INTRODUCTION
TO GLOBAL HR
HRM
GLOBAL PERSPECTIVES
• Global HRM can be defined as set of activities
aimed managing organisational human
resources at international level to achieve
organisational objectives and achieve
competitive advantage over competitors at
national and international level.
INTERNATIONAL HRM
International HRM is the processof:
• Procuring,
• Allocating, and
• Effectively utilizing humanresources
• In a multinationalcorporation, while
• Balancing the integration and differentiation of HR
activities in foreignlocations
Definition ofIHRM:
• The human resources management concepts and
techniques employers use to manage the human
resource challenges of their international
operations.
( G. Dessler )
• International human resource management is
concerned with the human resource problems of
multi-national firms in foreign subsidiaries with the
unfolding of HR issues that are associated with the
various stages of the internationalisationprocess.
( Boxall 1995 )
OBJECTIVES OF IHRM
• To reduce the risk of international
human resources
• To avoid cultural risks
• To avoid regional disparities
• To manage diversifies human capital
NEED FOR GHRM
• To manage expatriates
• To have international orientation
• Effectively utilise services of people at
both the corporate office and at the
foreign plants
• To respect local culture
PV MORGANS MODEL OF IHRM
NEEDS FOR BROADER PERSPECTIVE
Pay issues
• Different countries, different currencies
• Gender based pay in Korea, Japan, Indonesia
Health insurance for employees & their
families
Overtime working – Korean & Japanese
firms
Promotions based on seniority or merit
REASONS FOR GROWING INTEREST IN
IHRM
Globalization of Indirect cost of
Effective HRM
Business poor performance
Significance in
Movement to
implementing and
network
control of
organisation
strategies
GROWING INTEREST IN IHRM
• Globalisation of business leading to
mobilisation of resources
• Effective management of human
resources
• To minimise the risk of
underperformance or failure in overseas
assignments
• Implementation of international
strategies by competent managerial
HOW IT IS DIFFERENT FROM
DOMESTIC HRM
• Domestic HRM is done at national level and
IHRM is done at internationallevel.
• Domestic HRM is concerned with managing
employees belonging to one nation and IHRM
is concerned with managing employees
belongingto many nations.
• Domestic HRM is less complicated due to less
influence from the external environment. IHRM
is very complicated as it is affected heavily by
external factors such as cultural distance and
institutional factors.
HRM AND IHRM
• Complexity involved in operating in
different countries, varied nationalities
ofemployees
• The different cultural environment
• The industry or industries with which the
MNC is involved
• Attitudes of seniormanagement
• Extent of reliance of MNC on home country
domestic market
MAJOR DIFFERENCE BETWEEN
DOMESTIC HRM AND IHRM
• Business activities
• Increased complexities
• Increased involvement in
employees’ personal life
• Complex employee mix
• Increased risks
HR CHALLENGES IN INTERNATIONAL
LEVE L
• Compliance with labour laws
• Talent acquisition
• Developing agile leaders
• Balancing local and home
issues
• Building capability
• Efficient coordination andcollaboration
• Retaining critical talent
• Sharing knowledge acrossborders
• Operating efficiently
• Improving productivity
• Compliance with labour laws:
Everycompanyfinds a challenge in working with laws,
regulations, and rules in another country.
Thesevary dramatically from onecountry to another
, and companies often needthe help of goodadvisers to unravel
and comply with the different rules and policies.
• Talent acquisition :
It iscritical to acquirethe peopleat the right time, but
finding the right talent for a “foreign
company” issometimes adifficult task. Evensimply
identifyingand recruiting individuals can be a challenge
in anothercountry.
• Developing agile leaders:
An organisation needs flexible leaders who can
adapt to the changes and challenges of operating in a
global environment. they must beable to bring the local
context and culture into their decisions and relationships
withineach country.
• Balancing local and home issues:
Deciding which decision must be made locally and
which must be made at the headquarters is critical. For
example, financial accounting may be kept at headquarters,
while successionplanning may need to bemore at the local
level.
