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  1. 1. Assignment by Siddhanth Nair - 590040997 BEMM 121 - People and Organizations. To what extent does international HRM represent a distinct approach to people management? “Having the right people on the bus” (Jim Collins), business concept coined by Collins depicts that an organization needs to employ the right people to achieve success, therefore it is necessary for or- ganizations to manage their people (employees) effectively. People Management involves effective control and use of manpower planning, hiring and training employees. It includes functions like job analysis, staffing, orientation etc. Personnel Management takes employees as people whereas Hu- man Resource Management (HRM) takes employees as a resource. People management is an ad- ministrative function involving activities like payroll. Human Resource Management on the other hand is a managerial function and is much broader than people management, HRM is carried out to improve efficiency of employees. People management is reactive and independent function whereas HRM is proactive and an integral function. Human Resource Management (HRM) contains all activities and decisions that effect the relation- ship between employees (human resource) and Organization. Its activities are in sync with the strat- egy of the firm and helps the firm in achieving its goals efficiently and cogently. This can be done by either recruiting qualified employees or retaining the existing successful and hardworking ones and thus managing human resource adequately. Human Resource Management functions include staffing, development, compensation and benefits, safety and health and Relations management. But HRM was being practiced only on a domestic level what made it international and gave rise to International HRM, the key factors were Globalization, Factors moving freely, Foreign Direct In- vestment and liberalization of trade, access to wider markets and pressures to reduce cost. As local industries become big and needed access to bigger markets they become global industries thus peo- ple had to be managed as a resource globally rather than locally. International human resource management (IHRM) deals with the management of human resources in an international context on a world wide or global scale. It started out in the U.S. It facilitates multinational corporations to be a global success and helps them giving a competitive edge. Interna- tional human resource management helps the organization to be efficient as it works along with the business strategy and provides as a means to an end rather being an end itself. IHRM helps in creating a balance between local responsiveness and global integration. As it makes the organization more flexible and adaptable to changes in the environment. It helps in transferring knowledge but it can be costly and may take up a lot of time in implementing the International HRM policies. A model for International Human Resource Management has been stated by Schuler et al (1993), which states how different it is to manage human resources in global and domestic firms. HRM and IHRM are basically same when it comes to HR functions but different when it comes to complexities of operations, uncertainty factor and employment of employees/workers from differ- ent nationalities. According to Peter Dowling, the operations are complex as activities are done on a global level rather than the domestic level , so not only local responsiveness have to be kept in mind but also the global scenario. Employees are different in all the countries and have to managed ac-
  2. 2. cordingly. Amount of HR activities to be carried out also increased like taxation laws are different in all countries , so accordingly things had to be adjusted to benefit or to reduce costs. Employees also now had to go under orientation and development as they are becoming part of a multinational firm or they are being relocated so they have to undergo training to adapt themselves to the new place and environment both in the corporate and the social world. IHRM also includes different ex- penses that has to be undertaken for expatriates. Proper government relations also have to be main- tained as they expand their operations in new countries. The new culture should also be internalized by all employees and some training should also be provided to employees regarding knowledge about new languages. IHRM also requires more involvement in personal lives of employees as they are away from their origin country or working in a company which has a different country of origin. So proper care has to be taken about their health, various Insurances has to be provided, comfortable working space and living space is to be provided with proper attention given to employees family also. Recreation- al activities should also be provided to them and socialization should be encouraged as it helps em- ployees adjust and adapt to the new environment. IHRM involves more risk than HRM as it involves various direct and indirect costs plus includes risk of failure. IHRM also involves a extensive attitude toward employees and organization as em- ployees are from contrasted background and culture, so narrow mindedness will harm the growth of the organization. Moral and local issues should also be kept in mind along with Corporate Social Responsibility while practicing IHRM as it affects the long term augmentation of the organization and since it is a global company it should have philanthropic and a commendable image. Work ethics and other ethical issues should also be kept in mind like ethical relativism, absolutism and universalism. Employee morale also effect the working of an employee , morale developed into climate and the concept of climate into Organizational Culture. The culture in an organization con- sists of the beliefs, attitudes and mannerisms of the employees. So a global organization will have different culture than a domestic company. Moreover demeanor of the top management also is dif- ferent when it comes to domestic and global firms when it comes to the amount of information available to them, which is less in a global firm, or Cultural aloofness or caring only about their own ethnicity, or Inbound orientation. The top management perform their activities quite differently when it comes to global firms practicing IHRM because they decide the firm’s strategies, delegation of authority and responsibility and pay rates, promotions etc. So HRM and IHRM are different on various levels but basic functions are similar. Here are some recent news regarding IHRM, “ Changes to points-based system will help british workers get jobs, says Home Office.” - Lucy Phillips and “British jobs at Vauxhall are still under threat after yesterday’s buy-out of the company, according to the government.” To conclude, People form an integral part of an organization, managing them started from the in- dustrial revolution , it developed into treating people as a resource thus started Human Resource Management . It managed the relationships between organization and all its employees. As global- ization took place, trade liberalized organization became Multinational and thus HRM expanded and became International HRM as employees had to be managed on a worldwide scale. Activities of the IHRM became complex but were very important for the organizations as it help employees to be linked with strategic goals and made them flexible and adaptable according to changes in the en- vironment. Thus IHRM is quite a distinct approach from People Management but quite similar re- garding basic functions with HRM but more complex in nature.
  3. 3. References Anne-Wil Harzing and Joris Van Ruyssevedlt “International human resource management(second edition)” By Peter J. Dowling, Marion Festing, Allen D. Engle “Interna- tional human resource management: managing people in a multinational” By Hilary Harris, Chris Brewster, Paul Sparrow “International human resource manage- ment” Raymond cadwell “:A change of name or a change of identity” Birkbeck college, university of London,uk
  4. 4. Mahmoud Ezzamel, Simon Lilley, Adrian Wilkinson and Hugh Willmott, “Practices and prac- ticalities in human resource management” Manchester School of Management, UMlST Randall S. Schuler, Pawan S. budhwar, Gary W. Florkowski “International human resource management: review and critique” André Laurent “The cross-cultural puzzle of international human resource management”