Professional Documents
Culture Documents
Ihrm Module 1
Ihrm Module 1
Introduction to IHRM
Definition, reasons for going global Approaches to IHRM Difference between IHRM and Domestic HRM Reasons for emergence of IHRM Models of IHRM-Matching model, Harvard Model, Contextual Model, 5P Model European Model. Models of SHRM in Multinational Companies Internationalization of HRM: Socio-cultural context, Organizational dynamics and IHRM: Role of culture in International HRM Culture and employee management issues Organizational Processes in IHRM Linking HR to International expansion strategies The Challenges of International Human Resource Management
The Imperative
The first Industrial Revolution of the mid 18th century The second Industrial Revolution telecommunication and information technology Lowering & breaking down of trade barriers
Global Communications
Globalizati on Forces
Types of Organizations
Global corporation
Firm that has integrated worldwide operations through a centralized home office.
Transnational corporation
Firm that attempts to balance local responsiveness and global scale via a network of specialized operating units.
Definition of IHRM
Morgan IHRM as the interplay among these three factors HR activities, types of employees & countries of operation.
Morgans Model
Types of employees
Within and cross-cultural workforce diversity Coordination Communication Procurement Allocation Utilization of human resources
Emergence of stronger & more powerful MNCs Above has been due to a rapid increase in global activity & competition Effective management of HR globally is fast emerging as a critical success factor for international business. Research evidence shows that
Shortage of international managers is becoming an increasing problem The successful implementation of global strategies depends on the existence of an adequate supply of internationally experienced managers Business failures in the international arena may often be linked to poor mgmt of HR Expatriate failure continues to be a significant problem for many international firms
Global Competition
Approaches to IHRM
Make strategic decision as to level of standardization desired across locations
Ethnocentric approach
Exporting organizations home country practices and policies to foreign locations Allowing each location to develop own practices and policies Developing standardized practices and policies by geographic region Developing one set of global practices and policies applied at all locations
Polycentric approach
Regiocentric approach
Geocentric approach
More HR activities The need for a broader perspective More involvement in employees personal lives Changes in emphasis as the workforce mix of expatriates & locals varies Risk exposure Broader external influences
More HR Activities
Broader Perspective
Design & administer policies for more than one group of employees; often deal with complex equity issues as in many multinationals there is a tendency to extent preferential treatment to PCN expatriates and not to HCNs and PCNs
In international movements much greater support & involvement is required; right from housing arrangements, health care, handling banking, house rentals; assist in care of school children left behind in boardings etc
Type of government, state of the economy, accepted practices of doing business; nature and focus of legal requirements (in developing vs developed economies)
Moderating Variables
(which accentuate or diminish the difference between domestic & international HRM)
The cultural environment Domestic & International activities of the HRM function Extent of reliance of the MNC on its home country or domestic market
Emergence of stronger & more powerful MNCs Above has been due to a rapid increase in global activity & competition Effective management of HR globally is fast emerging as a critical success factor for international business. Research evidence shows that
Shortage of international managers is becoming an increasing problem The successful implementation of global strategies depends on the existence of an adequate supply of internationally experienced managers Business failures in the international arena may often be linked to poor mgmt of HR Expatriate failure continues to be a significant problem for many international firms
Global Competition
Hard vs the soft approach Matching Model Harvard Model Contextual Model 5-P Model European Model
Matching Model
Highlights the resource aspect of HRM and emphasises the efficient utilisation of HR to meet organisational objectives; emphasises a right fit between organisational strategy, structure & HRM systems
Harvard Model
Stresses the human/soft aspect & is more concerned with employee-employer relationship; highlights the interests of different stakeholders in the organisation & how their interests are related to the objectives of the management
Contextual Model
Is based on the premise that organisations may follow a number of different pathways in order to achieve the same results, this is because of the existence of a number of linkages between external envtal contexts & internal orgnal context these linkages influence the content of the organisations HRM
5P Model
Melds 5 HR activities (philosophies, policies, programs, practices, processes) with strategic needs, shows the inter-relatedness of these activities & their significance in achieving the org. needs
European Model.
European Model
Is
based on the argument that European organisations are constrained at both international & national level by national culture & legislation.; also constrained at the org level by patterns of ownership and at the HRM level by trade union involvement & consultative arrangements. These constraints need to be accommodated while forming a model of HRM.
Strategic IHRM is human resource management issues, functions and policies and practices that result from the strategic activities of multinational enterprises and that impact on the international concerns and goals of those enterprises. Key challenges
Closer regional & global integration & co-ordination Local responsiveness, flexibility and speed Multicultural nature of the workforce Constant interaction of internal & external contextual factors
Culture is a shaping process Members of a group or society share a distinct way of life with common values, attitudes & behaviours that are transmitted over time in a gradual but dynamic process. Subtle process, one is not always conscious of its effect on values, attitudes & behaviours Culture shock results from differences which require one to adapt or get used to in a relatively short period of time.
Because international business involves movement of people across cultures and requires people of different cultures to work together; an appreciation of cultural differences becomes essential for success. Coping with cultural differences and knowing when & how they become relevant are a constant challenge for HR managers.
MNCs need to be: Flexible Locally responsive Share Knowledge Transfer Competence
Managerial Response Need global mindset Informal control mechanism Horizontal communication Survival & Growth Virtual teams International Assignments
Hofstede defined culture as the collective programming of the mind based on a broad tendency to prefer certain states of affair over others.
A nations culture or national character is shaped by historical, geographical and philosophical factors One is not born with a specific culture culture is a set of man made norms commonly ascribed to by a group of individuals and passed on from generation to generation Recognition of cultural differences between peoples is essential and helps us understand the motives and behaviours of those with whom we interact.
There needs to be a fit between what is imported from abroad and the local environment for any policy/practice to be successful and permanent. The concept of recontexctualising of imported practices and concepts is therefore, also applicable to HRM.
Mgmt Style Participative Consultative Paternalistic Autocratic Authority Structure Decentralised Centralised Org Structure Hierarchical Network Leadership Style Task oriented Employee oriented Employee relationship Contractual Emotional
Staffing Policies Recruitment & selection process Remuneration Motivation Job expectation T &D Performance Appraisal Promotion Retirement Redundancy & lay off Industrial Relations Foreign Assignment
Attitude to power & authority Tolerance for ambiguity & uncertainty Attitude to risk & risk taking Individualism, self orientation Collectivism, group orientation Acceptance of responsibility Interpersonal trust Attitude to other peoples opinion Attitude to sharing information & knowledge Recognition of the rights of others to be consulted with Preference for certain leadership styles Preference for independence & autonomy Achievement orientation, ambition Work ethic, honesty
High failure rates of expatriation and repatriation Deployment getting the right mix of skills in the organization regardless of geographical location Knowledge and innovation dissemination managing critical knowledge and speed of information flow Talent identification and development identify capable people who are able to function effectively Barriers to women in IHRM International ethics Language (e.g. spoken, written, body)
Different labour laws Different political climate Different stage(s) of technological advancement Different values and attitudes e.g. time, achievement, risk taking Roles of religion e.g. sacred objects, prayer, taboos, holidays, etc Educational level attained Social organizations e.g. social institutions, authority structures, interest groups, status systems