This topic starts with Linda Maund's (2005) statement that International Human Resource Management is better than Human Resource Management. For any multinational organisation, Human Resource Management is a key to success. Human Resource Management deals with investment in people by connecting it with the organisations main objectives. Therefore, human resource management is crucial for the survival, success and performance of the enterprise. International organisation deals with many complicating things like multicultural assumptions, legislation, external and internal environmental factors which are affecting the organisation. That is why Linda Maund stated, "IHRM is better than HRM". But then it depends on the nature of business. The main purpose of international human resource management is to enable the firm at the multinational level. At the global level company have to compete throughout the world, not only locally but also be responsive globally, it should be flexible within the different regions, must be capable of transferring knowledge through there globally circulated companies. And with all these objectives multinational company must be efficient to do all this things within time limit. That is why there is a critical need arise for effective IHRM. An effective IHRM can make the multinational company continue to exist or vanished. So there are always issues arising from every side in context to IHRM. There are three major issues of IHRM. (1)Functions, (2) Policies and (3) Practices. These are the result to strategic activities. (Schuler R. S. & Jackson S. E. (1999)
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By Scullion (1995) IHRM defines as, "the human resource management issues and problems arising from the internationalization of the business and the human resource management strategies, policies and practices which firm pursue in response to the internationalization process."
According to Briscoe and Schuler (2004), "IHRM is about understating, reaching and applying and receiving all human resources activities in their internal and external contexts as they impact the processes of managing human resources in the enterprise throughout the environment to enhance the experience of multiple stakeholders and .........."
Scullion and Briscoe and Schuler, all of them are agreeing on the functions of international human resources are broader than human resource management. Scullion is more emphases on internationalization process, which includes all most everything for a firm to purse for globalized market. Legislation of different regions, resource gathering, employment and education level of different countries, competition of foreign market and many more things can be taken into considerations. These features are not considered in domestic human resource management. So we can say that international human resources management has broader concept than human resource management. Briscoe and Schuler have taken some external factors which are affecting in the human resource processes. Like cultural factors and ethics. These factors are more likely to being affected to the work force of the organisation. This can change their workplace behaviour. But for this firms need to have basis information of different regions. So that, they can build their human resource strategy. Domestic human resource is only focusing on the domestic parts which are most likely for being engaged with their business. All of them consider that international human resource management has more features than human resource management. Therefore we can consider that they are agreeing with Maund's statement that IHRM is better than HRM. Now let's see what the features of IHRM and HRM are.
According to Harris, Brewster and Sparrow (2004), IHRM is generally covered under three headings:
Cross cultural management:
It is one of the key factors in today's internationalization of employment. HR managers consider the cultural differences, values and attitudes. According to the authors, there are research evidences that show that, how different values affect the people working in an organization. The way of doing their work and managing work. Therefore, it is essential for HR managers to take part in the processes of recruitment and selection, training and development, reward and appraisal. All of it may be affected by respective countries. According to the nature of business great care must be taken whether to adopt the standard HR policies or not. Businesses like production and services providers they need to take care while doing these processes for greater performance level. Like if one company from India provides telecommunication service to Britain than the employees of India need to know the values and cultural differences to provide better service to Britain.
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Comparative human resource management:
It is basically focuses on in what way people work and explores the differences between nations in a way that they manage the process. Comparative human resource management includes differences between areas within a country of different regions of the world. Like China and Africa. Africa is way to huge than China in region but Chinese economy is more boomed than Africa's. Their languages are different; labour markets are different, education, employment laws, trade union and different cultural expectations. HR managers have to consider all of the external factors as well as internal while doing HR process.
International human resource management.
It examines how international organizations manage their human resources across these different national contexts. It also adds extra complexity in the management beyond that found national settings. Manager need to manage their process in different nations and regions of the world in a way that makes cost-effective management. Therefore, managers have to deal with not only variety of practices but also different types of policies and strategy issues. It should be managed in a way that can give higher performance results.
Now there is one question emerges. Why international human resources management is gaining importance?
In the past few years there has been seen some increasing global competition, which is the reason for the increasing multinational companies. This may result neck throttling competition between them. New companies try to use various tactics to penetrate the market while old companies try to cut them as they arise. By Pucik, Valdimir and Saba(1998).
International HRM will have more financial cost rather than domestic HRM companies. There are proofs of that. It happens because many companies lack the knowledge of the complexity of HRM. At international level there are always more problems than domestic level. That is why some newly energies international companies are facing critical financial problems. ( Pucik & Saba(1998)).
By competitive advantage in international business is effectively managing human resource internationally with increasing knowledge. (Briscoe and Schuler 2004).
The implementation of international business strategies depends on the developing human resource strategies of the companies for recruitment and development of their mangers. So that they can become highly skilled and be more productive. (Tayeb (2005)).
US investors are directly investing in the company while the single European Market is emerging in the rapid growth. And on the other end IHRM issues are becoming more important than traditional MNEs. While there are many smaller and medium size SMEs are increasing their operations in last few years (Scullion (1995).
