International Hrm

Topics: Human resource management, Human resources, Management Pages: 16 (5865 words) Published: November 29, 2011
International HRM (IHRM) is the process of procuring, allocating, and effectively utilizing human resources in a multinational corporation, while balancing the integration and differentiation of HR activities in foreign locations (Briscoe et al, 2009). IHRM should function in a way it should avoid cultural risks, regional disparities and must manage diversified human capital.The managerial responsibilities must include developing a global “mindset” by weighting on informal control mechanism, fostering horizontal communication, using cross-border and virtual teams and using international assignments. They should create cultural synergy and use cross-cultural skills daily and must treat foreign colleagues as equals and use foreign assignments as career development (Dowling, 2008). IHRM has paralleled the internationalisation of business whereby large corporations increasingly produce and market beyond their countries of origin. This process has also signalled the internationalisation of employees as well, which has shifted HRM to a business activity of strategic importance (Armstrong, 2001) . It could be argued that the practice and study of international HRM has evolved alongside globalisation; business is operating in an increasingly international environment. In fact, ‘International HRM’ is often the term given to the management of HR in Multi National Corporations (MNCs) (Almond et al. 2004). IHRM concerns the extent to which these core tasks change when HRM is practiced across national boundaries. On this basis, Morgan (1986 ) presents a model of IHRM based on the interplay between human resource tasks or activities, the national or country categories involved in HRM and the categories of employees in an international firm. The functions of HRM for an organization to go abroad should tally with the expectations of that host country where a subsidiary may be located, the home country where the firm is headquartered and other countries that may be the source of labour, finance and other inputs. In this model, internationalisation adds layers of complexity to the task of HRM within a particular firm. (Dowling et al, 2008) Based on the work of Perlmutter (1969 ), MNCs then face three strategic choices to function and to cope with this complexity: ethno-centric, polycentric and global. An ethnocentric strategy is where a company uses the same HR practices overseas as it does at home. By contrast, a polycentric strategy involves a company following local HR practice in its overseas operations. A global strategy is where a company attempts to implement common HRM policies for all its overseas operations (Myloni 2002). Ofcourse, this implies an element of choice for senior managers and the reality is that hybrid strategies will emerge. Torrington et al. (2005 ) argue that International HRM is also concerned with decentralisation: As an organisation increases its international activities, it inevitably steps up the degree of decentralisation, but internationalisation is not simply a form of decentralisation. It is the most complex form of decentralising operations and involves types of difference – language, culture, economic and political systems legislative frameworks, management styles and conventions – that are not found in organisational growth and diversification that stay within national boundaries. The further success of firms lies in how the international HR manager identifies and copes with these ‘types of differences’. Another point about international HRM is that MNCs will also wish to use HRM policies as mechanisms for the central coordination and control of international operations, in addition to shaping the organisational culture (Myloni 2002) . Inevitably, there are a number of models of International HRM that attempt to explain how the strategic objectives of the organisation are balanced with local employee needs and values. In that case, it is perhaps more useful for...
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