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Unit 1: Introduction to Global HRM

people and information among their subsidiaries and this demands a complex process of Notes
coordination and cooperation involving strong cross-unit integrating devices, a strong corporate
identity and a well developed worldwide management perspective. National cultural traits also
play a critical role in the conduct of business by influencing customer preferences and the
values, beliefs and behaviour of employees. Thus, culture affects both internal and external
perspectives of management, including the cost of doing business and its results. People play a
key role in any type of business activity but their role has become very critical in the new
economy and service sector.
Even those organisations who consider themselves immune to transactions across geographical
boundaries are connected to the wider network globally. They are in one way or the other
dependent upon organisations that may even not have heard about. There is interdependence
between organisations in various areas and functions.
The preliminary function of global Human Resource Management is that the organisation
carries a local appeal in the host country despite maintaining an international feel. All HRM
functions are carried out in a global context.

Example: Any multinational/international company would not like to be called as
local, however the same wants a domestic touch in the host country and there lies the challenge.

The field of Global Human Resource Management has been characterised by three broad
approaches.
1. Firstly, it emphasises cross-cultural management approach and examining human
behaviour within organisations from an international perspective.
2. Secondly, a comparative industrial relations and HRM literature seeks to describe compare
and analyse HRM systems in various countries.
3. Thirdly, to focus on aspects of HRM in multinational firms.

1.1.1 Objectives of Global HRM

We may therefore, enumerate the objectives of global HRM as follows:
1. Create a local appeal without compromising upon the global identity.

2. Generating awareness of cross cultural sensitivities among managers globally and hiring
of staff across geographic boundaries.
3. Training upon cultures and sensitivities of the host country.

Did u know?
1. Licensing – a technique of market entry wherein the firm do not bear the costs and
risks of entering into the foreign market on its own but generate revenue from the
royalties after the transfer of technological know-how.
2. Joint venture – a cooperative agreement between two firms to enter into a new
market jointly.

3. The wholly-owned subsidiary – A subsidiary whose parent companies owns
percentage of its common stock.
The strategic role of Human resources Management in such a scenario is to ensure that HRM
policies are in tandem with and in support of the firm’s strategy, structure and controls.

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