bu ihrm mod 1 - 1
TRANSCRIPT
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MODULE 1. INTERNATIONAL
H.R.MDifference between Domestic HRM and
IHRM, Managing International HRactivities- HR planning, Recruitment &
Selection, Training & Development,Performance management,
Remuneration, Repatriation & employeerelations. Socio-Political Economic
SystemU.S, U.K, Japan and Indiaacomparative analysis.
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Why study of IHRM is essential?
Impact of internationalisation of business
- Boundary-less business operations
- Increasing international competition on
quality, price, delivery schedule, material
availability etc
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Typical HRM activities are:
- HR planning
- Staffing (recuitment, selection, placement)
- Performance management
- Training and development- Compensation and benefits
- Industrial Relations
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Morgan model of IHRM presents three
Dimensions of IHRM:
1. Procurement, allocation and utilisation of HR(covers all typical HR activities)
2. National or country categories involved inIHRM activities.
-Host country-Home country
-Other countries
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3. Category of employees of an international firm
- Host Country Nationals (HCNs)
- Parent Country Nationals (PCNs)
- Third Country Nationals (TCNs)
Example :-US multinational IBM employs
Australian citizen in its Australian operations
(HCNs), often sends US citizens to Asia-pacific
countries on assignments (PCNs) and may send
some of its Singaporean employee on anassignment to its Japanese operations (TCNs)
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Procure Allocate
Utilize
Host
Home
OtherHCNs
PCNs
TCNs
Types of employees
countries
HR Activities
Model of IHRM
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Morgan defines IHRM as the interplay among the
three dimensionsHR activities, type of
employees and countries of operation.Broadly functions remain the same but national
boundaries changes.
Domestic HRM is also now taking IHRM issues like
multicultural workforce issues, workforce
diversity etc. but the context changes when
dealing in international context.
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What is an Expatr iate?
If an employee who is working and
temporarily residing in a foreign country.Also called international assignees.
What is inpatriate?
Transfer of subsidiary employee to parentcountry. Or when HCN is transferred toparent country operation
What is transpatr iate?Employees who are moved between
subsidiaries
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Parent country
HQ/operations
Subsidiary operations
Counrty A
Subsidiary operationsCounrty B
HCNs
PCNs
TCNs
PCNs
HCNs
NationalBorder
NationalBorder
International Assignments creates Expatriates
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Difference between domestic and
I-HRMKey variable that differentiates domestic and
IHRM
complexity of operating in different
countries
employing different national categories of
workers
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Complexity of IHRM according to
Dowling1. More HR activities
2. The need for a broader prospective
3. More involvement in employees personal
life
4. Changes in emphasis as the workforce mix of
expatriates and locals varies5. Risk exposure
6. Broader external influences
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1.More HR activities
(not needed in domestic)
-I nternational taxation:tax equalization to bedesigned, accounting firm for international
taxation advice-I nternational relocation and orientation:pre-
departure training, immigration and travel,information regarding housing etc,
compensation details like salary overseas,allowances, taxation treatment, returning ofexpatriates etc.
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-Admn. Servicesfor the expatriates: in hostcountry, policy/practice may conflict with
local condition. Host country requires AIDStest for work permit for employee whoseparent firm headquarter is in USA where
this remains controversial issue- Host govt. relations:
- Policy/practices in host country:
payment in kind also violates US foreigncorrupt Practices Act.
- language translation service:
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2. The need for a broader perspective
- Face problem of designing and
administering program for more than one
national (PCN,HCN,TCN) who may have towork together in a particular location, have
to take a broader view of issues. Complex
equity issues arise when PCN, HCN andTCN work together and its a major
challenge in IHRM to resolve such issues.
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3. More involvement in employees
personal life- Involvement in employees personal life is
necessary to a greater extent for selection trainingand effective mgmt of PCN and TCN employees
- Multinationals provide IHR services for PCN andTCNs to ensure that expatriate employees bankinginvestment, home rental while on assignment,home visit and final repatriations is properly co-ordinated
- Requirement like marriage certificate etc to takecare at the time of recruitment
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4. Changes in emphasis as the workforce
mix of expatriates and locals varies- The need for PCNs and TCNs declines as
more trained locals become available
- Resources for expatriate taxation, relocationand orientation are transferred to local staffselection, training and managementdevelopment
- The responsibility of local HR activitiesbroadens
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5. Risk exposureThe potential high cost problems are:
- Expatriate failure
- Under performance while on internationalassignment
- The direct cost per failure to the parent firm may
be even three times the domestic salary plusrelocation expenses. The indirect cost are:
- loss of foreign market share
- damage to key host country relationship
- terrorism and political risk
- devise emergency evacuation procedure
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6. Broader external influences
Major external factors influencing IHRM:
Type of government
The state of the economy
Accepted practices of doing business in host
countries (host government dictating hiring
procedures)
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Variable that moderates differences
between Domestic and Intl HRMThe cultural
environment
The indust(s)
within which the
MNC is
primarily invld
Comlexity invld in
oprtng in diff
count and emploing
diff categ of employees
Attitude of
Senior mgmt
Extent of reliance
of MNC on its
Home Country
or domestic mkt
Domestic and Intl
Activities of HRM func
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Cultural environment
Culture is acquired thru socialisation processwhich begins at birth
Behavioral attitude are transmitted culturally
During visit abroad, cultural differences in
language, food, dress, hygiene and attitude to timeis confronted. This ac prove difficult whenrequired to live
Cultural shock is a phenomena experienced by
people who move across cultures. Peopleexperience shock reaction to new culturalexperience that cause psychological disorientation
Cultural shock can lead to negative feeling abouthost country and its people
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Another issue in x-culture is Emic-Etic
distinction
Emic- is culture specific aspects of conceptsor behaviour
Etic- is culture common aspects of concepts
or behaviour