Introduction to Comparative International HRM H Scullion 1 Global Business Environment What are the major changes to the global business environment over the last decade ? What are some of the major implications for the management of people on a global basis ? Multinational versus Domestic What are the fundamental differences between domestic and multinational corporations? Multi-culturalism Geographic dispersion 3 The combination of both multiculturalism and geographic dispersion is of fundamental importance. (Adler) 4 What are the potential benefits of multiculturalism and geographic dispersion ? What are the main challenges ? Benefits of multiculturalism and geographic dispersion Increased creativity and innovation Sensitivity in dealing with foreign customers Ability to recruit the best talent world wide Global perspective Creating a super organisational culture Greater flexibility to adapt to a wider range of environments. 6 Complexity in MNC The need to be more sensitive to government, labour and public opinion concerns Home country philosophy and practices that are inapplicable in foreign locales Problem of implementing uniform personnel practices and performance standards. Different cultural and institutional contexts 7 IHRM Discuss the reasons for the growth of interest in International Human Resource Management in recent years ? What are the main challenges facing the HR function in MNCs ? 8 Growth of interest in International HRM ? Rapid internationalisation. HRM is increasingly recognised as a major source of competitive advantage in IB Many companies underestimate the complex nature of HRM in IB 9 Growth of interest in IHRM Recognition that failures in foreign markets often linked to HR issues The human and financial costs of failure in foreign markets are higher 10 The growth of network MNCs. Global knowledge management. The growth of micro multinationals. Growing empirical research on IHRM outside North America. H Scullion / Advances in IHRM 1a 11 The next decade will be an era of greater turbulence and complexity in international markets. The international business environment : new economic alignments ; new source of competition ; new forms of international alliances. IHRM will grow in importance in the future 12 International HRM What are the main similarities and differences between domestic and international HRM? Which activities change when HRM goes international ? H Scullion / Advances in IHRM 1a 13 Factors differentiating IHRM from domestic HRM More HR functions and activities Broader perspectives More involvement in employees’ personal lives More Risk exposure More external influences 14 Additional HR activities required in international environment ? International taxation International relocation and orientation Admin support and services for expats Host- goverment relations Translation services Dowling et al (2013) Expatriates are subject to domestic and host – country tax The administration of expat tax policies is complex due to different tax laws abroad Specialist international tax advice to MNCs from global accounting firms International relocation Pre –departure training Immigration and travel advice Housing, shopping, medical care and schooling advice Compensation details including overseas allowances Dowling et al, (2013) A broader view of issues required in international context HR managers in domestic firms deal with a single national group of employees and taxation by one govt. In the international context HR deals with more than one national group of employees ( e.g PCNs, HCNs and TCNs) Complex equity issues arise when employees of various nationalities work together e.g compensation More involvement in personal lifes of employees The need to ensure that expats understand housing, health care , compensation etc International HR services of MNCs often coordinates the administration In the domestic context HR’s involvement with the family is relatively limited In the international context proving advice on schooling and housing is often required Changes in the workforce mix As international operations develop the emphasis put on various HR activities change As foreign operations mature, the need for PCNs declines There is a growing need to select and develop HCNs, particularly high potential local managers Risk exposure The costs of failure in financial and human terms are higher in international than in IB The direct costs (salary, training, travel and relocation costs) of an IA may be three times higher than domestic costs Indirect costs – loss of foreign market share and damage to host country relationships International HRM Definition The human resource management issues and problems arising from the internationalisation of business, and the human resource management strategies, policies and practices which firms pursue in response to the internationalisation process (Scullion, 1995) H Scullion / Advances in IHRM 1a 22 IHRM definitions This broad definition captures the expanding scope of the IHRM field Definition is used by Dowling et al (2013) leading IHRM text in the field Reflects the increasing diversity in what is seen as international work, the type and length of assignments and the more strategic role of HR
