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Group:- 13

Group members

Dhara Mehta 20
Maunil Sheth 38
Heena Soni 40

International Human Resource Management

In simple words International Human resource management is 'process of managing


people in international settings'.

It is also said as IHRM. IHRM can be defined as set of activities aimed managing
organizational human resources at international level to achieve organizational
objectives and achieve competitive advantage over competitors at national and
international level. IHRM is the management of HR in business operations in atleast two
nations.
Scyllion (1995) defined IHRM as ‘the HRM issues and problems arising from the
internationalization of business, and the HRM strategies, policies and practices which
firms pursue in response to the internationalization process

Difference between IHRM and HRM


 IHRM

• Address a broad range of HRM activities.


• HR issues relate 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 relate 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.

Common IHRM practices


• International staffing
• Pre-departure training for international assignments
• Repatriation
• Performance management in international assignments
• Compensation issues in international assignments
Recruitment Process in International HRM

Ethnocentric Approach
• Key management positions held by parent- country nationals
• Appropriate during early phases.
Polycentric Approach
• Host-country nationals hired to manage subsidiaries
• Parent-country nationals occupy key positions at corporate HQ. Geocentric Approach
• Seeks best people for key jobs, irrespective of nationality
• Underlying principle of a global corporation.Regiocentric Approach
• Variation of staffing policy to suit particular geographic areas
• Provides a 'stepping stone' for a firm wishing to move from an ethnocentric or
polycentric approach to a geocentric approach.

EFFECTIVE IHRM IMPLEMENTATION

1. As certain the current and intended nature of international operations in the


organisation (multi- domestic, international, global or transnational)
2. Determine the extent to which HR policies and practices should be standardised or
localised in accordance with overall organisational strategy.
3. Assess the extent to which local cultural, social, political, economic and legal factors
will impinge on any attempts to apply standard HR policies if integration is a key factor in
organisational strategy.
4. Ensure a computerised database of global human resources is used if integration is
desired.
5. Work with the senior management team to identify the competencies required to
achieve global organisational objectives. 6. Work with national HR and line managers to
formulate IHR policies and practices in the key areas of sourcing, development and
reward which will embed a transnational mindset in the organisation.

Companies adopting IHRM approach

AVON
General Electrics
Wipro
Reebok
Coco Cola
Honda
Toyota

AVON

The company adopted the use of the internet so as to make its sales. This strategy
enabled the company to venture into the international markets with ease.
• The IHRM, having noted the increasing international markets, increased its workforce
to integrate diverse cultures.
• This has earned the company a reputation for hiring employees from minority groups
and cultures.
• Training was also enhanced so as to ensure that the sales people have the right sales
know how and sales knowledge to foster profits. IHRM has also adopted on job training
sessions as well a regular leadership program aimed at ensuring that the company has
the best and well trained workforce.
• The IRHM has also focused on hiring female executives to run the company. This
assures the female consumers that the company does in deed have an understanding of
their needs.

Actual case of Implementation of IHRM

Coco Cola

Coca Cola was invested in May 1886 by Dr. John S. Pemberton in Atlanta, Georgia.
Currently, its operations are in more than 200 countries, and with diverse work force of
approximately 55,000 employees.

The strategic vision of the company is to achieve five strategic goals: Profit, people,
value, partners and planet.

One of the above strategic is people, which is the most important element in Coca Cola
as people are the workforce which operates the whole work. Moreover the company
gives its attention to the HRM to control the human functions and roles and to be
aligning with the company's senior strategy. In line with the higher objectives of the
company, human resources management seriously seeking to get the best management
achieve the objectives of the company. For these reasons, IHRM should define know the
structure of the company as a global.

Company's structure
The home country of Coca Cola is USA it controls both of centralization and
localization's functions. Senior decisions at The Coca Cola Company are made by an
Executive Committee of 12 company Officers. This committee helped to shape the
strategic priorities. The chair of the executive committee acts as a head for the company
and chairs the board meetings. He is also the Chief Executive Officer (CEO) and as
such he is the senior decision maker. Other executives are responsible either for the
major regions (e.g. Africa) or have an important business specialization for example the
Chief Financial Officer.

There are seven main regions where Coca Cola operates in as the following:

North America, Africa, Asia, Europe, Eurasia, Middle East, Latin America. Each region
has divided into countries and each country has its own structure the following figure
explains the structure of Coca Cola in Great Britain.

IHRM concepts in Coca Cola's practices and reasons to transfer employees to the
host countries

Staff selection, international assignments, international training and development,


international compensation, and IHRM in the host Country context are some key
concepts of the international practices which Coca Cola's HRM is responsible to deal
with. And it is important to know the reason of transferring people from a region to
another among Coca Cola parent company, host countries and subsidiaries.

The reason of sending staff for international assignment in Coca Cola is to achieve three
major goals within short and long terms: to fill positions, develop the management and to
fulfil Coca Cola's development. (Hartono 2009)

The following table shows the reasons of transferring staff from the parent country of
Coca Cola to the host countries (e.g. china).

Why does Coca Cola transfer staff from the parent country (USA) to the host
countries
Transfer of technical or Managerial knowledge, training of subsidiary managers, or lack
of qualified local personal

(Position Filling)
Level of education in host country is low
Subsidiary is young
Subsidiary is Greenfield establishment
Gain international experience
develop global awareness

(Management Development)
MNC is more internationalized
MNC is large
Control and coordination of subsidiary operations

(Organizational Development)
Uncertainly avoidance in home country is high
Level of cultural distance between home country and host country is high
Level of political risk in host country is high
Subsidiary is large
Subsidiary is majority-owned
Subsidiary is higher in corporate reporting chain Subsidiary is young
Subsidiary is under-performing
improvement of communication channels between head quarter and subsidiary

(Organizational Development)
Level of cultural distance between home and host country is high
Level of political risk in host country is high
Subsidiary is young.

Selecting staff for global assignments in Coca Cola


Hartono (2009) argued that studies explained that selecting employees for global tasks
to achieve international specific jobs is difficult. Also wrong selection may lead to
significant problems. Therefore Coca Cola developed its own system for careful
selecting employees, in this system the company determines carefully the appropriate
persons for each assignment. (Slavenski 2003)

In Coca Cola they always give enough time to assess employees they wish to go for an
international assignment. First step is to receive applications from the employees who
find that he is qualified for the task. Then conduct five hours assessment for all the
applicants to identify the following nine skills:
1. Organizing and planning
2. Perception and analysis
3. Decision making
4. Oral communication
5. Decisiveness
6. Adaptability
7. Interpersonal skills
8. Written communication
9. Perseverance

Second step is to determine the best applicants who have succeed in the first
assessment and ask them to return next day for the organizational orientation, also there
is three days of training for the line managers who are responsible for this selection. In
Coca Cola usually the third step is an interview to select one of three applicants to do
the international assignment.

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