Question 1: Similarities and Differences of Domestic HRM and IHRM
In broad terms, IHRM involves the same activities as domestic HRM however, domestic HRM is involves with employees within only one national boundary. Some of the major differences of IHRM to domestic HRM are:
o IHRM encompasses more functions
o IHRM has more heterogeneous functions
o IHRM involves constantly changing perspectives
o IHRM requires more involvement in employees’ personal lives
o IHRM is influenced by more external sources
o IHRM involves a greater level of risk than typical domestic HRM (1991 cited in 2002)
Compared to domestic HRM, IHRM requires a much extensive perspective on even the most common HRM activities. IHRM personnel must deal with issues such as international taxation; international relocation and orientation; various other administrative services for expatriates; selecting, training and appraising local and international employees; and managing host-government relations. In the subsidiary level, the HRM personnel are more involved in the employees’ personal lives. Subsidiary HRM personnel often arrange housing, health care, transportation, education, and recreational activities for both expatriate and local employees. IHRM activities are also affected by more external forces than are domestic HRM activities. Subsidiary HRM personnel may have to deal with government ministers, other political figures, and a greater variety of social and economic interest groups than would normally encountered in purely domestic HRM ( 2002).
Question 2: Two IHRM activities that are not done in Domestic settings
Question 3: Greater involvement in Employees’ personal lives in IHRM
Question 4: Stages of Internationalization and their impacts on HR Functions
There are different strategies that an international business (IB) employs in going international. The internationalization of an international business has varying degrees. These are international; multinational or multi-domestic; regional; global; and transnational.
International
At this stage, a firm makes the initial decision to expand internationally. The initial stage may involve import or export to or from another country. The international business activity at this level will have very little on the overall business and will not receive much management attention. The HR impact will be fairly limited, with the firm relying on a few key managers and technical experts to negotiate overseas linkages and to transfer technology, if necessary, to a licensee or subcontractor.
Multinational
At this level of international strategy, a firm decides to establish subsidiaries in multiple countries, with these subsidiaries typically operating independently within each country, independently of operations in other countries, and often fairly independent, even, of the parent-company headquarters. During this stage, the company’s operations outside the home country is becoming diverse and more important to the overall organization performance. Due to diversity and importance of operations in other countries, coordination is becoming essential. The organization needs to integrate the operations and policies of subsidiaries to those of the parent firm. Each subsidiary concentrates on the market where it is located. The HR department’s role at this stage becomes complex and difficult. The HR department must coordinate HRM activities and practices of the subsidiaries, seeking both consistency with the culture and policies of the parent company and accommodation of local values and practices. In addition, training for international assignees, local nationals and parent-company employees to handle foreign assignments and interaction with foreign counterparts will increase dramatically.
Regional
In an alternative to the multi-domestic strategy, a firm may decide initially to conduct its international business on a regional basis. The regional growth strategy may involve establishing business operations in one of two regions. The HRM impacts in regional enterprises are similar to those in multinational enterprises, although they will be managed from a regional headquarter.
Global
Companies that have reached the stage wherein their operations become blind to national borders are referred to as ‘global’ enterprises. The global level, HR activities must change. Employees are hired everywhere in the world, wherever the necessary skills, training and experience can be found. Worldwide policies are developed and implemented for many aspects of HR responsibility, possibly based on practices followed in numerous places around the world.
Transnational
The transnational firm, like the global firm has a global focus. However, transnational firms differ from global firms in that rather than developing global products and services, the transnational works hard to localize, to be seem not as a global firm but as a local firm, although one that draws upon global expertise, technology, and resources.
Question 5: Global Manager and Global Mindset
Question 6: Most Important factors in the Selection Decision
Question 7: Approaches to IHRM
The staffing challenges for international assignments are broader in scope than those for domestic staffing. There are different approaches to the management of International human resources. These are as follows:
- Ethnocentric – the home country attitudes, management style, knowledge, evaluation criteria, and managers are superior to anything the host country might have to offer.
- Polycentric – there is a conscious belief that only host country managers can ever really understand the culture and behavior of the host country market; therefore, foreign subsidiary should be managed by local people.
- Geocentric – based on the assumption that the best manager or other employee for any specific position anywhere on the globe may be found in any of the countries in which the organization operates.
These three sets of multinational values translate into three broad international staffing policies or sources for staffing international operations. First, the company can send people from its home country. These employees are often referred as expatriates. Second, it can hire host-country nationals, natives of the host country, to do the managing. Third, it can hire third-country nationals, natives of a country other than the home country or the host country. These sources of overseas workers have different advantages (2002).
- Host country nationals – less cost, preferred by host-country governments, intimate knowledge of environment and culture, and language facility
- Home country nationals – talent available within company, greater control, company experience, mobility, experience provided to corporate executives
- Third country nationals – broad experience, international outlook, and multilingualism
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