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1-IHRM Introduction Lecture (1)

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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
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