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International Human Resources Management

Lecture 1: Intro to IHRM:
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Domestic HRM: Involved with employees with only one National boundary
International HRM: deals with three national or country categories, i
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, the parent country
where the firm is actually originated and headquartered; the host country where the
subsidiary is located; and other countries from where the organization may source the
labour, finance or research and development
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IHRM

Majority of Joint Venture Failures have been attributed to cultural factors such as conflict
management styles and operational processes over financial or technical problems
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PCN (Parent Country National): person working in a country other than their country of
origin
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70% of failures from expatriates
was because partner could not adjust to change so some companies offer both jobs
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Easier to send men abroad to do work then they come back to
family, whereas women are maternal so assumed to take care of children as major role
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TCN (Third Country National): They are the citizens of a country other than the country
where the organization is headquartered and the country that is hosting the subsidiary
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It is also necessary to manage the employment of different
national categories of employees which is the responsibility of the HR Department
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There is
also a need for managing the interaction of different cultural norms and social values and
adapting HRM practices from culture to another
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What is private in
one culture is public in another culture
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Companies hire to send
them to another country where they want to open company to be attractive to the people
you are persuading by having someone from the same culture as them
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However, the issue with this is racism as you will only pick
those attached to a certain culture for monetary purposes
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However, this can
lead to prejudice and even racism! Prejudice is having a pre-conceived Notion!

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Reward systems reinforce group processes! A culture is an institution- there are specific
laws, processes and procedures that need to be managed when globalising
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Like the laws, social norms, values, even business practices in the new
country!

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Universalist HRM: The purpose of the study of HRM is to improve the way HR are managed
strategically within organisations
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Contextual HRM: The search for an understanding of what is contextually unique and why?
Focusing on culture, ownership, labour, markets, role of the state and trade unions
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Convergence: Argument that business practices around the world converge towards the
most efficient as technology imposes similar structures
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Divergence: Focus on the variation of policies and applications across different national and
regional contexts
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Culturalist Approach: explains the differences in managerial behaviour as mainly
stemming from variations in national culture (Hofstede,1980; Adler,1991)
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‘Global’ companies operate in many countries like ‘insiders’ detached from their original
nationalities (Kerr, 1971; Ohmae, 1990; Holden, 2000)
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(Bartlett & Ghoshal, 1989)

Lecture 2: HRM in Multinationals:
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** Some Companies go abroad to increase sales, increase Profit, first-mover advantage, and
opportunity spotted, product in current country may be reaching end of PLC etc
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There are:
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2
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NOTE: Risk and Competition are both Pull and Push Factors
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M&S and Tesco- British, Failed in France
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Google- USA, exiting China due to censorship, now in HK
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The definition of a company is always linked to its headquarters
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For example, Nestle HQ is in Switzerland
but says it does not associate with any country
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This also brings up the
question of what is rhetoric and what is reality?

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There are 3 main differences between domestic and multinational firms
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Multiculturalism: the presence of people from two or more cultural backgrounds
within an organization
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Geographic Dispersion: the location of various subunits of the parent firm in
different countries
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Complexity: interdependence among operations (Produce somewhere else, sell
somewhere else): Task interdependence and knowledge flows
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While traditional MNCs are national companies with foreign
subsidiaries
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Different level effects on HRM in MNCs: MACRO, MESO, MICRO
There are different forms of internationalization
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Different forms, different HR processes implied
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Second, JV (Joint Venture),

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Joint
Ventures

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strategic alliances, M & A (mergers and acquisitions) and wholly- owned subsidiaries- these
involve direct contact with local employees and other nationals
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Joint Venture: A business owned jointly by two or more independent firms who continue to
function separately in all other respects but pool together their resources in a particular line
of activity
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Need to be secure agreement as to how the business should be managed
and developed
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Failure Factors in JV: partners do not clarify each other goals, they fail to learn about each
other, they cannot get along, they fail to trust each other (lack of good communication,
often between expatriate and local managers), lack of appropriate organizational structure,
management roles and leadership, unwillingness/inability to transfer/ share knowledge with
each other
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Mergers and Acquisitions: The combining together of two firms into a single business on a
basis that is mutually agreed by the firm management and approved by their shareholders
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Mergers most common in the film industry
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Examples of Failed M & As: Daimler Benz and Chrysler, Daimler and mitsubushi, Nomura and
Lehman Bros, British steel and Hoogovens (Collectively known as Corus)
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Establish new geographical presence, then HR manages cross-cultural, language and
communication
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Acquire new Technology, then HR is retaining key technical staff or key talent, including
scientists and engineers
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Consolidate and reduce costs, then HR deals with redundancies with is the most
sensitive topic In HR
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Syndrome of Survivors ( Quit, Fear, Demotivated)
4
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Stages of M&A and HRM:
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Integration stage: roles of
communication, training, staffing, recruiting, rewarding; roles of leadership; practices for
knowledge transfer
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Typology of MNCs (Bartlett & Ghoshal, 2000):
MULTIDOMESTIC, INTERNATIONAL, GLOBAL, TRANSNATIONAL
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More MNCs are emerging from countries other than the traditional
sources
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Cultural Distance: when we invest, we invest in companies totally different than us
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Emerging MNCs: Emphasis on delegation, empowerment, and power sharing as key
component of effective leadership, the influence of the top manager is diminished, Emphasis
on consistency and logic in management
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HCNs (Host Country Nationals) polycentric staffing policy, TCNs (Third Country Nationals) - geocentric staffing policy,
Real one for Business, knowhow/Expertise is! best expert, most knowledgeable one!

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Subsidiary Perspective:
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Local qualified people are discouraged to apply for jobs
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Flexible practices is allowing for variation across nations and taking national cultures
into account
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(Siemens and HP)
Corporate Language: effective coordination mechanism in MNCs and strategic positioning of
language-competent staff! (Siemens- train in 4 languages)

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