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LECTURE BY:
MISS HAREEM SIDDIQUI
FOR MHRM (Final)
OBJECTIVES OF CHAPTER
 After studying this chapter, you will be enable to
understand:
International HRM
Need for IHRM
Approaches of IHRM
Differences b/w Domestic HRM and IHRM
Variables that moderate these differences
INTRODUCTION TO IHRM 2
INTRODUCTION TO IHRM
 More and more firms are moving outside their
domestic borders into the dynamic world of
international business.
 Hence resulting into Globalization.
INTRODUCTION TO IHRM 3
GLOBALIZATION
 Tendency of firms to extend their sales, ownership
and/ or manufacturing to new markets abroad.
 A process by which regional economies, societies and
culture become integrated through a global network of
communication, transportation and trade.
INTRODUCTION TO IHRM 4
REASONS FOR GLOBALIZATION
 Expand business
 Cut labor costs
 Forming partners
 Strengthening economy
 Be more productive
INTRODUCTION TO IHRM 5
NEED FOR IHRM
 As a result of Globalization or Internationalization of
firms, it has become critically important for
organizations to find and nurture the Human
resources required to implement a global strategy
successfully.
 That’s why effective HRM is essential for this purpose.
INTRODUCTION TO IHRM 6
APPROACHES TO DEFINE IHRM
 IHRM is characterized by 3 broad approaches:
Cross cultural management
Comparative industrial relations
HRM in Multinational firms
INTRODUCTION TO IHRM 7
IHRM FROM THE PERSPECTIVE OF
MNC
 IHRM is basically an interplay among 3 dimensions:
HR activities
Types of employees
Countries of operations
INTRODUCTION TO IHRM 8
IHRM
HR ACTIVITIES
 3 Broad HR activities include:
a) Procurement
b) Allocation
c) Utilization
INTRODUCTION TO IHRM 9
IHRM
COUNTRIES OF OPERATION:
a) Parent/ Home country where the firm is head
quartered.
b) Host country where the firm’s subsidiaries are
located.
c) Third country where the firm is neither
headquartered nor subsidiaries are located. May be
used as a source of labor.
INTRODUCTION TO IHRM 10
IHRM
TYPES OF EMPLOYEES:
a) Host Country Nationals (HCNs)
b) Parent Country Nationals (PCNs)
c) Third Country Nationals (TCNs)
d) Expatriates
INTRODUCTION TO IHRM 11
EXPATRIATE
 An employee who is working and temporarily residing
in a foreign country. OR
 Employees who are transferred out of their home base
into some other area of firm’s international operations
for the sake of completing a particular assignment.
 Also called as International assignees.
INTRODUCTION TO IHRM 12
DIFFERENCES B/W DOMESTIC &
IHRM
 Differences can be attributed to 6 factors:
1. More HR activities
2. Need for a broader perspective
3. More involvement in employees’ personal lives
4. Changes in emphasis as the workforce mix of
expatriates and locals varies.
5. Risk exposure
6. More external influences
INTRODUCTION TO IHRM 13
1.MORE HR ACTIVITIES
 International Taxation
 International Relocation and orientation
 Administrative services for expatriates
 Host government relationships
 Language translation services
INTRODUCTION TO IHRM 14
2. NEED FOR BROADER
PERSPECTIVE
 IHR managers have to design and administer programs
for more than one national group of employees. So
they have to take broader view of issues.
INTRODUCTION TO IHRM 15
3. MORE INVOLVEMENT IN
EMPLOYEES’ PERSONAL LIVES
 Helping expatriates and their families in:
Housing arrangements
Adjusting with new culture
Health care
Cost of living
Compensation details
Schooling arrangements, etc.
INTRODUCTION TO IHRM 16
4. CHANGES IN EMPHASIS OF
WORKFORCE
 As the firm hires different category of employees like
HCNs, PCNs, etc, the emphasis on the HR activities
also change.
INTRODUCTION TO IHRM 17
5. RISK EXPOSURE
 More risk involved in IHRM.
Human and financial failure
Expatriate failure
Terrorism
INTRODUCTION TO IHRM 18
6. MORE EXTERNAL INFLUENCES
 Type of government
 state of economy
 General practices of doing business of the host
country
INTRODUCTION TO IHRM 19
VARIABLES THAT MODERATE
DIFFERENCES
 Complexities involved in operating in different
countries.
 The cultural environment
 The industry type
 Reliance of the MNC on its home country domestic
market
 Attitude of senior management.
