INTERNATIONAL HUMAN RESOURCE MANAGEMENT

Abstract: This paper attempts to clarify the important role of international human resource management (IHRM) in multinational enterprises (mnes). As a result, first of all, the present paper describes the critical role of human resources in organizations; and moreover, reviews the relevant literature about internationalization of businesses; and then introduces IHRM as a suitable method for these businesses. In the next step, the present paper discusses that IHRM differs from domestic HRM in some aspects. IHRM is much more complex than domestic based human resource Management because there are wider issues to be aware of. Thereafter, the main challenges of mnes and IHR managers are discussed. The advent of the era of liberalization and globalization along with the advancements in information technology (IT) has transferred the world around us. It has brought to Centre stage the importance of human resources, more than ever before. The purpose of human resource management (HRM) is to enable appropriate deployment of human resource so that the quality culture can maintain and satisfy the customers not only in national level but to in global level Emergency of trade blocks with the formation of different economic and political forums expanding role of World Trade Organization have now significantly changed the business environment in terms of competition / liberalization and open end marketing opportunity. Business environment become global business environment. International human resource management is all about the world wide management of human resources Process of sourcing, allocating, and effectively utilizing their skill, knowledge, ideas, plan and perspective in responding to TQM(total quality management).The process of procuring, allocating and effectively utilizing human resources in an international business is called International Human Resource Management or IHRM.

INTRODUCTION The numbers of growing large and small organization, which influence by inter nationalization of organization. That also increases the number of international organization and international employees. This scenario increases the interest of international human resource management (IHRM). There is a broad area to understanding of hrm practices on international level. The internationalization of organization is creates more value for the business but as well as it is also arises many issues. The ethical and social issues are one of them.

IHRM are responsible for the recruiting good employees on international level, international employees came from different countries and different cultures. So, that their thinking level, their behaviors are very different from the local staff. That becomes a challenge for the IHRM practices to manage the human resource. The huge aspect of the wide scope for the IHRM is that, when headquarter based manager contract with employee, who come from different culture. The headquarter manager co-ordinate with the IHRM in their policies and procedures to manage the international employees, the headquarter manager developed the system, that is follow by the completely international organization. The subsidiary level of the increasing involvement of the IHRM in the personal lives of the international employees becomes very important. IHRM activities are more influences by the external force rather than domestic hr activities. The equal employee opportunity (eeo) and policies that meet the legal requirements for the both local staff and international employees is made by the headquarter manager. IHRM practice are helped by the headquarter manager in their policies that is implicated by the international and local staff in the organization. To understands the way of development of employee in the organization on the international level. In this, practices IHRM have to face many responsibilities that is as follow. People begin to develop their internal attitudes from the moment they were kid. Factors such as the conditions that an individual grows up in affect the way that they see the world. For example if a child is raise in a household with a lot of violence, they might feel that fighting is okay. The beliefs of the peers around you may influence how you see things. It is human nature to want to belong and some are more apt to give into peer pressure. People have a lot in common with their peers due to similar values in the first place. However, it is hard to find two people that feel the same about every situation. Some people would feel that if they found money that they should be able to stick it in their pocket and keep it. How IHRM Works In A Mnc Under the context of global economic integration, if the mnc wants to achieve success in the world market, it has to adopt a more multi-national competitive strategy for human resource management, rather than the ethnocentric approach. To explore deeper what constitute the success of a mnc for hrm, the characteristics of IHRM will be stated and analyzed here. Broadly defined, international human resource management (IHRM) means all the process of procuring, allocating, and effectively utilizing human resources within a multinational corporation. If the IHRM is a art of managing different people with various cultures, then the emphasis of IHRM

should be focused on dealing with the changes among the differences from both the people and the culture (warner m and joynt p, 2002), and then to realize the goal of managing workforce efficiently and effectively across boundaries for the company, in other word, during the process of managing, people with different culture, ethnicity, values and ethos will be well coordinated and organized. Compared with the domestic traditional hrm, there are two somewhat conflicting strategic objectives that are needed to be achieved by international human resource managers (sparrow p. Et al, 2004). Firstly, the IHRM managers need to integrate the hr practices and policies across the subsidiaries in different countries so that the corporation objectives can be achieved. Secondly, the approach to IHRM must be flexible enough to allow for many differences in the type of hr policies and practices that are very effective in the different business and cultural environment

