Page 278 - DMGT406_HUMAN_RESOURCE_MANAGEMENT

Unit 16: International HRM

16.1 Domestic HRM and IHRM Compared Notes

There are some commonalities in IHRM and domestic HRM practices, particularly in areas like;
HR planning and staffing, recruitment and selection, appraisal and development, rewards, etc.
The main distinction, however, lies in the fact that while domestic HRM is involved with
employees within only one national boundary. IHRM deals with three national or country
categories, i.e., the parent country where the firm is actually originated and headquartered; the
host country where the subsidiary is located; and other countries from where the organisation
may source the labour, finance or research and development. This is because there are three
types of employees in an international organization, i.e., parent-country nationals (PCNs);
host-country nationals (HCNs); and third-country nationals (TCNs). There are two major factors
therefore which differentiate domestic HRM from IHRM. First, the complexities of operating in
different countries (and therefore in different cultures), and secondly, employing different national
categories of workers. This suggests that international HRM is concerned with identifying and
understanding how MNCs manage their geographically dispersed workforces in order to
leverage their HR resources for both local and global competitive advantage (Schuler et al.,
2002). Globalisation has brought new challenges and increased complexity such as the challenge
of managing newer forms of network organization. In recognition of such developments, new
requirements of IHRM is to play a key role in achieving a balance between the need for control
and coordination of foreign subsidiaries, and the need to adapt to local environments.

Self Assessment

Fill in the blanks:
7. The ........................... attitude assumes that local managers in host countries know best how
to run their own operations.
8. ........................... is an entry strategy in which a firm maintains its production facilities
within its home country and transfers its products for sale in foreign markets.
9. The process of bringing expatriates home is called ........................... .
10. ........................... is the systematic analysis of job requirements.

16.2 Managing International HR Activities

The HR activities included here relate to, are associated with, and impact the organisational
level and the individual/group level human resource issues indicated above. These include
policies and practices associated with:

1. Environmental analysis
2. Organisational structure, design, strategy, values, mission and culture
3. Human resource planning
4. Job design and job analysis
5. Recruitment, selection and orientation
6. Training, socialisation and assimilation
7. Performance and career management
8. Remuneration (compensation)
9. Employee welfare

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