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International and Comparative ASPECTS
Of Human Resource Management
By / Mahmoud Shaqria
‫شقريه‬ ‫محمد‬ ‫محمود‬
OUT LINES:
1. Def Of IHRM
2. What are reasons that encouraged global organizations to
develop international HR strategies?
3. OBJECTIVES OF IHRM
4. TYPES OF INTERNATIONAL ORGANIZATIONS
5. DIFFERENCES BETWEEN IHRM & DOMESTIC HRM
6. IHRM Practices
7. External environment & IHRM
8. ACTIVITIES INVOLVED IN IHRM
9. EFFECTIVE 'HRM IMPLEMENTATION
What is IHRM?
 IHRM can be defined as set of activities aimed
managing organizational human resources at
international level to achieve organizational
objectives and achieve competitive advantage
over competitors at national and international
level.
Simple definition is ‘the process of
managing people in international
settings’
IHRM is the management of HR in
business operations in at least two
nations
What are reasonsthat encouraged global organizations
to develop international HR strategies?
Global competition and differences in
organizational environment across nations
Globalization of Business
Effective HRM determinant of success in
international business
OBJECTIVES OF IHRM
 Create a local appeal without compromising upon
the global identity
 Generating awareness of cross cultural sensitivities
among managers globally and hiring of staff across
geographic boundaries .Training upon cultures and
sensitivities of the host country
TYPES OFINTERNATIONAL
ORGANIZATIONS
 1.International Corporations
2.Multinational Corporations
3.GlobalCorporations
4.Transnational Corporations
International Corporations
Domestic firms that builds on its existing
capabilities to penetrate overseas market.
Example : Honda, General Electric, P&G
Multinational Corporations
MNCs have operating units (subsidiaries)
located in foreign countries
Subsidiaries function as autonomous units
Examples : Shell, Philips, Xerox
Global Corporations
Maintains control over its worldwide
operations (subsidiaries) through a
centralized home office.
They treat the entire world as a single
market
Examples : Matsushita
Transnational Corporations
 Provides autonomy to independent country operations
but bring these operations together into an integrated
whole through networked structure
 They combines the local responsiveness of an MNC and
the efficiency of a global corporation
 Examples : Ford & Unilever
How It Is Different from Domestic HRM
 Domestic HRM is done at national level and
IHRM is done at international level.
 Domestic HRM is concerned with managing
employees belonging to one nation and IHRM is
concerned with managing employees belonging
to many nations
 (Home country, host country and third country
employees)
DIFFERENCES BETWEEN IHRM &
DOMESTIC HRM
 IHRM
 Address a broad range of
HRM activities
 HR issues relate to
employees belonging to
more than one nationality
 Greater involvement of
HR manager in the
personal life of employees
 Domestic HRM
Address a narrow range of
HRM activities
 HR issues relate to
employees belonging to
single nationality
 Limited involvement of HR
manager in the personal life of
employees
IHRM Domestic HRM
Greater exposure
to risks in
International
assignments
Has to manage
several external factors
such as government
regulations of foreign
country
 Limited risks in
domestic
assignments
 Limited external
factors to deal with.