Responsibilities of IHRM IHRM manly responsible for the process of procuring, allocation and effective utilize the human resource in the multinational corporation. They must have ability to mix the human resources policies and practices across the number of subsidies in different countries so that achieve corporate objectives. In the IHRM, practices approaches are must be flexible to take the appropriate decision in a different business and cultural settings. When the corporate deals with the domestic human resource management the point of IHRM should be broader, even the most common IHRM activities. IHRM are responsible for the administrative services for expatriates like selecting, training and appraising local and the international employee. Manages the relation with the host governments of countries around the world Brewster,c. & harris h.(2010) international hrm International Human Resource Management is the process of sourcing, allocating and effectively utilizing human resources in a multinational Organization. In the recent decade, international human resource management (IHRM) experienced tremendous research growth due to the increase number of organizations begun to extend their businesses into overseas markets. Multinational Corporation (MNC) is the term used to describe a business with overseas operation.

Some of the main reasons for the growth of interest in IHRM are: 1) The number of MNC has increased with rapid growth of global competition which resulted in increased mobility of human resource.

2) Effective HRM strategy has been recognized as determinant of success or failure of organization. 3) It is more difficult to exercise control and implementation of corporate strategy over remote subsidiaries with different culture and background. (Fernando, 2006) International human resource management (IHRM) represents an important dimension of international management. Over the past three decades, there has been considerable growth in research and practice in IHRM.

The study of IHRM has emerged as a distinct subfield of human resource management (HRM), as evidenced by its inclusion in management education programs, its articulation in organization structures and in the emergence of specialty academic journals(Sheehan, Fenwick and Dowling, 2010). More so, the term covers a broader terrain, but IHRM originated from a single organizational context; that of the multinational enterprise (MNE). Until recently, it has been preoccupied with expatriates, to the extent that IHRM has often been used to refer specifically (and exclusively) to expatriate management. While there is now some consensus that IHRM involves much more than expatriate management, a consistent definition of IHRM is difficult to find. For example, Schuler, Budhwar and Florkowskis (2002) defines IHRM as the world-wide management of human resources with the purpose of enabling the multinational enterprise to perform successfully. Stahl and Bjorkman (2006) similarly adopt a broad definition and define IHRM in the following way: IHRM is the broad spectrum that covers all issues related to the management of people in an international context. That is issues facing MNCs in different parts of their organizations. Scullions holistic definition: the human resource management issues and problems arising from the internationalization of business, and the human resource management strategies, policies and practices which firms pursue in response to the internationalization process Scullion et al (2007). He suggested that IHRM is usually about five sets of issues. These are: the links between strategy and IHRM; international staffing; expatriate performance and assessment.

HRM, as opposed to Personnel Management (PM), is essentially a post-World War II development with North American roots and has increasingly spread worldwide in recent years. It is now well entrenched in management theory and practice due to globalization (Rowley and Warner 2007)....

Research Methodology: Objective of the study:

1. To study the challenges faced by the people working in the alien cultures. 2. To understand the concept of IHRM. 3. To know the failures of expatriates. 4. Various terms related to IHRM.

Sources:

For the fulfillment of the above said objectives, secondary sources in the form of books, websites, reports and journals have been referred to.

Analysis & Interpretation:

Today the most companies are competing in international market by the globalization. Which increase the importance on international human resource management? The best international human resource management practice project is conducts and partially assess in 2002, due to the shortage of empirical studies on human resource management practice. The results called for replications and extensions due to broad approach of the study. In the business situation, the employee has good ethical values and act social conscientious. The trouble is that the moral of a business is a mix of individual bunch of ethics. This is why the association wants good citizens as member of staff. When the international employee work with the local employ they should have give the same importance and respect to each other. Social responsibility is can say that the example of ethical behavior. If the trade were to slack too much cash, then it would stop to exist, upset customers, and put down employees jobless. There is some dispute that societal responsibility is demonstration mean to produce a advantage for others further the company. Additional, some firms may they do finest as a business and give reverse what they can. Examples of publicly accountable behavior vary from projects that elevate money for investigation on diseases, raising cash for the needy, involving works to volunteer in the society, recalling items that may be unsafe, promoting reprocessing, and offering at no cost services to the countless ethical impasses that may happen in business surroundings. Few of them are further understandable while few of them are more incomprehensible. There is a plain foundation that helps keep decisions in perspective. Business should operate in a

