International Human Resource Management

LO1: Critically review and analyse the importance of HRM and its practices in an
organisation, and how it can be linked with organisational behaviour activities in
overcoming business issues and challenges for a better performance of the organisation.
 Learning Outcomes

LO1: Critically review and analyse the importance of HRM and its practices in an organisation,
and how it can be linked with organisational behaviour activities in overcoming business issues
and challenges for a better performance of the organisation.
LO2: Critically review and analyse the framework of leadership and consider the nature,
strengths and weaknesses of the various approaches: traits, functional, behavioural, style,
contingency. The continuum of leadership behaviour should be explored in some depth with
consideration of the factors determining the chosen leadership style.
LO3: Discuss the concept of organisational behaviour and its interface with management.
Review and critically synthesize the various influences on behaviour in organisations and the
interface with management in integrating and balancing these.
LO4: Asses the role of IHRM and its impact on global organisation. Identify some of the key HRM
challenges facing organisations working internationally. Discuss the prevalent HRM practices
and integrating the best practices in global organisation.
 Learning Outcomes

• LO1: Critically review and analyse the importance of HRM and its practices in an
organisation, and how it can be linked with organisational behaviour activities in
overcoming business issues and challenges for a better performance of the
organisation.
 Human Resource Management
A management function that deals with the people working in or
around the organization.

It deals with hiring, developing, motivating, maintaining, and

retaining the talent in the organization.

“Human Resource Management is the planning, organising, directing and

controlling of the procurement, development, compensation, integration,
maintenance and separation of human resources to the end that
individual, organizational, and social objectives are accomplished.”
Edwin B. Flippo.

This function of the organization has been ever evolving. From

merely being a functional part of the company, this department
has now become a core to the decisions being carried out.
Evolution of the HRM Function
 Traditional v/s Modern HRM

Sno. Traditional HRM Present/Future Trends of HRM

Job designed for teamwork, with a

Job designed for individual work in a
1 chance of gaining maximum
restricted scope
opportunities around the world.
HR systems designed based on
HR systems designed based on
assumption of heterogeneity (gender,
2 assumption of workforce homogeneity
age, ethnicity, nationality)

Flexi-place (work may be done at home,

Standardized work sites & schedules at the customer & employees have
3 set by company greater control over when & where it is
done)
 Perception towards HRM

Sno. Basis Soft HRM Hard HRM

The hard one emphasizes the quantitative,

The soft version traces its roots to the
calculative and business-strategic aspects of
1 Meaning human-relations school. It emphasizes
managing human resources in as “rational” a
communication, motivation and leadership
way as for any other economic factor

People Oriented, Considers HR as biggest Task Oriented, Considers employees as a job

Employer
2 assets. finishing tool. Job should be done as directed.
Attitude

Based on attitude, potential and integration

Based on ability to do the job, or to be trained.
3 Recruitment with team

4 Work Culture Shared Culture, Smart Work Hierarchical, High Pressure, Hard Work
 Importance
of
Human Resource Management
Redressing
Grievance
Enhance and Conflict Achieving
the Quality Organizatio
of Work Life nal Goals

Long-Term
Employee Existence
Retention in the
Market

Fulfil the
Employee
Human Importan welfare and
Resource
Requiremen ce developmen
t
t
Human Resource Management Practices

1. 2.
Conducting Recruitmen
Job t&
Analysis Orientation

3. Training
7. Career
and
Development
Development

4.
6. Employee Compensati
Motivation on and
Benefits

5.
Performanc
e Appraisal
Business Challenges related to HR
Change
Manageme
nt

Leadership
Staffing
Developme
Challenges
nt

Measurem
ent of
Managing
Employee
Diversity
Effectiven
ess

Learning
Successio and
n Planning Developme
nt
 Internationalization

• An approach adopted by the organizations to move from their local markets and expand
into new international boarders is known as internationalization.

• This approach is all about working on a product design that can meet the needs of users
from more than one nation.

• The common reasons for this process is saturation of current market, global
opportunities, competitive pressures, or better productivity and price ratios.

• The following ways are available for a firm to be international:

Licensing
Indirect Direct
and Joint
and Direct Investmen
Franchisin Ventures
Exports t
g
Four Stages of International Evolution
• The companies
operative within the
national boundaries
Domestic with all their supplies
and channels in national
boarders.

•A company that has

operations in several markets
across the globe.
Internatio Headquartered in one place
but various subsidiary
nal offices. Uses domestic
practice in various other
countries.

• Incorporated in one, but now

extends the operations in
several countries along with
Multinatio home country. A MNC
nal formulates
strategies for
different
different
nations.

