HE GLOBALIZATION OF HUMAN RESOURCE MANAGEMEN

Muhammad Rifqi Arviansyah

120310140090
 CONTENT OVERVIEW

Internationalizati Internationalizati Strategic Evolving Conclusion

on of Business on of HRM Internation Internation
al HRM al HR
Function
 THE INTERNATIONAL OF BUSINESS
Pressures have created a new set of global realities for large and small enterprises

Rapid
Rapid and development and
extensive global transfer of
communication technology Free trade

Migration of large
numbers Search for new
market
THE INCREASING IMPORTANCE OF INTERNATIONAL BUSINESS

50 years ago US
economy hold 53%
Global GDP

Today only 28% of Global GDP.

(<20% in global PPP)
• FDI estimated
total US$ 9 trillion
• 65% coming from
and going to
developing
countries
 For example
that there are
in Germany
about 350
small to
medium-
sized firms
(SMEs with
fewer than
300
employees)
According to The that
dominate Hermann Simon‘s
Fortune Global their global
500, the 2006 list niche book 500 of the
(for the year markets. World’s Best
2005) included Unknown
firms from 229 Companies,
cities in thirty-two focused on
countries. (Just relatively little
three years earlier, known SMEs with
there were only worldwide market
twenty-five shares of 50
THE INTERNATIONAL OF BUSINESS PRACTICE
 THE INTERNATIONAL OF HRM

Aligning
Developing Core HR processes and activities with the new
requirements of competing globally, while
A global mind-set inside the HR function, simultaneously responding to local issues and
particularly awareness and understanding of requirements
the new global competitive environment and
the impact it has on the management of
people worldwide. The global HR challenge
consists of how to effectively attract, engage,
and retain the thousands of MNE employees Enhancing
in many different countries to achieve
strategic objectives, but also the role and
importance of globally mobile employees Global competencies and capabilities within
such as expatriates, inpatriates, and short- the HR function
term international assignees.
FORMS OF INTERNATIONAL OF HRM

Headquarters of
Domestic firms
multinational

Government
Home country
agencies and
subsidiaries of
non-
foreign-owned
governmental
enterprises
organizations
 DEVELOPMENT OF INTERNATIONAL HRM
Country selection. Which countries make the most sense for locating
international operations, and where will the firm be most likely able
to recruit and hire the kinds of employees it will need at a
competitive wage?
Global staffing. How many employees will need to be relocated to foreign
locations to start up the new operations and how many will be needed to run
them (will the necessary people be found locally in the host countries)?

Recruitment and selection. What will be required to find and recruit

the necessary talent to make the new international operations
successful?

Compensation. How will the firm compensate its new global work force, both
the international assignees from the home office as well as the new local
employees?

Standardization or adaptation. Will the firm want its HRM policies to be

uniform across all of its locations (standardization or global integration) or will
they be tailored to each location (adaptation or localization)?
DIFFERENCES INTERNATIONAL AND DOMESTIC HRM
More HR functions and activities

A broader expertise and perspective

More involvement in people’s lives

Managing a much wider mix of

employees

More external factors and influence

 STRATEGIC INTERNATIONAL HRM
Demand for global services from the HR function (for example, when the need for increased
numbers of expatriates arises to staff foreign operations). These HR activities may not be housed
within the essential core of the HR function—partially because many of these services can be
provided by consultants or through other forms of temporary assistance, and partially because
HR doesn‘t, at least initially, have the expertise and it must seek help outside the firm. The main role
of IHRM at the typical already established MNE is to support the global activities of the firm (and the
local HR functions) in the firm‘s foreign subsidiaries and other local operations.

HR activities may also vary by the type of industry.

In order to build, maintain, and develop their corporate identity, multinational organizations need
to strive for consistency in their ways of managing people on a worldwide basis. Yet, in order
to be effective locally, they also need to adapt specific cultural requirements of different
societies. While the global nature of the business may call for increased consistency, the variety of
cultural environments may be calling for differentiation
RESEARCH ON STRATEGIC INTERNATIONAL HRM
The existing research on SIHRM has found, as would be expected, that local culture and national
managerial orientation influences the nature of HR practice, that the degree of global mind-set
influences the nature of an MNE‘s global strategy, and that influences the degree of global focus in
the HR strategy.

In general, this research has dealt with some form of linkage between headquarters‘ (corporate)
international focus (for example, their degree of ethnocentrism or geocentrism) and HR policy and
practice in foreign subsidiaries
 THE EVOLVING INTERNATIONAL HR FUNCTION
Given the many HR problems that MNEs encounter in conducting business on a global scale, IHR is expected to carry out
the following agenda:
 Ensure IHR contribution as an integral partner in formulating the global strategy for the firm.

 Develop the necessary competency among senior IHR staff so that they can contribute as partners in the strategic
management of the global firm.

 Take the lead in developing processes and concepts with top management as they develop the global strategy: these
contributions might include developing capacities for environmental scanning about HR issues throughout the world
(particularly for the countries of existing or contemplated operations), for decision making (particularly related to
global HR concerns), and for the learning processes that the firm needs to adapt to new global requirements.

 Develop a framework to help top management fully understand the increasingly complex organizational structure and
people implications of globalization: that is, help management, individually and as a team, develop the necessary
global mindset to conduct successful global business.

 Facilitate the implementation of the global strategy by identifying key skills that will be required, assessing current
global competencies and creating strategies for developing the skills needed internally or locating them on the outside.

 Distribute and share the responsibilities for IHR: increasingly, IHR will become a shared responsibility, with line
management, IHR managers, and work teams all sharing in the objective of ensuring the effective hiring, development,
and deployment of the global firm‘s human resources, both at home and abroad.
 CONCLUSION

Because of rapidly developing global competition, firms are increasingly pressured to develop global
strategies, which leads to the internationalization of HR at all levels: headquarters, subsidiary, and
domestic, for profit and not for profit, private and public, commercial and government. The result is
that almost all HR has become IHR.

all HR professionals must master at least some aspects of internationalization in their jobs and
described how international HRM differs from purely ―domestic‖ HRM.

IHRM encompasses and reflects many international business and management characteristics such as
the determination of strategy and structure, which impacts the day-to-day operations of the core IHR
policies and practices related to global staffing, training and development, compensation, employee
relations, and health and safety.
THANK YOU