manner that is legal, profitable, and ethical and within social norms. By being within social norms, means that you need to use society to gauge if your decisions are appropriate. Some cultures would define what is ethical differently from other cultures. Because all businesses need to be profitable, sometimes there is an over emphasis on making more money. Social norms should govern what is appropriate to compensate individuals as well as to charge customers. Profit expectations and goals should not require a business to cut corners in an unethical way or to misrepresent or twist facts. Many researchers found that the local staffs are in competed, lazy and not committed for the job. They also found that many international employees are making up their mind about the local employees that they are not reliable and trustworthy. The local staffs are not reliable, because they do not take the responsibility seriously.

Review of the Literature: 1. Paik Yongsun, (2003), Expatriate managers and MNCs ability to control international subsidiaries: the case of Japanese MNCs: The study focuses on the factors for building upon the notion of behavioral means of control; this paper contends that the level of cultural knowledge of expatriates plays a critical role in determining the effectiveness of expatriates as a means of control over international subsidiaries of multinational corporations (MNCs). An empirical investigation with a sample of Japanese MNCs indicates that while expatriate personnel with adequate cultural knowledge of the host country contribute to the MNCs control ability, those without cultural knowledge do not. 2. Svendsen Kristine,(2011), Drivers of Subsidiary Performance The Impact of Subsidiaries Autonomy in Determining HR-Policies: The paper focuses on Globalization. Globalization has created the challenge of applying management approaches from company headquarters and at the same time adjusting them locally in subsidiaries. Hence, MNCs must design HR-systems that balance the needs of both local responsiveness and global integration, which is a balance that has implications for performance. Therefore, many MNCs have decided to grant considerable autonomy to their subsidiaries in relation to creating their own HR-systems for strategic reasons. As such, the purpose of this project is to examine how subsidiary autonomy in determining pay & performance policy, training & development policy, employee involvement & communication policy, and policy towards trade unions, can affect subsidiary performance

more specifically, labour productivity and performance in relation to customers and employees. 3. Singh Gautam Priti, (2012), An Adjustment Process of Expatriate: U-Curve Theory (Culture Shock, Acculturation, Adjustment): Now a days organization start expatriation to globalize there business and in this process expatriate face various problems due to culture differences and lack of language knowledge. This paper reports study conducted the adjustment process from initial to departure from the host country of expatriate in the Indian environment; we also explain the need of proper training before the departure from the home country to host country. In our research we reviewed theories and models to explain the all situation of expatriate adjustment. Also we try to explain the circumstances where expatriate adjust or withdraw from their project and get back to home. Through these organizations can know the entire situation and try to teach or guide expatriate to face and get out from all worst to worst situation like cultural shock in the easiest way before the pre-departure.

Conceptual framework: Dimensions of IHRM: According to P.V. Morgan: IHRM is the interplay among 3 dimensions: HR Activities. Types of employees. Types of Countries

1) Broad activities of IHRM Procurement, allocation and utilization of Human resources cover all the six activities of domestics HRM i.e. HR planning, Employees Hiring, Training and Development, Remuneration, Performance Management and Industrial Relations. 2) The three national or country categories involved in IHRM activities Are: - The host country where subsidiary may be located - The home country where the company has its head quarters and - Other countries that may be sources of labour or finance. 3) The three types of employees of an international business are Parent Country Nationals (PCNs), Host Country Nationals (HCNs) and Third Country Nationals (TCNs). For example, IBM which employs Australian Citizens in its Australian operations, after sends US citizens

to Asia Pacific Countries on assignment, and may send some of its Singaporean Employees to its Japanese operations.

Purpose of IHRM: To enable the firm /the multinational corporations (MNCs), to be a Successful globally.

