A general view on IHRM

1. International HRMPriti Rose Kullu
Tenzin
Linkan Tanty
Roshini Fernando
Esthity

2. International HRM
• Simple definition is ‘the process of managing
people in international settings’.
• The HRM issues and problems arising from
the internationalization of business, and the
HRM strategies, policies and practices which
firms pursue in response to the
internationalization process
• IHRM is the management of HR in business
operations in at least two nations

3. IHRM & DOMESTIC HRM
IHRM
• Address a broad range of HRM
activities
• HR issues relate to employees
belonging to more than one
nationality
• Greater involvement of HR
manager in the personal life of
employees
• Greater exposure to risks in
International assignments
• Has to manage several
external factors such as
government regulations of
foreign country
Domestic HRM
• Address a narrow range of
HRM activities
• HR issues relate to
employees belonging to
single nationality
• Limited involvement of HR
manager in the personal life
of employees
• Limited risks in domestic
assignments
• Limited external factors to
deal with.

4. Model Of IHRM

5. Types Of Employees
MNCs can be staffed using three different
sources
a) Home country or Parent Country National
(PCN)
b)Host Country Nationals (HCN)
c)Third Country Nationals (TCN)

6. • PCN
Employees of an organization who are citizens of
the country in which the headquarters of the
company is located
• HCN
Employees of an organization who are the
citizens of the country in which the foreign
subsidiary is located
• TCN
Employees of an organization who are the
citizens of the country other than the country
where the organization is head quarterd and the
country that is hosting the subsidiary

7. Staffing Policies
• Staffing policy
– Selecting individuals with requisite skills to do a
particular job
– Tool for developing and promoting corporate culture
– View People as Resource
• Types of Staffing Policy
– Ethnocentric
– Polycentric
– Geocentric
– Regiocentric

8. Ethnocentric policy
Key management positions filled by parent-country
nationals
• Advantages:
– Overcomes lack of qualified managers in host nation
– Unified culture
– Helps transfer core competencies (and skills back)
• Disadvantages:
– Produces resentment in host country
– Can lead to cultural myopia

9. Polycentric policy
• Host-country nationals manage subsidiaries
• Parent company nationals hold key headquarter positions
• Best suited to multi-domestic businesses
Advantages:
– Alleviates cultural myopia.
– Inexpensive to implement
– Helps transfer core competencies
Disadvantages:
– Limits opportunity to gain experience of host-country nationals
outside their own country.
– Can create gap between home-and host-country operations

10. Geocentric policy
Seek best people, regardless of nationality
Best suited to Global and trans-national businesses
Advantages:
– Enables the firm to make best use of its human resources
– Equips executives to work in a number of cultures
– Helps build strong unifying culture and informal
management network
Disadvantages:
– National immigration policies may limit implementation
– Expensive to implement due to training and relocation
– Compensation structure can be a problem.

11. Regiocentric Policy
• Variation of staffing policy to suit particular
geographic areas
• Provides a “stepping stone” for a firm wishing
to move from an ethocentric or polycentic
approach to a geocentric approach.

12. Training and management
development
Training: Obtaining skills for a particular foreign
posting
– Cultural training : Seeks to foster an appreciation
of the host-country’s culture
– Language training : Can improve expatriate’s
effectiveness, aids in relating more easily to
foreign culture and fosters a better firm image
– Practical training: Ease into day-to-day life of the
host country

13. Management development
Development: Broader concept involving
developing manager’s skills over his or her
career with the firm
– Several foreign postings over a number of years
– Attend management education programs at
regular intervals

14. External environment & IHRM
• Political Environment (predominately faced by the
organization)
• Cultural Environment (faced by the employee)
Thus resulting in EXPATRIATE FALIURE .
EXPATRIATE:
• Premature return of expatriates to their home
country.

15. Expatriate Failure
EXPATRIATE:
Premature return of expatriates to their home country
Reasons:
• Inability to adjust to the host country culture- Cultural Shock
• Personal and emotional problems
• Difficulties with environment
• Inability to cope up with larger international responsibilities
• Other family reasons

17. Conclusion
As the world becomes boundary less, the ability
to work in a cross cultural environment
becomes a valuable asset for any executive.
Understanding, managing, and even exploiting
these cultural differences could well spell
the difference between success and
failure in several business situations.