Lesson 1 Why International HRM

7/31/2019 Lesson 1 Why International HRM

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Lesson 1

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Learning Outcomes

When you finish reading this chapter youshould:

be able to differentiate between personnel

management and HRM know about the origins of HRM

realise the important role that IHRM plays

in the management of multinational

companies


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Learning Outcomes

be familiar, through a real-life case study,with some of the HRM issues faced by staff

in a foreign subsidiary of a major

multinational company


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Human Resource Management

Utilization of individuals to achieve

organizational objectives

All managers at every level mustconcern themselves with human

resource management

Five functions


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Evolution of HRM


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HumanResource

Management

Safety andHealth

Human Resource Management Functions


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PM Vs HRM

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PERSONNEL MANAGMENT HUMAN RESOURCE MANANGMENT

EMPLOYMENT

PLANNING

NARROW TECHNICAL FOCUS CLOSER LINKS WITH BUSINESS

STRAGETY

EMPLOYEE

COMMUNICATION

COLLECTIVE/NEGOTIATING FOCUS MORE DIRECT COMMUNICATION WITH

EMPLOYEES

EMPLOYEE

FEELINGS

FOCUS ON JOB SATISFACTION CONCERN WITH TOTAL

ORGANISATIONAL CULTURE

EMPLYMENT

TERMS

COMPENSATION POLICES FOCUSED ONINDIVIDUALS

CONCERN ON ORGANISATIONALEFFECTIVENESS

EMPLOYMENT

COST-BENEFITS

FOCUS ON COST-REDUCTION (EG. REDUCING

ABSENTEEISM AND TURNEOVER)

FOCUS ON ORGANISATIONAL

EFFECTIVENESS AND THE BOTTOM LINE

EMPLOYMENT

DEVELOPMENT

FOUCS ON INDIVIDUAL SKILLS FOCUS ON LONG TERM EMPLOYMENT

CAPABILITIES

SOURCE: MAHONEY AND DECKUP

(1986)


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Matching Model

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Dynamic Human

Resource ManagementEnvironment


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Labor Market

Potential employees

located within

geographic area fromwhich employees are

recruited

Always changing


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Legal Considerations

Federal, state and

local legislation

Court decisions

Presidential

executive orders


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Society

No longer content to accept, withoutquestion, the actions of business

Ethics - Discipline dealing with what is

good and bad, or right and wrong, orwith moral duty and obligation

Corporate social responsibility - Implied,

enforced or felt obligation of managers

to serve or protect interests of groups

other than themselves


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Unions

Group of employees who

have joined together for

purpose of dealingcollectively with their

employer

Becomes a third party

when dealing with the

company


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Shareholders

Owners of corporation

Because they have invested money in

firm, they may at times challenge

programs considered by

management to be beneficial to

organization


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Customers

People who actually use firms

goods and services

Management has task of

ensuring its employmentpractices do not antagonize

members of market it serves

Workforce should be capable

of providing top-quality goods

and services


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Technology

The world has never before seen

technological changes occur as rapidly as

they are today.

Created new roles for HR professionals Additional pressures on them to keep

abreast of technology

In 2008 survey of CEOs worldwide, 83%ranked change as most important issue

confronting their organization


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Cyberwork

Possibility of never-endingworkday

BlackBerrys, cell phones, text

messaging, and e-mail createendless possibilities for

communication

Some workers believe theiremployer wants them available

24/7


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Economy

In general, when economy

is booming, it is often more

difficult to recruit qualified

workers.

When a downturn is

experienced, more

applicants are typically

available.


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Unanticipated Events

Occurrences in externalenvironment that could notbe foreseen

Every disaster, whethermanmade or by nature,requires a tremendousamount of adjustment withregard to human resourcemanagement


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Porters Value Chain

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DIFFERENCES DOMESTICS AND INTERNATIONAL HRM

1. Unique of operation sites, distribution networks,

suppliers, and their customers are spread acrossnations beyond their familiar home ground

2. They need to negotiate entry into other

countries, adjust their operations to comply with

the host country legal requirements

3. Modify their products and services to reflect the

religious and other cultural preferences of their

foreign customers4. Deal with a variety of accounting and taxation

systems and trade policies

5. They also employ people from different parts of

the world. 25


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Market Entry Strategies


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Standardisation of Product

Globa

l

(Standar

disatio

n)

Local(A

dapt

ation)

Benn

etton

Coca

Cola

McD

onald

s

Proct

erGam

ble

Sanyo

Figure 1

100% 0%


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International division structure

CHALLENGING ASPECT OF INTERNATIONAL HRM


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CHALLENGING ASPECT OF INTERNATIONAL HRM

1. Operations is the multi- cultural nature of their

workforce

2. HRM, like so many other managerial functions,

takes place not in a vacuum but within the

overall internal organisational environment and

the external national and international context inwhich the company operates

3. Business imperatives associated with the form of

MNCs' internationalisation, and their overall

business and market strategies can also influencethe ways in which they manage their employees

located in their subsidiaries scattered around the

world.29


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A Global Perspective: Cultural

Differences in Global HR

Countrys culture is the set of values, symbols,

beliefs, languages, and norms that guide human

behavior within the country

Learned behavior develops as individuals grow

from childhood to adulthood

Companies operating in the global environment

recognize that national cultures differ and thatsuch differences cannot be ignored


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Cultural Differences

When Nike learned

that this stylized Air

logo resembled Allah

in Arabic script, it

apologized and pulled

the shoes fromdistribution.

Lesson 1 Why International HRM

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