1. Introduction

BM025-3-3 International Human Resource Management

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IHRM Chapter 1*Define key IHRM termsReview expatriate management evolutionOutline differences between domestic and international HRMDiscover the increasing complexity and potential challenges of current IHRM Chapter Objectives

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Terms*IHRM Chapter 1

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1/*Figure 1-1: Inter-relationships between approaches in the field

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1/*Figure 2-1: A model of IHRM

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HRM Activities*IHRM Chapter 1An organizations HRM activities include:Human resource planningStaffing (recruitment, selection, placement)Performance managementTraining and developmentCompensation (remuneration) and benefitsIndustrial relations

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Differences between domestic HRM & IHRM*IHRM Chapter 1The complexity of IHRM can be attributed to six factors:More HR activitiesThe need for a broader perspectiveMove involvement in employees personal livesChanges in emphasis as the workforce mix of expatriates and locals variesRisk exposureBroader external influences

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What is an expatriate?An employee who is working and temporarily residing in a foreign countrySome firms prefer to use the term international assigneesExpatriates are PCNs from the parent country operations, TCNs transferred to either HQ or another subsidiary, and HCNs transferred into the parent country1/*

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1/*Figure 1-3: International assignments create expatriates

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Differences between domestic HRM & IHRM*IHRM Chapter 1The complexity of IHRM can be attributed to six factors:More HR activitiesThe need for a broader perspectiveMove involvement in employees personal livesChanges in emphasis as the workforce mix of expatriates and locals variesRisk exposureBroader external influences

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More HR ActivitiesInternational taxationInternational relocationLanguage translation servicesHost government relations1/*

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Broader PerspectiveNo more a uniform compensation policyDesigning programs for more than one national group of employees.International perspective of expatriate benefits

1/*

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More involvement in personal livesHousing arrangementsBenefits and allowancesSchooling for childrenSpouse assistance1/*

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Changes in emphasis on workforce mixForeign operations will mature after a period of timeThe need for PCNs and TCNs will declineLocal staff become more trainedWill change planning, staffing, training and development1/*

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Risk ExposureHuman and financial costs of failure is highDirect costs, such as salaries and benefitsOther costs such as damaged relationships with host countryRisks also include terrorism, diseases etcEg, World Trade Centre and SARs

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Broader External InfluenceEconomyPolitical aspectGovernments Hiring policies 1/*

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*IHRM Chapter 1Table 1-2World top ten non-financial transnational corps., ranked only by foreign assets

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Variables that moderate differences between domestic HRM and IHRM*IHRM Chapter 1

The complexity involved in operating in different countries and employing different national categories of employeesThe cultural environmentThe industry (or industries) with which the MNE is primarily involvedThe extent of reliance of the MNE on its home-country domestic marketThe attitudes of senior management

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*IHRM Chapter 1A model of the variables that moderate differences between domestic and international HRM Figure 1-4

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Discussion Questions*IHRM Chapter 1What are the main similarities and differences between domestic and international HRM?Define these terms: IHRM, PCN, HCN, and TCN.Discuss two HR activities in which a MNE must engage that would not be required in a domestic environment.Why is a greater degree of involvement in employees personal lives inevitable in many IHRM activities?Discuss at least two of the variables that moderate differences between domestic and international HR practices.

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Tutorial DiscussionImpact of Globalisation on Human Resource Management.

Identify 5 challenges that you as an International HR Manager would face. Provide a solution (how would you overcome) for each of these challenges.

Discuss in groups of 4