International Human Resources Management (IHRM) definitions are wide-ranging and for some, IHRM issues explore aspects of Human Resources Management (HRM) in Multinational Enterprises (MNE)’s (Briscoe 1995) while others ‘strategic international human resource management (SHRM) is no more than the application of SHRM to the international or global business context’ (Nankervis, Compton & Baird 2002, p.617). Much IHRM work has focused on the areas of international staffing and management development, however, IHRM should not neglect many related areas (Rowley & Benson 2002). Another approach focuses on comparative industrial relations (IR) and HRM, where attempts are made to describe, compare, and analyse HRM systems and practices across countries (Verma, Kochan & Lansbury 1995).
Dowling, Schuler & Welch, 1994 gives definition of IHRM as follows:
“IHRM consists of a collection of policies and practices that a multinational enterprise uses to manage local and non-local employees it has in countries other than their home countries.”
The integration of more comparative views, approaches and perspectives within IHRM can be useful, and helps in providing more insight into what is “normal” as opposed to “exceptional” in HRM practices and systems (Nankervis, Compton & Baird, 2002; Rowley & Benson 2002). However, IHRM should not become a description of fragmented responses to distinctive national problems nor about the ‘copying’ of HRM practices, as many of these practices suit national cultures and institutions without necessarily being transferable. Indeed, issues of concern in IHRM are those of consistency or standardization, versus customization or adaptation, within diverse social and cultural environments (Nankervis, Compton & Baird, 2002).
Existing IHRM Models
Several conceptual models seek to describe and predict how MNEs might conduct IHRM on an abstract level from a macro, strategic perspective (Adler, Ghadar 1990; Evans & Lorange 1989; Evans, Pucik & Barsoux 2002; Milliman, Von Glinow & Nathan 1991; Nankervis, Compton & Baird 2002; Schuler et al 1993, 2002; Taylor, Beechler & Napier 1996; Welch 1994). What MNEs actually do and, more importantly, how they do it not so well documented.
Practioners’ literature seems to struggle with the description of how the IHRM system ‘established itself’ in the wake of business expansion, rather than being aware of a choice (Napier & Vu 1998; Roberts, B. 2000; Rynes, Bartunek & Daft 2001). Authors of early conceptual models argue that the central issue is to find the best fit between the MNE’s overall strategy and its IHRM policy, not to identify the best overall IHRM policy (Adler & Ghadar 1990; Milliman, Von Glinow & Nathan 1991; Nankervis, Compton & Baird 2002; Schuler et al 1993, 2002; Taylor, Beechler & Napier 1996), the organizational structure (Schuler et al 1993, 2002), the HQ’s international orientation (Schuler et al 1993, 2002; Taylor, Beechler & Napier 1996), the host country’s cultural and legal environments (Adler & Ghadar 1990, Milliman, Von Glinow & Nathan 1991; Schuler et al 1993, 2002, Taylor, Beechler & Napier 1996), the resources or strategic role of affiliates and certain employee groups (Nankervis, Compton & Baird 2002; Taylor, Beechler & Napier 1996).
Internal Factors Determining Strategic IHRM
Welch (1994), from research in four Australian firms, suggests that ‘international HRM approaches and activities are stage of internationalization, type of industry, strategy and structure, and organization (p. 150).
Stage of Internationalization Process
The stage of the internationalization process is a useful tool in understanding the HRM policies adopted by many firms. The firms could be broadly grouped into two categories: firms which had entered the international market before 1980 and those which had entered after that date. Firms which had entered ‘early’, had a more laissez faire attitude to IHRM issues: they tended...