Briscoe, Schuler & Claus(2009) have found some factors which drives the interest of organization for becoming globalize:
Increased Travel: travel has become much easier, quicker and cheaper. People travel different countries and they came to know about different countries lifestyle and way they manage their businesses. New services which they haven't seen in their home country. That's how many people decide to take an opportunity by developing their business to a global level.
Rapid global communication: global communication has become much easier and cheaper. Like television, music, movies, telecommunication and internet which can spread information to all over the world. It helps to increase the quality of life.
Rapid development of technology: because of the rapid changing technology modern transportation, education and communication are made available everywhere. By the use of new technology manufacturing products become fast and with improved quality. Like nowadays most of the cars build with the help of machines and new technologies.
E-commerce: it is one of the biggest revolution. The worldwide web, credit cards, global transportations and logistic services are possible to conduct business by sitting anywhere in the world. Like e-bay and Amazon which are the most popular web sites for E-commerce.
Human resource management have largely replaced personnel management. We all know about that. According to Armstrong (2007), "a strategic and coherent approach to the management of an organisation's most valued assets- people working there who individually and collectively contribute to the achievement of its objectives."
Some of main functions of HRM are as under:
HR philosophies for overarching values, guiding and managing people.
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HR strategies defining the direction in which HRM intends to go.
HR policies, values, principles and strategies implemented in specific areas of HRM.
HR processes which put HR strategic plans and policies into effect.
HR practices comprising the informal approaches used in managing people.
HR programmes which enables HR strategies, policies and practices to implement according to plan.
HRM's main focus on upbringing the performance of an organization by controlling the inner functions of it. Basically, it is much more related with people who work in the firm. Managing people effectively will greatly enhance the performance level. HRM processes includes recruitment and selection which leads to performance phase where HRM deals with reward and appraisal with training and development. It is also known as human resource cycle. Armstrong(2007) has also highlighted the Harvard model for HRM, which is as under:
The above mentioned HRM model covers most of the aspects which are likely to effect to an organisations. Moreover, it incorporates range of stakeholder's interests. It recognizes the importance of explicitly and implicitly between employer and employees. It includes employee's influences and organization of work and associated questions of supervisory style. Reward management engaging employees motivation and job commitments by introducing policies and procedures and also ensures that people are getting rewarded for they do. HRM provides great employee relationship to create a harmonious climate between management and their trade unions. HRM helps to provide diverse needs by taking into account of individual and group differences in employment.
Armstrong (2007) also highlighted the characteristics of HRM:
Strategic with an emphasis on integration.
Human capital. Consider employees as an asset.
A management driven activity - the delivery of HRM is a line management responsibility.
Focused on business values.
RECUITMENT AND SELCTION IN IHRM CONTEXT.
According to Edward and Rees (2006), this is one of the extremely significant issue in IHRM, because if it fails to choose wrong person than it will cost not only the HR manager but also for the company. Assigning a wrong person can give bad image of the organisation. Because multinational company deals with different region's company. HR manager need to indentify the key traits of the required individuals. Recruitment should be according to the need of the company concerning the position and the appropriate candidate.
While, selection involves choosing the right person for the right position from those who have been recruited. Candidate must be selected by evaluating skills and attributes. Region place do matters a lot in that. Like if selecting an international manager who will be working closer to home. The benefit will be local manager will know the place better that any foreign manager. Authors had also pointed out some of the main points for recruitment of international manager:
There is a universal approach to management.
People can acquire multicultural behaviours without outside help.
There are some common characteristics among all successful international managers.
There are no impediments to mobility.
Well again it depends on the nature of business and company. If the vacancy if for relationship managers than recruiters should choose someone from local area which appropriate knowledge. While the business IT related than recruiters should take person with appropriate IT knowledge and experience.
The length of the assignment must be considered too. If the assignment is involved with travelling than it is likely to be selecting appropriate local person instead of outsider. But then again it depends on the circumstances of the assignment. If it is IT with travelling related than selected person should be taught with new knowledge of technology. Before that HR managers must consider some questions. Like what are the needs of the firm? What sort of role does the person need to play in the assignment? How will they required to play? Only after answering these questions candidate must be chosen. After that HR managers need to check that how the expatriate is treated, how will they carry out their duties? It should be done to confirm the success of the assignment. Recruitment and selection involves some external factors too. Like employment law of different regions, education level, environment, technology availability and human workforce. These are some of the main points which make the difference between IHRM and HRM in recruitment and selection.
All the above mentioned discussion shows that Maund's statement is quite right. IHRM is better than HRM. Different authors shows the benefits of IHRM which gives the idea that IHRM covers all the aspects of HRM. Moreover, it also focuses more on cultural values and ethics of different regions. And according me those are the factors that attract organizations for being globalized. Learning and understand new and different culture and benefits inspires local entrepreneurs to develop their business globally. Dowling, Festing and Engle (2008), highlight some basic differences between IHRM and HRM.
More HR activities.
The need for broader perspective.
More involvement in employees personnel lives.
Changes in emphasis as the workforce mix of expatriates and local varies.
Broader external influences.
Ethic is also one of the key issues to discuss in this topic. HR managers need to develop a friendly working environment for new