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Unit 16: International HRM

enable the firm, the multinational corporations (MNCs), to be successful globally. Some Notes
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.
 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.
 Due to global business alignment, it has now become imperative to develop organisational
culture with some unique characteristics. Culture is country specific belief, values and
norms of a social group shared by its members and distinct from other social groups
(Lytle, Brett, and Shapiro 1999). Culture concerns economic, political, social structure,
religion, education, and language. Ruben (1983) defines culture as "... the extent that
members of a social system share particular symbols, meanings, images, rule structures,
habits, values, and information processing and transformational patterns they can be said
to share a common culture." Hofstede (1980) reinforces this image of the group by stating,
"the essence of culture is the collective programming of the mind." This dynamic of sharing
as a central element to culture is well supported by many experts.
 Expatriate employees that are unprepared to meet the challenges in a foreign country
often fail their mission and this is costly to any organization. Therefore, it is imperative to
adequately train expatriates to perform well in oversees assignments; not only does this
draw benefits to the company, it also helps the morale of the employees.

16.5 Keywords

Cultural Diversity: Cultural diversity is having different cultures respect each other's differences.
Culture: Culture is defined as an extent that members of a social system share particular symbols,
meanings, images, rule structures, habits, values, and information processing.
Domestic HRM: Domestic HRM is involved with employees within only one national boundary.
Expatriate: Person who live in one country and are employed by an organization based in
another country, also called international assignees.
HCNs: Host-country nationals.
IHRM: International human resource management.
International Human Resource Management: It is about the worldwide management of human
resources. 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.
MNCs: Multinational Corporations.

PCNs: Parent Country Nationals
TCNs: Third Country Nationals.

16.6 Review Questions

1. Define IHRM.

2. Explain why IHRM is important for the organisations?

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