• A company that has foothold in many

countries around the world but the
Global offerings and processes are consistent in
each country. It either produces in one
country and market globally or produces
globally and markets in one country.
 Globalization vs. Internationalization

Sno. Globalization Internationalization

A result which is desired by the A task or a process which takes place so

1
economies around the globe. that the globalization can be attained.

It is a part of the structure that people

It is a structure that people of various desire to set up. This means
2
economies want to set up. internationalization is a sub-set of
globalization.
It is more individualistic process based on
It is more related to the overall
3 people, firm or business for their goods
economy of the nation.
and services.
Infrastructural setup
Cultural tastes and preferences, local
telecommunications, logistics, etc
4 traditions etc. plays a major role in the
highly affects the globalization
internationalization.
process.
 International Human Resource
Management
A set of activities aimed at managing organizational human
resources at international level to achieve organizational objective
and attain competitive advantage over competitors at national and
international level is known as international human resource
management.

Just like HRM, IHRM also deals with the functions of Human
Resource Management including hiring, training, performance,
dismissal but at an international level with some additional
responsibility of global talent management and expatriate
management.

The objective of IHRM is to ensure that the firm can have an

appealing international presence by making the people aware
about the cultures across the globe and help the management in
formulating the policies that can assist in better production in any
geographical location.
 Variables that moderate
differences between Domestic
and International HRM
The Cultural
Environment

Extent of reliance
The industry within
of the MNC on its
which the MNC is
home country Domestic primarily involved
market
&
Internation
al
activities Complexity
Attitudes of
senior of HRM involved in
operating in
management
different countries

Employing different
nationality
employees
 DHRM V/S IHRM

Sno. Domestic HRM International HRM

International HRM can be defined as set

of activities aimed at managing
Domestic HRM is the process of
organizational human resources at
procuring, allocating and effectively
1 international level to achieve
utilizing the human resources in local
organizational and achieve competitive
countries.
advantage over at national and
international level.
Domestic HRM is all about work within
IHRM operates beyond national borders.
the local, or national borders. It
2 It is based on the global laws prevailing
involves only the local laws of the
across the world.
nation.
This process is less complicated due
This process is a little more complicated
to less influence of external
3 as it is affected by external factors and
environment and less cultural
multiple cultural influences.
influence.
 International Environment
An international business environment is
multidimensional environment which is inclusive of
various political risks, cultural differences, legal,
taxation, and exchange risks.
The factors of environment that not only
impact national business but the overall
economy of the country is international
environment.
It refers to the surroundings in which international
companies run their businesses and ensure that they meet
the policies of the nations in which they are operative for a
smoother operation.
In order to ensure that the operation in the international
environment is smooth, the organization should be able to
understand the culture and working of the nation. This is
possible through understanding the cultural model.
 Hofstede’s Cultural Dimensions
• Culture refers to as “the collective programming of the mind distinguishing the
members of one group or category of the people from others.”
• As developed by Professor Geert Hofstede, there are six dimensions of national
culture that can help in understanding the operations of various nations.
 Power Distance Index (PDI)
Power distance index refers to the degree to how society members accept the
distance of power and authority. It assess the inequality (more versus less)
among members of society. Additionally, it has a significant impact on
international business negotiation. The power distance index differs into high
power and low power distance index.

High
• Accept a hierarchical order in which
everybody has a place and which needs
no further justification.
• Autocratic leadership, where

PDI centralization is preferred.

• Mostly lower class people.

Low
• People strive to equalize the distribution
of power and demand justification for
inequalities of power.
• Democratic Leadership where

PDI decentralization is preferred.

• Mostly middle class people.
 Individualism Versus Collectivism
(IDV)
This factor is all about the strength of the ties that people have to others within
their community.
• A preference for a loosely-knit social
framework in which individuals are
expected to take care of only themselves
Individualis and their immediate family.
• This society has a faster pace of life,
m where people’s ultimate goal is self-
actualization.
• The task comes first and the context
communications are low.
• “I” is the focus and identity.

• A preference for a tightly-knit framework

in society in which individuals can expect
their relatives or members of a particular
in-group to look after them in exchange for
Collectivism unquestioning loyalty
• The society has lower pace of life, where
harmony in society is ultimate goal.
• Relationship comes first and context
communications are high.
• “We” is the focus and identity of people.
 Masculinity Versus Femininity (MAS)
The distribution of roles between men and women defines this factor of the
cultural dimensions. • As the name suggests, it is a preference in
society for achievements, heroism,
assertiveness and material rewards for
success.
Masculinit • The cultural difference between genders are
more rigid.
y • The society blames poverty on the laziness of
people, and focus is always on the salary
earnings.
• More illiteracy and less aid consumption on
poor.

