International human resource management (IHRM) involves managing a multinational corporation's employees across different countries. There are three types of employees: host country nationals (HCNs) who are citizens of the country where operations occur; parent country nationals (PCNs) who are sent on assignment from the home country; and third country nationals (TCNs) from neither the home or host countries. Companies typically progress through four IHRM strategies - starting with an ethnocentric approach that favors PCNs, then a polycentric approach using more HCNs, followed by a geocentric strategy choosing the best employees globally. Finally, some adopt a regiocentric strategy managing regions rather than the

1. INTERNATIONAL
HRM

2. DEFINING IHRM

3.  The IHRM may be defined as the interplay between the
three important dimensions of human resource
management- types of employees, human resource
activities and the country of operation.
 IHRM is the process of procuring, allocating and
effectively utilizing human resources in a multinational
corporations

4. UNDERSTANDING A FEW TERMS
 Type of Employees in Multi National Companies
HCN, PCN, and TCN
 HCN (Host Country National)
IBM employs Indian Citizens in Indian Operations
 PCN (Parent Country National)
IBM sends US citizen to India on assignment
 TCN (Third Country National)
IBM sends Singaporean employee on assignment to

5. IHRM STRATEGIES
Ethnocentric Approach
 Staffing the key positions with PCNs
 Generally common at the initial stage of internationalization
 Lack of qualified HCNs
 Limits the opportunities for HCNs and hence more turn over
 Compensation variation between PCN and HCN and hence low
morale of HCNs
Polycentric Approach
 HCNs are recruited to manage subsidiaries in their own countries
and PCN in corporate HQs
 Avoids adjustment problems of expatriate
 Employment of HCN is less expensive
 Some of the disadvantages of Ethnocentric are overcome

6. Geocentric Approach
 Utilisation of best people for the key jobs throughout the
organisation regardless of nationality
 Availability of competent persons throughout the organisation
 Organisations able to deliver high performance
Regiocentric Approach
 Modification of Geocentric approach
 Staffing is on regional approach
 It helps the organisations to move from ethno/polycentric to
geocentric
 Opportunities are limited to regional level only

7. Stages of Moving Towards
Global Business
Network Subsidiary
Foreign Production
Sale Subsidiary
Exporting
Licensing
Subcontracting

8. Path to Global Status
Exporting
 Exporting is Initial stage.
 Generally handled by intermediary.
 Appointing for a export manager-A PCN.
 Could be marketing department function.
 HR functions are similar to domestic HRM.
Sales Subsidiary
 Direct sales with establishment with branch offices in foreign market.
 Development of expertise, agents and distributors in foreign market.
 Strategy option PCN versus HCN
 HR activities depends on PCN or HCN

9. Path to Global Status
International Division
 Transition stage before establishing foreign production facility / JV with local
firm / Acquisition of local firm.
 Establishing Subsidiary in foreign country.
 Shift from PCN to HCN.
 Separate HR manager from HR function to look after expat management for the
same.
Global Production
 Firm’s growth leads to foreign production.
 Global competition , flow of information, technology.
 Adaptation of HRM activities for host countries.
 Results in balanced control/ Decentralization of strategic planning/formulating /
Implementing HR strategies.