UNIT 1

INTRODUCTION TO GLOBAL
HRM
 Contents of Autonomous College
UNIT 1
• HRM at Global Perspective

• Distinction between Domestic and Global HRM

• HR Challenges at International level

• Challenges of Globalisation Implications of

Managing People and Leveraging Human Resources
 Contents of JNTUK College
UNIT 1
• A Global HR Perspective in New Economy
• Challenges of Globalisation
• Implications of managing people and leveraging Human Resources
• Strategic role of international HRM
• Global HR planning
• Staffing policy
• Training and Development
• performance appraisal
• International labour relations
• Industrial democracy
• Talent crunch
• Indian MNCs and Challenges
• Legal contents of Global HRM
 Global Perspectives
What is IHRM

• Global HRM can be defined as set of activities aimed

managing organisational human resources at
international level to achieve organisational
objectives and achieve competitive advantage over
competitors at national and international level.
 International HRM
International HRM is the process of:
• Procuring,
• Allocating, and
• Effectively utilizing human resources
• In a multinational corporation, while
• Balancing the integration and differentiation of HR
activities in foreign locations
Definition of IHRM:

• The human resources management concepts and

techniques employers use to manage the human
resource challenges of their international operations.
( G. Dessler )
• International human resource management is
concerned with the human resource problems of
multi-national firms in foreign subsidiaries with the
unfolding of HR issues that are associated with the
various stages of the internationalisation process.
( Boxall 1995 )
 Objectives of IHRM
• To reduce the risk of international human resources

• To avoid cultural risks

• To avoid regional disparities

• To manage diversifies human capital

 Need for GHRM
• To manage expatriates
• To have international orientation
• Effectively utilise services of people at
both the corporate office and at the
foreign plants
• To respect local culture
P v Morgans model of IHRM
 Needs for Broader Perspective
Pay issues
• Different countries, different currencies
• Gender based pay in Korea, Japan, Indonesia
Health insurance for employees & their families
Overtime working – Korean & Japanese firms
Promotions based on seniority or merit
Reasons for Growing Interest in IHRM

Globalization of Indirect cost of

Effective HRM
Business poor performance

Significance in
Movement to
implementing and
network
control of
organisation
strategies
 Growing interest in IHRM
• Globalisation of business leading to mobilisation of
resources
• Effective management of human resources
• To minimise the risk of underperformance or failure
in overseas assignments
• Implementation of international strategies by
competent managerial personal to man overseas
assignments.
 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.
• Domestic HRM is less complicated due to less
influence from the external environment. IHRM is
very complicated as it is affected heavily by external
factors such as cultural distance and institutional
factors.
 HRM and IHRM
• Complexity involved in operating in different
countries, varied nationalities of employees
• The different cultural environment
• The industry or industries with which the MNC is
involved
• Attitudes of senior management
• Extent of reliance of MNC on home country domestic
market
 Differences Between IHRM and HRM
IHRM
• Address a broad range of IHRM
activities
• HR issues related to employees
belonging to more than one
nationality
• Greater involvement of HR
manager in the personal life of
employees
• Greater exposure to risks in
international assignments
• Has to manage several external
factors such as government
regulations of foreign country
HRM
• Address a narrow range of HRM
activities
• HR issues related to employees
belonging to single nationality
• Limited involvement of HR
manager in the personal life of
employees
• Limited risks in domestic
assignments
• Limited external factors to deal
with.
 Major difference between domestic
HRM and IHRM
• Business activities
• Increased complexities
• Increased involvement in employees’ personal life
• Complex employee mix
• Increased risks
 HR CHALLENGES IN INTERNATIONAL
LEVEL
• Compliance with labour laws
• Talent acquisition
• Developing agile leaders
• Balancing local and home issues
• Building capability
• Efficient coordination and collaboration

• Retaining critical talent

• Sharing knowledge across borders

• Operating efficiently

• Improving productivity
• Compliance with labour laws:
Every company finds a challenge in working
with laws, regulations, and rules in another country.
These vary dramatically from one country to another
, and companies often need the help of good advisers
to unravel and comply with the different rules and
policies.

• Talent acquisition :
It is critical to acquire the people at the right
time, but finding the right talent for a “foreign
company” is sometimes a difficult task. Even simply
identifying and recruiting individuals can be a
challenge in another country.
• Developing agile leaders:
An organisation needs flexible leaders who
can adapt to the changes and challenges of
operating in a global environment. they must be able
to bring the local context and culture into their
decisions and relationships within each country.

