in those companies grows in significance. Secondly, the effectiveness of International Human Resource Management is now recognised as a major determinant and key source of success or failure in international business. Dowling, Festing and Engle (2008, pp. 9) state that International business has more competitive advantage if they have successful management, and there has been consistent evidence to suggest that business failures in the international arena are often linked to poor management of human resources.
Besides, the nature of IHRM has grown more complex over the years. Managing people from different backgrounds and cultures in a global environment presents and encounters many challenges. IHRM is highly dynamic and constantly evolving. It involves the same activities and dimensions as domestic HRM but operates on a much larger scale. There is more internal and external influence in IHRM. According to Dennis and Randall (2004, pp.22-25), there are huge differences between domestic HRM and International HRM (IHRM). Firstly, domestic HRM is concerned with managing employees belong to one nation and IHRM is concerned with managing employees belong to many nations including host-country, parent country and third country employees. Languages and jargons become communication barriers in IHRM. Secondly, domestic HRM is concerned with managing limited number of HRM activities at national level and IHRM has concerned with managing additional activities such as global skills and expatriate management. Lastly, domestic HRM is less complicated due to less influence from the external environment. IHRM is very complicated as it is affected heavily by external factors such as cultural distance and institutional factors. All the evidences show that IHRM is more complicated than domestic HRM, as a result, there is higher level of risks and more influence into employees’ lives and family situation.
One of the biggest issues is IHRM reflects the interest of HR managers who may seek to promote their own interests rather than the needs of organisations. Firstly, Dowling, Festing and Engle (2008, pp. 5) stress that,
“One of the key features of IHRM as distinct
from domestic HRM are expatriates (an ‘employee
who is working and temporarily residing in a foreign country).”
This statement reflects the uncertainty of employee’s position and duty in IHRM. Due to the differences between domestic HRM and IHRM, when HR managers work in an international organisation, they will realize the uncertainty of their job where they might encounter great difficulties in managing employees, that came from different nations, gender and mixed workforce. In order to secure their job, according to Steven, Mara and Tony (2010, pp.44-46) HR manager tend to promote their personal interests but neglect the needs of...