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Hitesh Jhanji, Lovely Professional University Unit 16: International HRM

Unit 16: International HRM Notes

CONTENTS
Objectives
Introduction

16.1 Domestic HRM and IHRM Compared
16.2 Managing International HR Activities
16.3 Cultural Diversity and the Expatriate Problem

16.4 Summary
16.5 Keywords
16.6 Review Questions
16.7 Further Readings

Objectives

After studying this unit, you will be able to:

 Define the term International HRM
 Compare Domestic HRM and IHRM

 Explain the concept of Managing international HR activities
 Realize Cultural Diversity & the Expatriate Problem
Introduction

International human resource management (IHRM) is about the worldwide management of
human resources. The purpose of international human resources management is to enable the
firm, the multinational corporations (MNCs), to be successful globally. Some of the important
objectives of IHRM are; (a) remaining competitive throughout the world; (b) efficient; (c) locally
responsive; (d) flexible and adaptable and (e) capable of transferring learning across their globally
dispersed units.

Did u know? For many organisations, IHRM is the most important critical success factor.
IHRM requires a much broader perspective even for the most common HR activities.
Even when dealing with one particular HR function area such as compensation, the
international HR manager is faced with a great variety of national and international pay
issues. For example, while dealing with pay issues, the HQ-based HR manager must
coordinate pay systems in different countries with different currencies that may change in
relative value to one another over time. In the case of fringe benefits provided to host
company employees, some interesting complications might arise. A final aspect of the
broader scope of IHRM is that the HQ-based manager deals with employee groups that
have different cultural backgrounds. The HQ manager must coordinate policies and
procedures to manage expatriates from the firm's home country (parent country nationals,
PNCs), host-country nationals (HCNs), as well as third country nationals (TCNs, e.g. an

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