• Balancing local and home issues:

Deciding which decision must be made locally
and which must be made at the headquarters is
critical. For example, financial accounting may be
kept at headquarters, while succession planning may
need to be more at the local level.
• Building capability:
Employees must understand the products and services
and how to produce or sell them. They must understand how to
communicate and integrate with others across borders in the
cultural context. learning and development can be different
from one country to another. For sustainability, capability must
be enhanced routinely in the organisation.

• Efficient coordination and collaboration:

A global company must be connected and orchestrated
in its work. Employees must be synchronized in their projects
and efforts, and they must collaborate on a routine basis. This
gets more different when different languages and long
distance are involved.
• Retaining critical talent:
some individuals in the organisation are
considered critical talent, and these are the people who
make the more difference. It is not always an executive
or a manager. It might be the IT team, the direct sales
force, the store managers, or the research and
development professional. The challenge is to retain this
critical talent in the organisation. High turnover can be
disastrous.

• Sharing knowledge across borders:

knowledge management and knowledge
sharing are important, particularly in a knowledge-based
company. Using all the tools for collaboration and
sharing is essential. Building databases that easily
integrate with each other is also important.
• Operating efficiency:
The products and services delivered must be
produced at a low cost to the organisation; otherwise,
competition will have an advantage. Efficiency is king,
and delays and bottlenecks have to be removed to make
a smooth work machine.

• Improving productivity:
In addition to lowering production costs, there
must be more output. The gross productivity of a firm,
revenue divided by employees, must be continuously
improved as technology is used, capability is enhanced,
and engagement and motivation kick in to deliver a very
powerful workforce.
 Strategies of GHRM
• The strategy demands global HR leadership with standard
system but local adaptation. The key underlying ideas are
to satisfy your company’s global human resources needs via
feeder mechanism at regional, national and local levels,
and to leverage your current assets to the fullest extent by
actively engaging people in developing their own careers.
Implementing these ideas can be broken down
into 10 steps. By taking these steps, a company
should be able to put into place an effective global
human resources program within three to four
years.

Break all the "local national" glass ceilings

 Trace your lifeline

Build a global database to know who and where your

talent is
Identify your leadership capital

Assess your bench strength

and skills gap

Recruit regularly

Advertise your posts internally

Institute succession planning

Challenge and retain your

talent
 Types of strategic policies
• Ethnocentric approach

• Polycentric approach

• Geocentric approach
 ETHNOCENTRIC APPROACH
• All key management positions are filled by parent
country nationals.
• One’s own culture is superior
• Overlooks important cultural factors
• Maintain a unified corporate culture
• Create value by transferring core competencies.
• Limits advancement opportunities for host countries.
• Leads to resentment, lower productivity, and high
turnover in employees.
• E.g : Pocter & Gamble ,Toyota & Matushita
 Polycentric approach
• Decentralized control
• Business units in different countries have autonomy from home
office, like a local Co.
• No standard forms or procedures
• Recruits host country nationals to manage subsidiaries, while
parent country nationals occupy key positions at corporate HQ.
• Firm is less likely suffer from cultural myopia.
• Less expensive to implement.
• Host country nationals have limited opportunities to
gain experience outside their own countries.
• Gap due to language barriers, cultural differences may
isolate corporate HQ from foreign subsidiaries.
 Geocentric approach
• It seeks the best people for key jobs, throughout
the organization, regardless of nationality.
• Hybrid of Ethno and Poly.
• Based on informed knowledge of home and host
countries.
• Enables firms to make best use of its HR.
• Helps building a strong unifying corporate culture
and informal management network.
• Reduces cultural myopia.
• Enhance local representativeness.
 BARRIERS OF GHRM
• Worldwide Variations
• Social, political and economic
circumstances
• Human Resource Functions
• HR functions varies according to
country
• Attitude and Actions
• Attitude and actions of
headquarters towards HR
• Cultural Differences
• In learning and teaching styles
 Barriers of GHRM
• Resistance to change
• Different locations different way of doing
things
• HR practice that works in one country
may be unacceptable in another
• As transactional personnel department
• As business partner
• Difficult to gain acceptance
Thank you