International Human Resource Management

In the United States, we tend to focus more on traditional human resources management practices. However, any organization that conducts business outside of their original country is considered a Multi-National Enterprise (MNE) or Multi-National Corporation (MNC).

Therefore, it is critically important for companies (including those in the U.S.) to understand implications of International Human Resources Management. Here is a brief overview and introduction to IHRM.

IHRM (International Human Resources Management) goes beyond the traditional role of Human Resource Management.

·         Traditional Human Resource Management typically focuses on local customs alone

·         Traditional HRM professionals are least likely to take on international assignments      

·         And they may not operate as strategic partners in the internationalization of their firms

International Human Resource Management is the study and application of ALL human resource management activities within the global environment and basically it takes the traditional HRM role to an international level.

Again, any Organization that conducts business outside of their original country is considered a Multi-National Enterprise (MNE) or Multi-National Corporation (MNC). These organizations can be described as operating their businesses as either:

·         Multi-domestically

·         Internationally or

·         Globally

·         Transnational

And depending on a firm’s strategy, they can be categorized as either one of the above.  

 Multi-domestic strategies are for organizations that have a poly-centrism managerial style.  This means host country cultures and standards are more prominent than those of the home-country; and decentralization is emphasized where independent decisions and judgments are made based on local customs. This organizational strategy is likely to have more wholly owned subsidiaries (where independent companies have developed).   

Global business strategies are used when management uses their home-country standards to run their international activities (ethnocentrism).

Transnational organizations have a geo-centric mindset. Their managerial outlook involves creating a global network and a transnational strategy where they integrate various elements of their global organization into their business strategies.      

•      Ethnocentric orientations: Their IHRM practices for their international operations copy their parent-company practices and are very centralized.

•      Polycentric mindsets of firms: Their subsidiaries are left alone to follow the local HRM practices and their IHRM practices tend to be decentralized.

•      Geocentric firms: Are eclectic. They borrow best practices from around the world and they don’t necessarily choose customs of headquarters over local practices.

  Reference:  Briscoe, D., Schuler, R., Tarique, I. (2012). International Human Resources Management. New York, Routledge.