Before we can begin to explore International Human Resource Management
(IHRM), we have to begin with HRM.
The purpose of human resource management (HRM) is to enable appropriate
deployment of human resource so that the quality culture can maintain and satisfy
the customers not only in national level but to in global level.
In one word we can say, IHRM the managing and requiting people in an
In details, IHRM is the process of managing people across international
boundaries by Multinational Corporation. It involves the worldwide
management of people not just the management of expatriates
The IHRM issue and problems arising from the internationalization of
business, and the IHRM strategies, policies and practices which firms
pursue in response to the internationalization of business.
Dimension Model of IHRM
• -allocation and
Types of Countries
• -Home Country
• -Host Country
• -Other Countries
Types of employee
• Parent Country Nationals(PCNs)
• Host Country Nationals(HCNs)
• Third Country Nationals(TCNs)
Expatriate vs Immigrant
The word expatriate comes from the Latin terms ex ("out of") and patria
The term is often used in the context of professionals or skilled workers sent
abroad by their companies.
Skilled professionals working in another country are described as expatriates,
whereas a manual laborer who has moved to another country to earn
money might be labeled an 'immigrant' or 'migrant worker'.
Major Issues in International Human Resource Management
There are three main Issues in IHRM. These are:
1. The management and development of :
Selection of expatriates
Since most expatriates work under minimal supervision in a distant location, mistakes in
selection are likely to go unnoticed until it is too late. To choose the best employee
for the job, management should:
emphasize cultural sensitivity as a selection criterion
establish a selection board of expatriates
required previous international experience
screen candidates’ spouses and families
Expatriates are more successful when their organizations train them to prepare for their
life and work abroad. Lack of training is a major cause of expatriate failure.
The most important aspect of expatriate training is cross-cultural training (CCT). Such
training prepares an expatriate to live and work in a different culture.
career blockage, culture shock, lack of cross-cultural training, an overemphasis on
technical qualifications, a tendency to use international assignments as a way to get
rid of problem employees, and family problems.
2. The internationalization of management throughout the organization (host
country, parent country and other third countries).
3. The need to internationalize the whole organization by creating a new
corporate culture reflecting the need for greater international experiences
across the whole organization.
Types of Staffing Policy
1. The Ethnocentric Approach
• An ethnocentric approach to staffing policy is one in which key
management positions in an international business are filled by parent-
• Headquarters from the home country makes key decisions, employees
from the home country hold important jobs, and the subsidiaries follow
the home country resource management practice.
• This is good strategy at early stage of new start up/operations in host
Ethnocentric staffing policy
• An ethnocentric staffing policy is attractive when
– Lack of qualified individuals in the host country .
– Best way to maintain a unified corporate culture
– Transfer knowledge of core competencies to the foreign operation
– Familiarity with headquarters goals and objectives
– More organizational control and coordination
– Competent managers are giving expatriate opportunity
• This policy is falling out of favor because
– Difficulty in adjustment
– It can lead to cultural myopia
– Higher cost
2. The Polycentric Approach
• A polycentric staffing policy is one in which host country nationals are
recruited to manage subsidiaries in their own country, while parent
country nationals occupy the key positions at corporate headquarters.
• Each subsidiary manages on a local basis.
• Some countries have made regulation or exert pressure to hire host
country nationals for top position in subsidiary
Types of Staffing Policy
The Polycentric Approach
• The advantages of the polycentric policy are that
– the firm is less likely to suffer from cultural myopia
– it may be less expensive to implement
• The disadvantages of the polycentric policy are that
– host country nationals have few opportunities to gain foreign
experience and so cannot progress beyond senior positions in their
– Isolate headquarters from foreign subsidiaries
3. The Geocentric Approach
• A geocentric staffing policy is one in which the best people are
sought for key jobs throughout the organization, regardless of
• The geocentric firm combines global corporate strategy
• Interdependence between centre and subsidiaries.
Types of Staffing Policy
• The advantages of a geocentric approach to staffing are that it
– enables the firm to make the best use of its human resources
– builds a cadre of international executives who feel at home working in
a number of different cultures
• The disadvantages of geocentric approach include
– difficulties with immigration laws
– costs associated with implementing the strategy
Availability of useful human resources
Economic Justification / cost effectiveness
Employee motivation and performance
Global exposure for need of the organization
Development of Cross cultural Management
Purpose of IHRM
Flexible and adaptive
Capable to transforming learning across their globally dispersed units
Role of International Human
IHRM department deals with heterogeneous functions and has
to give additional focus on various aspects, such as:
Deals with different Groups of employees
Manage external influences
IHRM operates beyond national borders while domestic HRMs operate within the
In an IHRM, there’s constant change for a broader set of perspectives.
There are more risks involved in IHRM than in the domestic HRM.
More Hr Activities
Management is basically the principle based on local cultures,
traditions, practices and needs of the organizational growth.
HRM methods and systems developed by one society
HRM and industrial relations practices differ across countries
as these have their historic origin in countries.
Personnel management and industrial relations
In above decision, we can say that international
human resource management play an important role
in Multinational Corporation (MNCs) .
International human resource management is a
contested field of study with many competing