IHRM Practices
International staffing
Pre-departure training for international
assignments
Repatriation
Performance management in international
assignments
Compensation issues in international assignments
1) International staffing
refers to the process of selecting employees for
staffing international operations of an MNC
MNCs can be staffed using three different sources
a. Home country or Parent Country National (PCN)
b. Host Country Nationals (HCN)
c. Third Country Nationals (TCN)
 PCN
Employees of an organization who are citizens of the country
in which the headquarters of the company is located
 HCN
Employeesof anorganizationwhoarethecitizensofthe
country in which the foreign subsidiary is located
 TCN
Employees of an organization who are the citizens of the
country other than the country where the organization is head
quarterd and the country that is hosting the subsidiary
Approaches to staffing subsidiaries
 Ethnocentric
foreign subsidiary has little autonomy. All strategic
decisions are made at the headquarters. PCNs staff key
positions at quarters as well as the foreign subsidiary
 Polycentric
staff foreign subsidiaries of the firm with HCNs and
headquarters consist of PCNs
 Geocentric
 staff my be PCNs, HCNs or TCNs
ability and not nationality is the key to staffing
2)Pre-departure Training for
International Assignments
 To make it easier for the employee to assume
job responsibilities and be effective in the
foreign country as soon as possible
 To facilitate cultural adaptation as quickly and
as effectively as possible
3)Repatriation
 It is the process of bringing an expatriate home
after he/she has completed the international
assignment
Organizations can follow 3 practices
1. Create knowledge and develop global leadership
skills
2. Ensure that candidates have cross-cultural skills to
match their technical abilities
3. Prepare people to make the transition back to
their home offices
4)Performance Management in International
Assignments
 Performance is the combination of several factors
 Compensation Package
 Task Assigned to the Expatriate
 Head quarter’s Support
 Environment
 Cultural Adjustment
5)Compensating Managers in
International Assignments
 Components of expatriate compensation
 Home leave and travel allowances
Children’s education allowance Currency
differential payments Relocation allowance
 Housing allowance
 Cost of living adjustment
 Payments to protect from negative tax consequences
External environment & IHRM
Political Environment
Cultural Environment
ACTIVITIES INVOLVED IN IHRM
Ahmed Limam
EFFECTIVE 'HRM
IMPLEMENTATION
The following checklist identifies some of the
critical decisions/actions required in the
formulation and implementation of an effective
IHR strategy.
1)As certain the current and intended nature of
international operations in the organization (multi
domestic, international, global or transnational?)
 2)Determine the extent to which HR policies and practices should
be standardized or localized in accordance with overall
organizational strategy
3)Assess the extent to which local cultural economic and legal
factors will
impinge on any attempts to apply standard HR policies if integration
is a key
factor in organizational strategy.
4)Ensure a computerized database of global human resources is used
if integration is desired.
5)Work with the senior management team to
identify the competencies required to
achieve global organizational objectives
6)Work with national HR and line managers to
formulate IHR policies and
practices in the key areas of sourcing,
development and reward
which will embed a transnational mindset in
the organization.

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International and comparative aspects of human resource management

  • 1. International and Comparative ASPECTS Of Human Resource Management By / Mahmoud Shaqria ‫شقريه‬ ‫محمد‬ ‫محمود‬
  • 2. OUT LINES: 1. Def Of IHRM 2. What are reasons that encouraged global organizations to develop international HR strategies? 3. OBJECTIVES OF IHRM 4. TYPES OF INTERNATIONAL ORGANIZATIONS 5. DIFFERENCES BETWEEN IHRM & DOMESTIC HRM 6. IHRM Practices 7. External environment & IHRM 8. ACTIVITIES INVOLVED IN IHRM 9. EFFECTIVE 'HRM IMPLEMENTATION
  • 3. What is IHRM?  IHRM can be defined as set of activities aimed managing organizational human resources at international level to achieve organizational objectives and achieve competitive advantage over competitors at national and international level.
  • 4. Simple definition is ‘the process of managing people in international settings’ IHRM is the management of HR in business operations in at least two nations
  • 5. What are reasonsthat encouraged global organizations to develop international HR strategies? Global competition and differences in organizational environment across nations Globalization of Business Effective HRM determinant of success in international business
  • 6. OBJECTIVES OF IHRM  Create a local appeal without compromising upon the global identity  Generating awareness of cross cultural sensitivities among managers globally and hiring of staff across geographic boundaries .Training upon cultures and sensitivities of the host country
  • 7. TYPES OFINTERNATIONAL ORGANIZATIONS  1.International Corporations 2.Multinational Corporations 3.GlobalCorporations 4.Transnational Corporations
  • 8. International Corporations Domestic firms that builds on its existing capabilities to penetrate overseas market. Example : Honda, General Electric, P&G
  • 9. Multinational Corporations MNCs have operating units (subsidiaries) located in foreign countries Subsidiaries function as autonomous units Examples : Shell, Philips, Xerox
  • 10. Global Corporations Maintains control over its worldwide operations (subsidiaries) through a centralized home office. They treat the entire world as a single market Examples : Matsushita
  • 11. Transnational Corporations  Provides autonomy to independent country operations but bring these operations together into an integrated whole through networked structure  They combines the local responsiveness of an MNC and the efficiency of a global corporation  Examples : Ford & Unilever
  • 12. How It Is Different from Domestic HRM  Domestic HRM is done at national level and IHRM is done at international level.  Domestic HRM is concerned with managing employees belonging to one nation and IHRM is concerned with managing employees belonging to many nations  (Home country, host country and third country employees)
  • 13. DIFFERENCES BETWEEN IHRM & DOMESTIC HRM  IHRM  Address a broad range of HRM activities  HR issues relate to employees belonging to more than one nationality  Greater involvement of HR manager in the personal life of employees  Domestic HRM Address a narrow range of HRM activities  HR issues relate to employees belonging to single nationality  Limited involvement of HR manager in the personal life of employees
  • 14. IHRM Domestic HRM Greater exposure to risks in International assignments Has to manage several external factors such as government regulations of foreign country  Limited risks in domestic assignments  Limited external factors to deal with.
