International

HRM

Role and cultural dimensions; HR Systems and Practices across

cultures; Managing Diversity and Inclusion.
IHRM in action Size
structure

. Flow and volume of

information Geographical
dispersion

Operation modes Mgt. demands of

Control Mechanism
Internationalization

Host country
demands
Language National Culture
What is an expatriate?
• An employee who is working and temporarily residing
in a foreign country
• Some firms prefer to use the term ‘international
assignees’
• Expatriates are PCNs from the parent country
operations, TCNs transferred to either HQ or another
subsidiary, and HCNs transferred into the parent
country
1/3
Figure 1-3: International assignments create expatriates
1/4
Differences between domestic and
international HRM
• More HR activities
• The need for a broader perspective
• More involvement in employees’ personal lives
• Changes in emphasis as the workforce mix of expatriates and locals
varies
• Risk exposure
• Broader external influences

1/5
Figure 1-4: Variables that moderate differences between domestic and international HRM
1/6
Figure 1-1: Inter-relationships between approaches in the field

1/7
.
Cross- cultural management
• Geert Hofstede’s work (IBM subsidiaries) (1980-2001) – there is a substantial difference
in national culture)

Comparative Management
• Similarities and differences exists between courtiers in policies and practices adopted by
wide range of stakeholders including the government, political parties, public sector
institutions, professional groups, employers and employee association, private and non-
profit organizations.

International Management and HQ – Subsidiary relationship

• Institutional and cultural contexts, organizational focus, structure, markets and firm’s
strategy to HRM. The growth of global markets, trade war, or reduction of trade barriers
or new bilateral and multilateral trade ties.
• Mergers and Acquisitions – integration process of cross border M&A activity.
IHRM Approaches

Herbert Perlmutter (1969) has given three different approaches to MNCs

staffing (Ethnocentric, Polycentric and geocentric)

• Ethnocentric: The ethnocentric policy approach to staffing designates

home country nationals as top ranking employees in global operations.
• Polycentric: central offices or headquarters are controlled by home
country nationals but other jobs given to oversea workers.
• Geocentric: Assigns job positions to any person best suited for the
position, regardless of the employee’s background, culture or country of
origin.Regio-centric: Best people recruited within region in which the
subsidiary operates (e.g. EU, USA).
Figure 2-1: A model of IHRM

1/10
 Culture and MNCs
• In the words of anthropologist E.B. Tylor, it is –

"that complex whole which includes knowledge, belief, art, morals, law,
custom and any other capabilities and habits acquired by man as a
member of society." Alternatively, in a contemporary variant, "Culture is
defined as a social domain that emphasizes the practices, discourses, and
material expressions, which, over time, express the continuities and
discontinuities of social meaning of a life held in common."
 …….

• culture is "the way of life, especially the general customs and beliefs, of a particular group
of people at a particular time.”
• Culture is the characteristics and knowledge of a particular group of people, defined by
everything from language, religion, cuisine, social habits, music and arts.
Culture
Geert Hofstede’s Cultural Dimensions Theory
• Geert Hofstede is perhaps the best known sociologist of culture and
anthropologist in the context of applications for understanding
international business
Dimensions of National Cultures
• Power distance index (PDI)
• Individualism vs. collectivism (IDV)
• Uncertainty avoidance index (UAI)
• Masculinity vs. femininity (MAS)
• Long-term orientation vs. short-term orientation (LTO)
• Indulgence vs. restraint (IND)
 Start……
• The national boundaries are eroding in the “global
village,”
• Cultural and gender barriers weakening in the global
workforce
• The workforce diversity is no longer an abstraction; it is
part of everyday life in many countries in the developed
world.
Dimensions of Diversity
• Age
• Gender
• Nationality
• Education
• Career
• Industry
Fairness & Discrimination
• Ensure justice
• Fair treatment
• Providing equality of outcome
• Negate differences of employees
• Diversity is not seen as advantage
• Access and legitimacy
• Recognition of cultural diversity
• Matching the market requirements with diversity of own
workforce
• Economic advantages
Avoid…
• Reducing people to their minority background
• Perceived as one dimensional
• High risk of stereotyping
Diversity as a Resource
• Enabling sustainability through organizational learning
• Categorization is no longer a basis for diversity
• Diversity is actively encouraged and integrated
• Multiple identities are accepted as a part of every individual’s
personality
Workforce Diversity and Inclusion in
multinationals
.
Global Diversity Readiness Index
1. National Diversity

Indicators
 Male/female Population Ratio
 Immigrants as % of population
 Religious Diversity
 Ethnic/racial Diversity
 Population over 65 years of age
 Income inequality; Gini coefficient
 Official/major languages
2. Workplace Inclusion
Indicators
• “Glass ceilings” for minorities
• Social elitism in the workplace
• Ease of hiring foreign nationals
• Women’s access to leadership
• Female wage equality for similar
• Female labor force participation
• Meritocratic remuneration
• Corporate ethics
3. Social Inclusion
Indicators
• Tension between religious groups
• Perceptions of ethnic/racial tension
• Cultural openness to migrants
• Openness to gays and lesbians
• Social ills: kidnapping and extortion
• Female/male university enrolment
• Educational attainment of minorities
• Public education spending as a % of GDP
• Importance of religion in country politics
4. Government Inclusion
Indicators
• Political participation of minorities
• Hostility to foreigners/property
• Years of female head of state
• Female representation in legislature
• Years of minority president/PM
• Corruption in government
• Respect for Human Rights
5. Legal Framework
Indicators
• Anti-discrimination laws: minorities
• Anti-discrimination laws: women
• Laws ensuring paid maternity leave
• Laws protecting immigrants
• Policies towards immigration
• Quality of judiciary
• Enforceability of contracts
• Civil liberties
Benefits

No ifs & no buts

Diversity make teams more innovative…. Research proves

• Innovation Revenue: Share of revenue from the new products and

services from las three years.

Diversity drives innovations

Share of females in Management / Leadership
roles and Innovation revenue
Education does not