• It stands for a preference for cooperation,

modesty, caring for the weak and quality of
life.
• The cultural difference between genders are
less rigid.
Femininity • The society believes poverty is because of
some bad luck and focus is more on leisure
and quality of life than salary only.
• More literacy and more aid consumption on
poor.
 Uncertainty Avoidance Index (UAI)
The Uncertainty Avoidance dimension expresses the degree to which the members of a
society feel comfortable with uncertainty and ambiguity. However, avoiding uncertainty is
not necessarily the same as avoiding risk. Hofstede argues that you may find people in
high-scoring countries who are prepared to engage in risky behavior, precisely because it
reduces ambiguities, or in order to avoid failure.
• Some countries believe in maintaining rigid

Strong
codes of belief and behaviour and are intolerant
of unorthodox behaviour and ideas.
• More stress and anxiety, as there is a need of

UAI
rules even if they are impractical or never
practiced.
• There is a feeling of different is dangerous and
people tend to stay in same job as long as they
ca so that uncertainty is avoided.

• Some societies maintain a more relaxed

attitude in which practice counts more than
principles.

Weak UAI • Less stress and anxiety, as people do not like

rules and believe some rules can be broken for
good. S
• There is a feeling of different is good and
curiosity to know about it exists. People can
easily switch jobs to try something new and
innovative.
 Long- Versus Short-Term Orientation
This dimension was originally described as "Pragmatic Versus Normative
(PRA)." It refers to the time horizon people in a society display.

• The societies that prefer to maintain a time-

honoured traditions and norms while viewing the
societal changes with suspicion are normative.
• The focus is on achieving quick results.
Short-Term • Smaller savings quote and funds available for
investments. Slow or no economically
development of poor countries.
• Happy with their own regulations and ways of
operation. They are more nationalist.

• The societies that prefer to take a more pragmatic

approach and encourage thrift and efforts in
modern education as a way to prepare for the
future.
• There is perseverance in achieving the results.
Long-Term • Larger saving quote and funds available for
investments. Fast economically development of
poor countries.
• Prefer learning from other countries and adopting
new styles. They are more modernistic and open
for internationalization.
 Indulgence Versus Restraint (IVR)
The cultural dimension that was only added in the 21 st century and stands for culture
that allows people to enjoy or suppress gratification.

• A society that allows relatively free

gratification of basic and natural
Indulgenc human drives related to enjoying life
and having fun.

e • Societies have leisure ethic and is

optimistic.
• There are less moral disciplines and
more extroverted people.
• Higher crime rates but smaller police
forces.
• A society that suppresses gratification
of needs and regulates it by means of
strict social norms.
Restraint • Societies have work ethic and is
pessimistic.
• There are strict moral disciplines and
more introverted people.
• Lower crime rates but larger police
forces.
 Challenges of International Environment

Geo-
politics
and Cross-
Risk of
Culture Country
Supply
Variations Relations
Chain
Talent
Currency
Acquisitio
and
n and
Inflation
Onboardin
Rates
g Policies

Language Complianc
Issues e

Managing New
Globally Challenge Market
Distribute s Competiti
d Teams on
Impact of Internationalization on HRM

Navigating the
Attracting and business and Handling the
integrating people employees through shortage of top
from across the local customs and talent due to global
world laws along with competition
international ones

Meeting global
social
Managing a
responsibility
diversified work
requirements while
staff
maintaining the
national ones
 International HRM Policies for a
New Market
Fostering Global Collaboration
Since the firms are moving to the international markets, the HRM has to deal with controlling health care
costs, reducing employee attrition and participating in the community. The HR department has to foster global
collaboration by preparing employees for new opportunity with every task.

Working with Managers

As companies become more global, human resource professionals act as business partners to interview and
orient new employees to the workplace. A complex business operation typically requires specialized
personnel, so human resource professionals must work cooperatively with managers on the production lines.

Building and Managing Teams

Human resource professionals who support international business operations typically must ensure that
diverse teams work well together. In some countries individual recognition plays a larger role than others,
human resource professionals can create awareness about how teams can function effectively across borders
to maintain company profitability.

Providing Ongoing Training

Human resource professionals working for multinational companies can maintain a productive environment by
ensuring that an internationally diverse employee pool has the skills and knowledge to work together. hey
make arrangements for training courses that enable employees to get the proper credentials for performing
their function. This also ensures that companies adhere to all government regulations.
Assignment Discussion