International Human Resource ManagementManaging people in a multinational context

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• Define key IHRM terms• Review expatriate management evolution• Outline differences between domestic and

international HRM• Discover the increasing complexity and

potential challenges of current IHRM

Chapter Objectives

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Terms

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MNEculture shockemi-etic distinction

HCNPCNTCN

NAFTAUNCTAD

expatriateinpatriate

HRMIHRM

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Inter-relationships between approaches to a field

Figure1-1

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Defining HRM

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An organization’s HRM activities include:1. Human resource planning2. Staffing (recruitment, selection, placement)3. Performance management4. Training and development5. Compensation (remuneration) and benefits6. Industrial relations

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Inter-relationships between approaches to the field

Figure1-2

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International assignments create expatriates

Figure1-3

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Differences between domestic HRM and IHRM

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IHRM complexity can be attributed to six factors:1. Human resource planning2. Staffing (recruitment, selection, placement)3. Performance management4. Training and development5. Compensation (remuneration) and benefits6. Industrial relations

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Variables that moderate differences between domestic and international HRM

Figure1-4

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Laurent’s steps to truly international HRM

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1. Recognize that one’s own HRM reflects home cultureassumptions and values.

2. Recognize that one’s own peculiar ways are neither universally better nor worse than others - just different and likely to exhibit strengths and weaknesses, particularly abroad.

3. Recognize that organization’s foreign subsidiaries may prefer other ways to manage people – ways that are neither intrinsically better nor worse, but possibly more effective locally.

4. Headquarters willingness to acknowledge cultural differences and steps to make them discussable and therefore usable.

5. Build shared genuine belief that cross-cultural learning will result in more creative and effective ways of managing people.

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Table1-1

World top ten non-financial transnational corps., ranked by transnational index

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Table1-2

World top ten non-financial transnational corps., ranked only by foreign assets

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Strategic HRM in multinational enterprises

Figure1-5

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Discussion Questions

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1. What are the main similarities and differences between domestic and international HRM?

2. Define these terms: IHRM, PCN, HCN, and TCN.3. Discuss two HR activities in which a MNE must engage

that would not be required in a domestic environment.4. Why is a greater degree of involvement in employees’

personal lives inevitable in many IHRM activities?5. Discuss at least two of the variables that moderate

differences between domestic and international HR practices.