International Personnel Management

MHRDM V 2011-14 Session 1

Facilitated by Prof Tanvi Lathia K J Somaiya Institute of Management Studies and Research

Contents
Introduction and Overview Present International Context Concept of International HRM Challenges for IHRM Why Study IHRM Difference between IHRM and HRM Case Study Discussion

Introduction
International assignments expected to increase in 2013 Global induction Glocalization Obstacles to working overseas Companies fail to train managers for overseas assignments Outsourcing and leasing

Present Context

Globalization The trend toward opening up foreign markets to international trade and investment. Impact of Globalization Partnerships with foreign firms Communication and connectivity have made the world smaller There is a better understanding of foreign opportunities leading to increased trade and businesses operating across national borders Lower trade and tariff barriers (economies around the world are better integrated) NAFTA, EU, APEC trade agreements WTO and GATT Anything, anywhere, anytime markets

Present Context Containing Costs

Downsizing The planned elimination of jobs (head count). Outsourcing Contracting outside the organization to have work done that formerly was done by internal employees. Employee Leasing The process of dismissing employees who are then hired by a leasing company (which handles all HR-related activities) and contracting with that company to lease back the employees.

Present Context Convergence and Divergence

Convergence MNCs, food habits, fashion, travel, media Divergence Customer preferences, cultural orientation, religion, language

Going Global - Impact on HRM

Different cultures, laws, and business practices Issues:
Identifying capable expatriate managers. training programs suited for working in foreign culture and work practice. Adjusting compensation plans for overseas work.

Going Global - Impact on HRM

Attitudes Toward Work and Family Day care Flextime Job sharing Alternative work schedules Elder care Job rotation Parental leave Telecommuting

Functions of HRM
Based on a notion that people are a key resource, competitive advantage. Deals with personnel functions Has now assumed a strategic role

Concept of International HRM (IHRM)

IHRM is HRM issues, functions, policies, and practices that result from the strategic activities of multinational enterprises and that impact on the international concerns and goals of those enterprises (Schuler et al.,1993) Covers the entire gamut of HR operations in the international context

Concept of International HRM (IHRM)

Includes
Global careers Global communication Global business leadership Global compensation and benefits Global diversity Global training and development Global industrial relations Global safety and security Global talent management Global hiring Global induction Global ethics and sustainability

Challenges for IHRM

Coordinating various functions (planning, marketing, accounting, HR ) with the parent company and enabling the companys overall strategy Building a global culture to encourage global mindsets and attitudes to cope with global customers and global transactions Developing the managerial leadership and structure to support global strategies and operations Gaining management interest and involvement in HRM processes

Challenges for IHRM

Developing technical and managerial skills (talent) to work effectively at the global level Ensuring global and local approaches to T&D, succession planning, and improved performance Ensuring quality professionals to serve global customers

Why study IHRM?

To understand how to make HR effective in the MNCs Effective management of HRM internationally is increasingly being recognized as a major determinant of success or failure in international business Shortage of good international HR managers

Business failure in the international arena may often be linked to poor management of HR (Expatriate failure)
Work force multicultural and geographically dispersed

HR should support the rapid pace of internationalization of companies and enhance and maintain their competitiveness in the market place.

Difference between HRM and IHRM

More involvement in employees personal lives Types of employees Cross cultural sensitivity Labor relations and employment laws of different countries Compensation and taxation norms High risk exposure (medical, health, terrorism) Different government policies and norms

A Model of IHRM

HR Activities

Procure

Allocate

Utilize

Host Country Nationals (HCNs)

Parent Country Nationals (PCNs) Third Country Nationals (TCNs) Type of employees