International HRM: How Do You Navigate the Challenges of Managing a Global Workforce?

Hi,

I am starting a new topic for discussion - International HRM. Please feel free to discuss.

Atif

what is IHRM?

International human resource management (IHRM) is about the worldwide management of human resources. The purpose of international human resources management is to enable the firm, the multinational enterprise (MNE), to be successful globally. This entails being: (a) competitive throughout the world; (b) efficient; (c) locally responsive; (d) flexible and adaptable within the shortest of time periods; and (e) capable of transferring learning across their globally dispersed units. These requirements are significant, and the magnitude of the reality is indisputable: for example, a substantial majority of industries in North America and Europe are under full-scale attack by foreign competitors. On the other hand, most of the emerging markets are now bombard by foreign direct investments (FDIs) by the MNEs of developed nations.

IHRM for many firms is likely to be critical to their success, and effective IHRM can make the difference between survival and extinction for many MNEs. Yet, for reasons of cost, time, and difficulty, IHRM research has been limited and largely focused on a few issues. Calls are now being made to advance our understanding of this important area in several ways, including: 1) developing models and frameworks to reflect the complex set of environ¬mental factors that impinge upon the global management of human resources researching international human resource activi¬ties in a way that recognizes their systematic interaction and 3) utilizing more theoretical perspectives to predict and explain relationships.

anybody wants to add he is most welcome

for this

regards

atif

IHRM IssuesIHRM issues are best conceptualized in terms of interunit and intraunit needs and challenges. Although the MNE is separated across several nations, it remains a single enterprise and therefore must consider how to balance competing pressures for differentiation and integration. Multinationals must decide how to be sensitive to unique demands of the indigenous environment without inhibiting their ability to coordinate the internal operations of local units in pursuit of global strategies. Because these issues of differentiation and integration are often facilitated by human resource management activities, they represent a critical component in IHRM. An example of this dual focus is found in most American based MNEs, which tend to assign primary responsibility to their subsidiaries for local compensation and benefits, training, and labor relations, with regional units assuming secondary (i.e., coordinating) responsibility.

IHRM FunctionsIHRM functions represent three areas: an MNE's human resource orientation, the resources (time, energy, money) allocated to its human resource organiza¬tion, and the location of those resources and HR decision making. Considerable resources can be devoted to human resource management on a transnational scale. The center can staff a rather extensive HR department dedicated exclusively to IHRM tasks, such as deciding how to select and repa¬triate international assignees as well as how to compensate these employees. It can also hire a staff of individuals to focus on managerial training and development, largely to develop a global management cadre. Accordingly, the resources devoted to and the location of IHRM operations can be expected to vary considerably across MNEs. Dowling (1988) documented several types of IHRM structures within MNEs, including: a totally centralized HR function; centralized HR policy development with regional input in implementation; corporate, group, and divisional HR units with unique responsibilities; and centralized HR decision making for parent country nationals (PCNs) and third country nationals (TCNs). Of course, IHRM resource consumption should diminish as (1) the number of PCNs and TCNs decreases; and (2) overseas units are awarded greater decision making autonomy (i.e., decentralization).

IHRM Policies and PracticesIHRM policies and practices, which constitute the last component of the model, involve the development of general guidelines on how individuals will be managed and specific HR initiatives. IHRM policies and practices relevant to the needs of MNEs include those related to planning, staffing, appraising, compensating, training and developing, and labor relations. To illustrate, an MNE might have an HR policy that indicates that performance will be rewarded. Given that this is a rather general statement, each MNE unit could be free to develop specific practices that are simultaneously consistent with local conditions and the general policy. Under this policy, one local unit might develop an individual incentive plan for the general manager tied to the sales of the local operation while another unit might institute a group incentive plan for the entire top management team tied to host country sales.

Appraising Performancein IHRM

While the expatriate is on assignment, the individual performance must be appraised (Dowling, Schuler, and Welch 1994; Brewster and Scullion 1997; Dowling, Welch and Schuler 1999; Tahvanainen 2000). Peterson, Napier and Shim (1996), in their comparative IHRM study of British, German, Japanese and the US multinationals found that expatriates had performance appraisals while serving in the foreign assignment. Their appraisal mechanisms varied from quantitative (e.g. graphic scale) to qualitative (e.g. MBO or narrative). As discussed above, many types of assignments exist entailing numerous job performance dimensions. For the expatriate assignment, in contrast to the domestic assignment, MNEs need to evaluate dimensions of performance not specifically job related, such as cross-¬cultural interpersonal qualities; sensitivity to foreign norms, laws, and cus¬toms; adaptability to uncertain and unpredictable conditions; and the host location's integration with other MNE units. The significance of these factors will vary by the type of expatriate. Thus far, the research on expatriate perfor¬mance appraisal has not fully addressed the relative impact of these uniquely inter¬national dimensions of performance, regardless of the type of expatriate assignment (Dowling, Schuler, and Welch 1994; Peterson, Sargent, Napier and Shim 1996; Tahvanainen 2000). Thus, the research opportu¬nities in this area are relatively unlimited.