• Building capability:
Employees must understand the products and
services and how to produce or sell them.They must
understand how to communicate and integrate with others
across borders in the cultural context. learning and
development can be different from one country to another.
For sustainability, capability must be enhanced routinely in
theorganisation.
• Efficient coordination and collaboration:
A global company must be connected and
orchestrated in its work. Employees must be synchronized in
their projects and efforts, and they must collaborate on a
routine basis.This gets more different when different
languages and long distance are involved.
• Retaining critical talent:
some individuals in the organisation are
considered critical talent, and these are the people who
make the more difference. It is not always an executive
or a manager. It might be the IT team, the direct sales
force, the store managers, or the research and
development professional.The challenge is to retain this
critical talent in the organisation. High turnover can be
disastrous.
• Sharing knowledge across borders:
knowledge management and knowledge
sharing are important, particularly in a knowledge-based
company. Using all the tools for collaboration and
sharing is essential. Building databases that easily
integrate with each other is also important.
• Operating efficiency:
The products and services delivered must be
produced at a low cost to the organisation; otherwise,
competition will have an advantage. Efficiency is king,
and delays and bottlenecks have to be removed to make
a smooth workmachine.
• Improving productivity:
In addition tolowering production costs, there
must be more output. The gross productivity of a firm,
revenue divided by employees, must be continuously
improved as technology is used, capability is enhanced,
and engagement and motivation kick in to deliver a very
powerful workforce.
STRATEGIES OF GHRM
• The strategy demands global HRleadership with standard
system but local adaptation. The key underlying ideas are
to satisfy your company’s global human resources needsvia
feeder mechanism at regional, national and local levels,
and to leverage your current assets to the fullest extent by
actively engaging people in developing their owncareers.
Implementing these ideas can be broken down
into 10 steps. By taking these steps, a company
should be able to put into place an effective
global human resources program within three
to four years.
Break all the "local national" glass ceilings
Trace your lifeline
Build a global database to know who and where your
talent is
Construct a mobility pyramid
Identify your leadership capital
Assess your bench strength
and skills gap
Recruit regularly
Advertise your posts internally
Institute succession planning
Challenge and retain
your talent
TYPES OF STRATEGIC
POLICIES
• Ethnocentric approach
• Polycentric approach
• Geocentric approach
ETHNOCENTRICAPPROACH
• All key management positions are filled byparent
country nationals.
• One’s own culture is superior
• Overlooks important cultural factors
• Maintain a unified corporate culture
• Create value by transferring core competencies.
• Limits advancement opportunities for hostcountries.
• Leads to resentment, lower productivity, and high
turnover in employees.
• E.g : Procter & Gamble ,Toyota & Matushita
POLYCENTRIC APPROACH
• Decentralized control
• Business units in different countries have autonomy from home
office, like a local Co.
• No standard forms or procedures
• Recruits host country nationals to manage subsidiaries, while
parent country nationals occupy key positions at corporateHQ.
• Firm is less likely suffer from culturalmyopia.
• Less expensive to implement.
• Host country nationals have limited opportunities to
gain experience outside their own countries.
• Gap due to language barriers, cultural differences may
isolate corporate HQ from foreign subsidiaries.
GEOCENTRICAPPROACH
• It seeks the best people for key jobs,throughout
the organization, regardless of nationality.
• Hybrid of Ethno and Poly.
• Based on informed knowledge of home andhost
countries.
• Enables firms to make best use of its HR.
• Helps building a strong unifying corporate culture
and informal management network.
• Reduces cultural myopia.
• Enhance local representativeness.
BARRIERS
• Worldwide Variations
• Social, political and economic
circumstances
• Human Resource Functions
• HRfunctions varies according to
country
• Attitude andActions
• Attitude and actions of
headquarters towards HR
• Cultural Differences
• In learning and teaching styles
B A RRIERS
• Resistance to change
• Different locations different way of doing
things
• HRpractice that works in one country
may be unacceptable in another
• As transactional personnel department
• As business partner
• Difficult to gainacceptance
