International Human Resource Management

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  • Topic: Human resources, Human resource management, Labour economics
  • Pages : 5 (959 words )
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  • Published : March 15, 2011
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Human Resource Management (HRM) involves all decisions that directly affect the people who work for the concerned organizations and corporate enterprises. Hence, HRM can be termed as a strategic and coherent approach to an organization’s most prized asset- the people working there, who individually and collectively strive towards achieving the organizational goals. In simple words, HRM means employing people, developing their capacities, utilizing, maintaining & compensating their services in tune with the job and organizational requirements.

International Human Resource Management (I-HRM)
This involves a process of procuring, allocating & effectively utilizing human resources in a multinational corporation while balancing the integration & differentiation of human resource activities in foreign locations.

Objectives of I-HRM:
To reduce the risk of international human resource
It has helped a lot in reducing the risk in the business by using a proper standard recruitment & selection process. To avoid cultural risks
I-HRM has helped a lot in overcoming the intercontinental culture by making people coming from different of the world work together in a cohesive and coherent manner, under the same roof. To manage diversified human capital

The human capital available to companies is diversified on the grounds of culture, habits, characteristics & various other factors. I-HRM helps in managing these and uses them in a convergent manner to achieve organizational goals.

P. Morgan’s model of HRM:

Two groups of variables that affect the basic HR process:
1.Types of Employees
2.Political, legal, economic, legal environment, labor laws & practices prevailing in different countries. It consists of three dimensions:
1)Three broad HR activities: procurement, allocation and utilization. 2)Three national or countries categories involved in international HRM activities: Host country where a subsidiary may be located, home country where the firm is headquartered and “other” countries that may be the source of labor or finance. 3)Three employees of an international firm: Host Country Nationals (HCNs), (parent Country Nationals (PCNs) and Third Country Nationals (TCNs) IBM employs Australian citizens (HCNs) in its Australian operations, often sends U.S. citizens (PCNs) to Asia-Pacific countries on assignment and may send some of its Singaporean employees on an assignment to its Japanese operations as (TCNs)

Elements of I-HRM:

Human Resource Activities

Nation Categories
Host Country: A country in which the MNC seeks to locate or has already located a facility. Parent Country: The country in which the company’s corporate headquarters are located. Third Country: The countries other than the one in which the MNC is headquartered or the one in which it is assigned to work by the MNC.

Employees in MNC’s
Host Country Nationals
Home Country Nationals
Third Country Nationals

HR Functions of MNC’s
Human Resource Planning
Performance Management
Training and Development
Compensation and Benefits
Labor Relations

Differences between I-HRM & Domestic HRM (D-HRM):
There are 4 variables that moderate differences between domestic and international HRM: Cultural Environment
Industries with which the multinational is primarily involved Extent of reliance of the multinational on its home-country domestic market Attitudes of senior management

The success of many organizations depends upon their ability to internationalize their operations. This is done in various stages- Stage 1: Domestic Operations
Firms offer products or services that are designed to primarily serve consumers in the domestic market (e.g., law firms) Stage 2: Export Operations
Products and services are opened up to markets in other countries, but production...
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