While the performance appraisals of expatriates who are assigned for spe¬cial technical projects and short term stays tend to be operational and task¬-focused, evaluations of the expatriate manager tend to be more strategic, more related to the operation of the entire unit and how it relates to the other loca¬tions (Phatak 1992; Evans 1986; Selmer and de Leon 1997). Appraising the performance of this manag¬er, therefore, becomes an important issue at the interunit linkage level of IHRM (Fulkerson and Schuler 1992; Dowling, Welch and Schuler 1999). Units within a large MNE may pursue different strategic missions, face different legal conditions, and encounter far different competitive situations. Consequently, MNEs must account for these environ¬mental conditions when constructing appraisal formats and individual objec¬tives for unit managers (Pucik 1988; Lindholm et al. 1999). While it appears that this approach to PCN appraisal is not unknown within large multinationals (Fulkerson and Schuler 1992), there is little empirical evidence to suggest how widespread the practice is or under what conditions (e.g., degree of trust) it is more effective. It does appear, however, that performance appraisal of expatriate managers can be a critical means whereby MNEs link their units together (e.g., by appraising cooperative behaviors and incorporating the various environmental dimensions into each manager's appraisal format differently). It can also facil¬itate the development of a common appraisal format that recognizes and makes situational differences legitimate, so that the relative contributions of managers around the world can be tracked, evaluated, and compared. This strategically and culturally standardized information should guide managerial career development, future promotion decisions, and compensation adjust¬ments. As the next two sections detail, though, there is little evidence that strong linkages actually exist.

hi

i got some more informationson IHRM

its interesting

Training and Developing in IHRM

This aspect of IHRM presents another means of linking the dispersed units of an MNE. Traditionally, research has focused on the predeparture training extended to PCNs and their families. Lack of preparation generally has been associated with a higher expatriate failure rate; U.S. multinationals tend to engage in less training than do their European and Japanese counterparts (Tung 1982; Ronen 1986; Noble 1997). Moreover, U.S. MNEs ordinarily place less emphasis on language, interpersonal skills, and culture sensitivity in their training programs than do MNEs based elsewhere (Brewster 1988; McEnery and DesHarnais 1990; Tung 1982; Dowling, Welch and Schuler 1999; Harris and Brewster 1999b). Consequently, it is not surprising that U.S. MNEs experience higher expatriate failure rates than do other multinationals. At times such claims are contradictory, for example, Peterson, Napier and Shim (1996: 550) report low failure rates than reported by Tung (1982). However, as suggested above, the findings of Peterson, Napier and Shim (1996) also confirm higher expatriate failure rates in American multinationals in comparison to Western European and Japanese MNCs. As much of this research is based on self reported data, therefore, more rigorous designs are needed to better control potential cultural biases (e.g., home country differences in the willingness to disclose organizational shortcomings or seek early repatriation).

Increasingly, scholars and professionals are casting the training and devel¬oping of international assignees into a much larger frame, one consistent with broader, more theoretical, and systematic description of IHRM, per Figure 10.1. For example, the family is now recognized as a very significant factor in expatriate success (Dowling, Schuler, and Welch 1994; Dowling, Welch and Schuler 1999; Adler 1997; Handler and Lane 1997; Harris and Brewster 1999b), particularly when dual¬-career issues are involved (Punnett, Crocker, and Stevens 1992; Reynolds and Bennett 1991; Hammer et al. 1998; Harvey and Buckley 1998; Harvey and Wiese 1998). Better paradigms (i.e., social learning theory) have begun to emerge concerning the impact and likely success of cross cultural training (Black and Mendenhall 1990; Porter and Tansky 1999; Downes and Thomas 1999). International HR planning is seen more often as a key orchestrator of expatriate career development, incorporating expatriate assignment decisions and the repatriation process (Black, Gregersen, and Mendenhall 1992; Black, Gregersen, Mendenhall and Stroh 1999; Tregaskis 1998).

Perhaps most indicative of this shift in perspective is the contention that training and development is no more important for PCNs than it is for indi¬viduals from other parts of the world (Adler and Bartholomew 1992). In fact, global firms can enhance their interunit linkages by creating a pool of global managers with citizenship from anywhere in the world (Fulkerson and Schuler 1992; Bartlett and Ghoshal 2000). Management development activities could be housed in corporate or global headquarters with local, regional, and other HR units assisting in pro¬gram design and delivery (Evans 1992; Scullion 1992; Vanderbroeck 1992; Tichy 1992; Bartlett and Ghoshal 1991, 1992; 1998; Dowling, Welch and Schuler 1999). The efficacy of this or other structural approaches remains an empirical question. A possible look at these issues might relate answers to the questionnaire in Table 10.2 to measures of MNE effectiveness.

Hi, this is Vishal. I need to research the various IHRM policies among different MNCs. If you could send some material specifically related to a company, it would be helpful.
Thanks.