  • 15. IHRM Practices International staffing Pre-departure training for international assignments Repatriation Performance management in international assignments Compensation issues in international assignments
  • 16. 1) International staffing refers to the process of selecting employees for staffing international operations of an MNC MNCs can be staffed using three different sources a. Home country or Parent Country National (PCN) b. Host Country Nationals (HCN) c. Third Country Nationals (TCN)
  • 17.  PCN Employees of an organization who are citizens of the country in which the headquarters of the company is located  HCN Employeesof anorganizationwhoarethecitizensofthe country in which the foreign subsidiary is located  TCN Employees of an organization who are the citizens of the country other than the country where the organization is head quarterd and the country that is hosting the subsidiary
  • 18. Approaches to staffing subsidiaries  Ethnocentric foreign subsidiary has little autonomy. All strategic decisions are made at the headquarters. PCNs staff key positions at quarters as well as the foreign subsidiary  Polycentric staff foreign subsidiaries of the firm with HCNs and headquarters consist of PCNs  Geocentric  staff my be PCNs, HCNs or TCNs ability and not nationality is the key to staffing
  • 19. 2)Pre-departure Training for International Assignments  To make it easier for the employee to assume job responsibilities and be effective in the foreign country as soon as possible  To facilitate cultural adaptation as quickly and as effectively as possible
  • 20. 3)Repatriation  It is the process of bringing an expatriate home after he/she has completed the international assignment
  • 21. Organizations can follow 3 practices 1. Create knowledge and develop global leadership skills 2. Ensure that candidates have cross-cultural skills to match their technical abilities 3. Prepare people to make the transition back to their home offices
  • 22. 4)Performance Management in International Assignments  Performance is the combination of several factors  Compensation Package  Task Assigned to the Expatriate  Head quarter’s Support  Environment  Cultural Adjustment
  • 23. 5)Compensating Managers in International Assignments  Components of expatriate compensation  Home leave and travel allowances Children’s education allowance Currency differential payments Relocation allowance  Housing allowance  Cost of living adjustment  Payments to protect from negative tax consequences
  • 24. External environment & IHRM Political Environment Cultural Environment
  • 25. ACTIVITIES INVOLVED IN IHRM Ahmed Limam
  • 26. EFFECTIVE 'HRM IMPLEMENTATION The following checklist identifies some of the critical decisions/actions required in the formulation and implementation of an effective IHR strategy. 1)As certain the current and intended nature of international operations in the organization (multi domestic, international, global or transnational?)
  • 27.  2)Determine the extent to which HR policies and practices should be standardized or localized in accordance with overall organizational strategy 3)Assess the extent to which local cultural economic and legal factors will impinge on any attempts to apply standard HR policies if integration is a key factor in organizational strategy. 4)Ensure a computerized database of global human resources is used if integration is desired.
  • 28. 5)Work with the senior management team to identify the competencies required to achieve global organizational objectives 6)Work with national HR and line managers to formulate IHR policies and practices in the key areas of sourcing, development and reward which will embed a transnational mindset in the organization.