International Human Resource Management

Managing people in a multinational context

Chapter Objectives
We focus on the ‘managing the people’ aspect of IHRM:
• Issues relating to staffing foreign operations
• The reasons for using international assignments:
filling positions and developing managers and organizations.
• Various types of international assignments:
short term, extended and longer term;
• Various non-standard arrangements:
commuter, rotator, contractual and virtual
• The role of expatriates and non-expatriates in supporting
international business activities
• Return on investment of international assignments
• The role of the corporate HR function in MNEs

IHRM Chapter 4 2
Table
4-1a
The advantages and disadvantages of using PCNs

IHRM Chapter 4 3
Table
4-1b
The advantages and disadvantages of using TCNs

IHRM Chapter 4 4
Table
4-1c
The advantages and disadvantages of using HCNs

IHRM Chapter 4 5
 Staffing Choices
Ethnocentric Management
Where the home country management style is imposed on the host country. The assumption is
that what works at home should also work overseas. This style of management is not well suited
or applicable to the global world today. The management team has to diversify and adjust in
being flexible to accommodate the host country’s culture and employees’ norms and social
relation in the workplace.
Polycentric Management
The foreign market is too hard to understand so host-country managers are relatively free to
manage their own way. Competition is focused on a market-by-market basis. This type of
management style is used by such franchises as McDonald’s, Domino’s Pizza, Kentucky Fried
Chicken, Pizza Hut, and Burger King.
Regiocentric Management
The style most parent organizations use when they feel that the regional insiders best
coordinate operations within the region. The assumption is that the regional workers know their
market better than others. Similarly, these employees can serve an entire region for economies
of scale purposes instead of having many representatives in various countries.
Geocentric Management
A highly interdependent system that speaks in terms of the global village. The focus is at once
both worldwide and on local objectives. Some franchises operate based on the geocentric
management orientation. They focus on being a worldwide business first and then they
regionalize in groups.
IHRM Chapter 4 6
Figure
4-1
Determinants of staffing choices

IHRM Chapter 4 7
Reasons for International Assignments
1. Position filling
2. Management development
3. Organization development

IHRM Chapter 4 8
Types of international assignments
• Short term up to 3 months
• Extended up to 1 year
• Long term (traditional expatriate assignment)
1 to 5 years
Some non-standard assignments:
• Commuter go home every one to two weeks
• Rotational commute for set period followed by
break in home country
• Contractual specific skills employees hired for
6 to 12 months on specific projects
• Virtual employee manages international
responsibilities from home country base
IHRM Chapter 4 9
Table Differences between
4-2 traditional and short-term assignments

IHRM Chapter 4 10
Figure
4-2
The roles of an expatriate

IHRM Chapter 4 11
Figure
4-3
ROI indicators for calculating international assignments

IHRM Chapter 4 12
4-steps to calculate expatriate ROI
1. Identify financial and non-financial costs and
benefits.
2. Link the costs and benefits to the purpose of
the long-term assignment.
3. Identify the appropriate antecedents (prior
events) from a system’s perspective.
4. Conduct the calculation at an appropriate time
within the context of the assignment’s purpose.

IHRM Chapter 4 13
Table Various roles of corporate HR
4-3

IHRM Chapter 4 14