Unit-14 (Fourteen)

INTERNATIONAL HRM

Due to the increasing trend of globalization, number of organizations of many countries are
operating in different countries. Liberalization policy of developing countries has attracted many
foreign direct investment as well as many multinational companies. In these companies people of
many countries work together. Due to the competition in the global market- internationally oriented
management practices have emerged and been adapted. IHRM is now of growing
concern/importance for the companies that are operating or going to operate with the trend of
globalization.

The HRM issues and problems arising from the internationalization of business, and the human
resource strategies, policies and practices which firms pursue in response to the internationalization
process.

HR issues in international business:

1. Selection & appointment

Recruitment policy
- Ethnocentric: recruitment from parent country nationals
- Polycentric: from host countries nationals
- Geocentric: recruitment regardless of nationality
- Regiocentric: recruitment made on the basis of regional needs
2. Criteria for selection: some of the most important criteria are- domestic employment record,
technical & management expertise, language proficiency, family support, previous international
experience & ability to operate independently.
3. Selection system
4. Preparation & training- what sort of special training do overseas candidates need four step
approaches
Level-1: training focuses on the impact of cultural differences & on raising trainees awareness of such
differences & their impact on business outcomes.
Level-2: aims at getting participants to understand how attitudes are formed & how they influence behavior
Level-3: training provides factual knowledge about the target country, while
Level-4: provides skill building in areas like language and adjustment and adaptation skills.
Trends in expatriate training- first rather than providing only predeparture cross-cultural training,
more firms are providing continuing, in-country cross-cultural training during the early stages of an
overseas assignment. Second, employers are using returning managers as resources to cultivate the
global mind-sets of their home office staff. Third, there is also increased use of software & internet
for cross-cultural training.

5. Compensation- cost of living criteria, hardship allowances & others

The balance sheet approach- to equalize purchasing power across country. The basic idea is that each
expatriate should enjoy the same standard of living s/he would have at home.
Incentives
6. Performance evaluation-

7. Repatriation- this is the problem of returning home after success or failure in the foreign
assignment. If an organization fails to foresee the problems of repatriation, it will bring another big
problem on the part of expatriates as well as the organization itself.

Five factors important in international assignee success & their components:

1. Job knowledge & motivation- managerial ability, organizational ability, imagination,

creativity, administrative skills, alertness, responsibility, industriousness, initiative & energy,
high motivation, frankness, belief in mission & job, perseverance
2. Relational skills- respects, courtesy & fact, display of respect, kindness, empathy, non-
judgmental, integrity, confidence
3. flexibility/ adaptability- resourcefulness, ability to deal with stress, flexibility, emotional
stability, willingness to change, tolerance for ambiguity, adaptability, independence,
dependability, political sensitivity, positive self image
4. Extra-cultural openness- variety of out side interests, interest in foreign culture, openness,
knowledge of local languages, outgoingness & extroversion, overseas experience
5. Family situation- adaptability of spouse and family, spouses positive opinion, willingness
of spouse to live abroad, stable marriage