C1P1 - Global HRM
Introduction to International HRM (IHRM)
Key Vocabulary:
Core Concepts:
o HRM, IHRM: Human Resource Management, International Human Resource
Management.
o Employee Categories:
PCN: Parent Country Nationals.
HCN: Host Country Nationals.
TCN: Third Country Nationals.
o Expatriates: Includes international assignees, inpatriates.
o Repatriation: The process of returning expatriates to their home countries.
o Tax Equalization: Ensures expatriates do not experience significant tax disadvantages
or advantages.
Key Practices:
o Diversity, inclusion, equity issues.
o Psychological contract: Implicit expectations between employer and employee.
Cultural Concepts:
o Culture Shock: The stress and disorientation faced when adapting to a new culture.
o Emic and Etic:
Emic: Culture-specific aspects.
Etic: Universal behaviors across cultures.
Business Models:
o Porter’s Value Chain Model, organizational culture.
Definitions of IHRM
1. Stahl-Björkman-Morris Definition:
o Covers managing the global workforce to enhance firm outcomes.
o Focuses on HR issues across various parts of multinational enterprises (MNEs).
o Includes comparative analysis of HRM practices in different countries.
, 2. Morgan’s 3-D Model of IHRM:
o Activities: Procurement, allocation, utilization of human resources.
o Locations:
Host Country: Subsidiary location.
Parent Country: Firm’s headquarters.
Third Countries: Additional sources for labor, finance, and inputs.
o Employee Categories:
HCNs: Locals working in subsidiaries.
PCNs: Nationals working at subsidiaries or HQ.
TCNs: Individuals from countries other than the host or parent country.
HRM Activities in IHRM
1. HR Planning: Forecasting future HR needs.
2. Staffing: Recruitment, selection, and placement.
3. Performance Management: Monitoring and evaluating employee performance.
4. Training and Development: Enhancing skills for global roles.
5. Talent Management:
o Includes employee and industrial relations.
6. Compensation and Benefits: Tailored to international standards.
International Assignments and Expatriation
1. Figure 1.2: Highlights how expatriates work across parent (HQ), host (subsidiary), and third-
country locations.
2. Types of Expatriates:
o Flexpatriates: Short assignments (<3 months).
o Short-Term Expatriates: Assignments up to 1 year.
o Long-Term Expatriates: Assignments over 1 year.
o Self-Initiated Expatriates: Voluntarily moving for work.
Complexity of IHRM vs. Domestic HRM
1. Additional IHR Activities:
, o International taxation management.
o Administrative support for expatriates.
o Relations with host-country governments.
o Language translation services.
o International relocation and orientation:
Pre-departure training.
Immigration, travel, and housing logistics.
Taxation and compensation details.
2. Broader Perspective:
o Programs must address international legal, cultural, and equity considerations.
3. Personal Life Involvement:
o Addressing housing, healthcare, marital status, and child education needs.
4. Shifts in Emphasis:
o Adjusting strategies as the mix of PCNs, HCNs, and TCNs evolves (e.g., relying more
on trained locals).
5. Risk Exposure:
o Risks include terrorism, inability to adapt, and high costs of assignment failure:
Direct costs: Relocation, salary, and training.
Indirect costs: Loss of market share, strained host-country relations, and
psychological impacts.
6. External Influences:
o Government policies, economic conditions, and accepted business practices shape
IHRM.
Critical Considerations
1. Equity in Compensation:
o Ensure pay matches employees’ expectations.
2. Cross-Cultural Understanding:
o Recognize and respect cultural differences to manage effectively.
3. Global Mindset:
o Necessary for senior management to support internationalization.
Introduction to International HRM (IHRM)
Key Vocabulary:
Core Concepts:
o HRM, IHRM: Human Resource Management, International Human Resource
Management.
o Employee Categories:
PCN: Parent Country Nationals.
HCN: Host Country Nationals.
TCN: Third Country Nationals.
o Expatriates: Includes international assignees, inpatriates.
o Repatriation: The process of returning expatriates to their home countries.
o Tax Equalization: Ensures expatriates do not experience significant tax disadvantages
or advantages.
Key Practices:
o Diversity, inclusion, equity issues.
o Psychological contract: Implicit expectations between employer and employee.
Cultural Concepts:
o Culture Shock: The stress and disorientation faced when adapting to a new culture.
o Emic and Etic:
Emic: Culture-specific aspects.
Etic: Universal behaviors across cultures.
Business Models:
o Porter’s Value Chain Model, organizational culture.
Definitions of IHRM
1. Stahl-Björkman-Morris Definition:
o Covers managing the global workforce to enhance firm outcomes.
o Focuses on HR issues across various parts of multinational enterprises (MNEs).
o Includes comparative analysis of HRM practices in different countries.
, 2. Morgan’s 3-D Model of IHRM:
o Activities: Procurement, allocation, utilization of human resources.
o Locations:
Host Country: Subsidiary location.
Parent Country: Firm’s headquarters.
Third Countries: Additional sources for labor, finance, and inputs.
o Employee Categories:
HCNs: Locals working in subsidiaries.
PCNs: Nationals working at subsidiaries or HQ.
TCNs: Individuals from countries other than the host or parent country.
HRM Activities in IHRM
1. HR Planning: Forecasting future HR needs.
2. Staffing: Recruitment, selection, and placement.
3. Performance Management: Monitoring and evaluating employee performance.
4. Training and Development: Enhancing skills for global roles.
5. Talent Management:
o Includes employee and industrial relations.
6. Compensation and Benefits: Tailored to international standards.
International Assignments and Expatriation
1. Figure 1.2: Highlights how expatriates work across parent (HQ), host (subsidiary), and third-
country locations.
2. Types of Expatriates:
o Flexpatriates: Short assignments (<3 months).
o Short-Term Expatriates: Assignments up to 1 year.
o Long-Term Expatriates: Assignments over 1 year.
o Self-Initiated Expatriates: Voluntarily moving for work.
Complexity of IHRM vs. Domestic HRM
1. Additional IHR Activities:
, o International taxation management.
o Administrative support for expatriates.
o Relations with host-country governments.
o Language translation services.
o International relocation and orientation:
Pre-departure training.
Immigration, travel, and housing logistics.
Taxation and compensation details.
2. Broader Perspective:
o Programs must address international legal, cultural, and equity considerations.
3. Personal Life Involvement:
o Addressing housing, healthcare, marital status, and child education needs.
4. Shifts in Emphasis:
o Adjusting strategies as the mix of PCNs, HCNs, and TCNs evolves (e.g., relying more
on trained locals).
5. Risk Exposure:
o Risks include terrorism, inability to adapt, and high costs of assignment failure:
Direct costs: Relocation, salary, and training.
Indirect costs: Loss of market share, strained host-country relations, and
psychological impacts.
6. External Influences:
o Government policies, economic conditions, and accepted business practices shape
IHRM.
Critical Considerations
1. Equity in Compensation:
o Ensure pay matches employees’ expectations.
2. Cross-Cultural Understanding:
o Recognize and respect cultural differences to manage effectively.
3. Global Mindset:
o Necessary for senior management to support internationalization.
