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IHRM, Dr. Yang 1
Chapter 1
Introduction of IHRM
IHRM, Dr. Yang 2
Chapter Objectives
We will establish the scope of the textbook:Define IHRM and key terms
Introduce and review expatriate/international assignment management and evolution
Outline differences between domestic HRM and IHRM
Identify variables that moderate these differences
Discover complexity and increasing challenges of current IHRM practices and models
Discuss trends and emerging challenges in the global work environment in which IHRM functions and activities are conducted
IHRM, Dr. Yang 3
Three Approaches to IHRM
Cross-cultural management Examine human behavior within organizations
from an international perspective Comparative HRM and Industrial Relations
Seeks to describe, compare and analyze HRM systems and IR in different countries
HRM in multinational firms Explore how HRM is practiced in multinational
firms
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Interrelationships between Approaches to the Field
Figure1-1
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The General Field of HR
Major Functions and Activities Human resource planning Staffing
Recruitment Selection Placement
Performance management Training & development Compensation & benefits Industrial relations
IHRM, Dr. Yang
6
What does IHRM add into the Traditional Framework of HRM? Types of employees
Within and cross-cultural workforce diversity Coordination Communication
Human resource activities Procurement Allocation Utilization of human resources
Nation/country categories where firms expand and operate Host country Parent country Third country
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The Interplay of Three Dimensions (Morgan’s Model of IHRM)
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What is an expatriate?
An employee who is working and temporarily residing in a foreign country Some firms prefer to use the term “international
assignees” Expatriates are PCNs from the parent country
operations, TCNs transferred to either HQ or another subsidiary, and HCNs transferred into the parent country
Global flow of human resources
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International Assignments Create Expatriates
Figure1-2
The Expansion Scope of IHRM
The field of IHRM covers all issues related to managing the global workforce and firm outcomes
A wide range of HR issues facing MNEs in different parts of their organizations
This definition includes comparative analyses of HRM in different countries (Stahl, Björkman & Morris, 2012).
IHRM, Dr. Yang 10
IHRM, Dr. Yang 11
Added Complexity between Domestic HRM and IHRM
More HR activities The need for a broader perspective More involvement in employees’ personal
lives Changes in emphasis as the workforce mix of
expatriates and locals varies Risk exposure Broader external influences
Examples of IHR Activities
International taxation International relocation & orientation Administrative services for expatriates Host-government relations Language translation services
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Expatriation and Relocation
Arranging for pre-departure training Providing immigration & travel details Providing housing, shopping, medical care,
recreation & schooling information Finalizing compensation details such as:
Delivery of salary overseasDetermination of overseas allowancesTaxation treatment
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IHRM, Dr. Yang 14
Variables that Moderate Differences between Domestic HRM and IHRM
Figure1-3
Culture Matters
Culture shock Emic-etic distinction Convergence hypothesis
Research tends to focus on macro level variables Divergence hypothesis
Research tends to focus on micro level variables The international HR manager must be aware
of cultural differences.
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The MNE Industry Type Continuum
An MNE performs somewhere in this range:
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Multi-domestic Industries Global Industries
Examples:Retailing, distribution, insurance
International strategy:Collapses to a series of domestic strategies
Airlines, semiconductors, copiers
Must integrate activities on a worldwide basis
The world’s top 10 non-financial TNC ranked by TNI 2008a
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What does senior management think?
Some of the changes required to truly internationalize HR
Have more to do with a global mindsetthan with behaviors.
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A Framework of Strategic HRM in MNEs
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Figure1-4
Asymmetric Events
Reflects heightened concerns about security, risk, and volatility in the global markets
Unmatched in our capabilities & plans Highly leveraged against our particular assets Designed not only to Secure leverage against our assets, but also intended to Work around, offset, and negate what in other contexts
are our strengths
Difficult to respond to in a discriminate and proportionate manner
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The Changing Context of IHRM
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MNEs fail primarily because of A lack of understanding of
in managing human resourcesin foreign environments.
the essential differences
These human considerations are as important as the financial and marketing criteria
Summary Defining IHRM and key terms Contrast between Domestic vs. IHRM Variables that moderate the differences
Complexity and challenges of IHRM The cultural environment Industry type Extent of MNE reliance on its domestic market Senior mgmt. attitudes to international operations
Applying a strategic view of IHRM The changing context
22IHRM, Dr. Yang
Vocabulary
HRM, IHRM PCN, HCN, TCN MNE Expatriate, inpatriate,
repatriate, international assignee,
Expatriation-Repatriation Equity issues Psychological contract Culture shock
Convergence/divergence hypotheses
Porter’s value chain model
Index of transnationality Global mindset Asymmetric events Environmental dynamics Organizational culture
IHRM, Dr. Yang 23
IBUS 628 Dr. Yang 24
Discussion Questions
1. What are the main similarities and differences between domestic and international HRM?
2. Define these terms: IHRM, PCN, HCN, and TCN.3. Discuss two HR activities in which a MNE must engage that
would not be required in a domestic environment.4. Why is a greater degree of involvement in employees’
personal lives inevitable in many IHRM activities?5. Discuss at least two of the variables that moderate
differences between domestic and international HR practices.