Chapter 1 Introduction The Enduring Context of IHRM

Chapter 1 Introduction: The Enduring Context of IHRM IBUS 618 Dr. Yang 1

The Year of Rooster, 4702 Happy New Year! 01/31/1957 to 02/17/1958 (Fire) 02/17/1969 to 02/05/1970 (Earth) 02/05/1981 to 01/24/1982 (Metal) 01/23/1993 to 02/09/1994 (Water) 02/09/2005 to 01/28/2006 (Wood) 01/28/2017 to 02/15/2018 (Fire) IBUS 618 Dr. Yang 2

IBUS 618 Dr. Yang 3

Chapter Objectives n In this introductory chapter, we establish the scope of the textbook: Define key terms in IHRM Outline the differences between domestic HRM and IHRM Identify the variables that moderate these differences And discuss trends and challenges in the global work environment and the enduring context in which IHRM functions and activities are conducted, including the way in which forces for change affect the operations of the internationalizing firm and have consequences for the management of people in the multinational context. IBUS 618 Dr. Yang 4

Three Approaches to IHRM n Cross-cultural management n Examine human behavior within organizations from an international perspective n Comparative HRM and Industrial Relations n Seeks to describe, compare and analyze HRM systems and IR in different countries n HRM in multinational firms n Explore how HRM is practiced in multinationals IBUS 618 Dr. Yang 5

Interrelationships between Approaches to the Field IBUS 618 Dr. Yang 6

The General Field of HR n Major Functions and Activities n Human resource planning n Staffing n n n Recruitment Selection Placement Performance management n Training and development n Compensation (remuneration) and benefits n Industrial relations n IBUS 618 Dr. Yang 7

What does IHRM add into the Traditional Framework of HRM? n Types of employees n n n Within and cross-cultural workforce diversity Coordination Communication n Human resource activities n n n Procurement Allocation Utilization of human resources n Nation/country categories where firms expand operate n n n Host country Parent country Third country IBUS 618 Dr. Yang 8

A Model of IHRM IBUS 618 Dr. Yang 9

What is an expatriate? n An employee who is working and temporarily residing in a foreign country n n Some firms prefer to use the term “international assignees” Expatriates are PCNs from the parent country operations, TCNs transferred to either HQ or another subsidiary, and HCNs transferred into the parent country n Global flow of HR IBUS 618 Dr. Yang 10

International Assignments Create Expatriates: IBUS 618 Dr. Yang 11

Differences between Domestic HRM and IHRM n More HR activities n The need for a broader perspective n More involvement in employees’ personal lives n Changes in emphasis as the workforce mix of expatriates and locals varies n Risk exposure n Broader external influences IBUS 618 Dr. Yang 12

Variables that Moderate Differences between Domestic HR and IHRM IBUS 618 Dr. Yang 13

The “Top Ten” Multinationals 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Rio Tinto (UK/Australia) Thomson Corporation (Canada) ABB (Switzerland) Nestlé (Switzerland) British American Tobacco (UK) Electrolux (Sweden) Interbrew (Belgium) Anglo American (UK) Astra. Zeneca (UK) Philips Electronics (The Netherlands) IBUS 618 Dr. Yang Source: UNCTAD Index of Transnationality 14

Forces for Change n Global competition n Growth in mergers, acquisitions and alliances n Organization restructuring n Advances in technology and telecommunication IBUS 618 Dr. Yang 15

Impacts on Multinational Management n Need for flexibility n Local responsiveness n Knowledge sharing n Transfer of competence IBUS 618 Dr. Yang 16

Managerial Responses n Developing a global “mindset” n More weighting on informal control mechanisms n Fostering horizontal communication n Using cross-border and virtual teams n Using international assignments IBUS 618 Dr. Yang 17

Factors that Influence the Global Work Environment IBUS 618 Dr. Yang 18

Chapter Summary (cont. ) n We have established the scope of the textbook: n Defined IHRM and the term “expatriate”. n Discussed major differences between domestic HRM and IHRM – looking at six factors: n n n More HR activities Need for a broader perspective More involvement in employees’ personal lives Changes in emphasis as the workforce mix of expatriates and locals varies, Risk exposure and More external influences IBUS 618 Dr. Yang 19

Chapter Summary (cont. ) n Examined the enduring context of IHRM. The focus is on the current global work environment, looking at forces for change, requirement for MNE and managerial responses that have implications for the way in which people are being managed in multinationals at the turn of the 21 st century. n This treatment has enabled us to provide an overview of the field of IHRM and to establish how the general environment affects IHRM. n The next chapter examines the organizational context where we explore how IHRM activities are determined by, and influence various internal changes as the firm internationalizes. IBUS 618 Dr. Yang 20