INTRODUCTION TO IHRM 20

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Introduction to IHRM

  • 1. LECTURE BY: MISS HAREEM SIDDIQUI FOR MHRM (Final)
  • 2. OBJECTIVES OF CHAPTER  After studying this chapter, you will be enable to understand: International HRM Need for IHRM Approaches of IHRM Differences b/w Domestic HRM and IHRM Variables that moderate these differences INTRODUCTION TO IHRM 2
  • 3. INTRODUCTION TO IHRM  More and more firms are moving outside their domestic borders into the dynamic world of international business.  Hence resulting into Globalization. INTRODUCTION TO IHRM 3
  • 4. GLOBALIZATION  Tendency of firms to extend their sales, ownership and/ or manufacturing to new markets abroad.  A process by which regional economies, societies and culture become integrated through a global network of communication, transportation and trade. INTRODUCTION TO IHRM 4
  • 5. REASONS FOR GLOBALIZATION  Expand business  Cut labor costs  Forming partners  Strengthening economy  Be more productive INTRODUCTION TO IHRM 5
  • 6. NEED FOR IHRM  As a result of Globalization or Internationalization of firms, it has become critically important for organizations to find and nurture the Human resources required to implement a global strategy successfully.  That’s why effective HRM is essential for this purpose. INTRODUCTION TO IHRM 6
  • 7. APPROACHES TO DEFINE IHRM  IHRM is characterized by 3 broad approaches: Cross cultural management Comparative industrial relations HRM in Multinational firms INTRODUCTION TO IHRM 7
  • 8. IHRM FROM THE PERSPECTIVE OF MNC  IHRM is basically an interplay among 3 dimensions: HR activities Types of employees Countries of operations INTRODUCTION TO IHRM 8
  • 9. IHRM HR ACTIVITIES  3 Broad HR activities include: a) Procurement b) Allocation c) Utilization INTRODUCTION TO IHRM 9
  • 10. IHRM COUNTRIES OF OPERATION: a) Parent/ Home country where the firm is head quartered. b) Host country where the firm’s subsidiaries are located. c) Third country where the firm is neither headquartered nor subsidiaries are located. May be used as a source of labor. INTRODUCTION TO IHRM 10
  • 11. IHRM TYPES OF EMPLOYEES: a) Host Country Nationals (HCNs) b) Parent Country Nationals (PCNs) c) Third Country Nationals (TCNs) d) Expatriates INTRODUCTION TO IHRM 11
  • 12. EXPATRIATE  An employee who is working and temporarily residing in a foreign country. OR  Employees who are transferred out of their home base into some other area of firm’s international operations for the sake of completing a particular assignment.  Also called as International assignees. INTRODUCTION TO IHRM 12
  • 13. DIFFERENCES B/W DOMESTIC & IHRM  Differences can be attributed to 6 factors: 1. More HR activities 2. Need for a broader perspective 3. More involvement in employees’ personal lives 4. Changes in emphasis as the workforce mix of expatriates and locals varies. 5. Risk exposure 6. More external influences INTRODUCTION TO IHRM 13
  • 14. 1.MORE HR ACTIVITIES  International Taxation  International Relocation and orientation  Administrative services for expatriates  Host government relationships  Language translation services INTRODUCTION TO IHRM 14
  • 15. 2. NEED FOR BROADER PERSPECTIVE  IHR managers have to design and administer programs for more than one national group of employees. So they have to take broader view of issues. INTRODUCTION TO IHRM 15
  • 16. 3. MORE INVOLVEMENT IN EMPLOYEES’ PERSONAL LIVES  Helping expatriates and their families in: Housing arrangements Adjusting with new culture Health care Cost of living Compensation details Schooling arrangements, etc. INTRODUCTION TO IHRM 16
  • 17. 4. CHANGES IN EMPHASIS OF WORKFORCE  As the firm hires different category of employees like HCNs, PCNs, etc, the emphasis on the HR activities also change. INTRODUCTION TO IHRM 17
  • 18. 5. RISK EXPOSURE  More risk involved in IHRM. Human and financial failure Expatriate failure Terrorism INTRODUCTION TO IHRM 18
  • 19. 6. MORE EXTERNAL INFLUENCES  Type of government  state of economy  General practices of doing business of the host country INTRODUCTION TO IHRM 19
  • 20. VARIABLES THAT MODERATE DIFFERENCES  Complexities involved in operating in different countries.  The cultural environment  The industry type  Reliance of the MNC on its home country domestic market  Attitude of senior management. INTRODUCTION TO IHRM 20