Objectives of IHRM: Remaining competitive throughout the world Efficient Locally Responsive Flexible and adaptive Capable to transforming learning across their globally dispersed units

Significance of IHRM in International Business: Scullion (2001) outlined 10 major significance of IHRM in globally business Environment. This significance can categorize in 5 key areas: CHALLENGE: Rapid growth of internalization and global competition has increased the nos. and significances of MNCs resulting in the increased mobility of human resources. Increasing no. of strategic alliances and cross border mergers and acquisitions has increased the strategic implementation of IHRM as Global business. COMMITMENT: 1. Worldwide recognition of management of human resources in International business and cross cultural management. 2. Business Networks and Horizontal communication and HR play a vital role. COST EFFECIVENESS: The performance of expatriates. (Poor performance of expatriate may affect the market share and damage to foreign relations) Growing Importance of Expatriates in International Business. COMPETENCE: Global strategy implementation. Success or failure of international business based on effectiveness of management of HR. CONGRUENCE: Learning, knowledge acquisitions have been identified as important potential sources of comp. advantages for MNCs. This has also enhanced the role of IHRM to meet the key strategic challenge of objectives.

Knowledge management is an important source of comp. advantage for MNCs, where IHRM is the key partner and plays a central role.

Major Issues in International HRM: According to Hendry (1994), there are three main Issues in IHRM: 1. The management and development of expatriates- selection, training, compensation and repatriation of expatriate failures. 2. The internationalization of management through out the organization (host country, parent country and other third countries) 3. The need to internationalize the whole organization by creating a new corporate culture reflecting the need for greater international experiences across the whole organization, due to the increasing frequency of cross cultural interactions of doing business at home as well as abroad mainly Cultural communication & gauge and Language and communication

Role of International HRM: International human resource management is the basis of success of any global multinational organization. International HRM enhances employees effectiveness to achieve goals of the organization and meet the needs; to develop employees to assume more diverse tasks, assignments, face challenging situations and better understand the cultural variations across the nations. IHRM department deals with heterogeneous functions and has to give additional focus on various aspects, such as: 1. More involvement in the employees personal life. 2. Deal with different groups of employees i.e. PCN, HCN and TCN for which HR policies and practices may differ. International HR managers have to understand cultural differentiation in multicultural environment. 3. Manage external influences, i.e host government authorities, business and other interest pressure and labour groups, etc. 4. Lay different emphasis on management training to deal diverse workforce, their orientation and to meet international environment and 5. Provide guidance on taxation and compensation aspects. However, there are some important limitations in IHRM: Management is basically the principle based on local cultures, traditions, practices and needs of the organizational growth. It is not universal for everywhere, specially in the field of human resources management. HRM methods and systems developed by one society can not

always be transferred and applied to another. HRM and industrial relations practices differ across countries as these have their historic origin in countries.Personnel management and industrial relations are embedded in societal rules, norms, values, ideologies and no MNC can afford to ignore the influence of local culture.

CONCLUSIONS: In the competitive environment, stakeholders create pressure on international agencies and multinational companies for increase dividends. That activity is eloquent concern for social and ethical responsibilities. The multinational companies and international agencies are try to make the most cost-effective and ethical use of all resources. That is the way they manage their international human resource. Recruit the international employee to develop the local marketing talent. While there are obvious constraints on studies of this kind in terms of the limited sample size, the spread of respondent and interpretive biases, the findings all point to the detrimental consequences of the ongoing tensions that exist between local staff and expatriate managers. The ethical and social issues in the international organization may be resolved by the generating trust, harmony and a sense of common purpose among all the staffs whatever they local employee or international employee. The difference in thinking and behavior of the local and international employee create unproductive work in the organization. This activity raise the question that the continues use of international employee is both cost-effective and ethical. While there is strongly need have high quality skills and experiences in the complex international organization. It is sufficient evidence to show that the multinational companies and international organization agencies and IHRM need to invest more in development the skills, confidence and capability in the local staffs. it has been observed that effective internationalization of human resources management and IRs remains bleak. The degree of adaptation on International HRM to local customs in various subsidiaries of MNCs will be remaining on the strategic agenda. and managing International HR activities is an elaborate and complex task for todays manager.

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