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Introduction to Human Resource Management


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Chapter 3 : International Human Resource Management

Concept of IHRM, Approaches to IHRM, Ethnocentric Approach, Polycentric Approach, Geocentric Approach, Features of IHRM, Increased Complexity of HR Activities, Cultural Awareness and Tolerance, Stronger Relationship with Employees and their Families, Different Expectations and Requirements of Employees Across Cultures, Management of Cross-cultural Teams, Diluted Risk on the Business Front and Increased Risk on the People Front, Importance of IHRM, Factors Affecting IHRM, National Culture, Political Forces, Economic Forces, Market Forces, Technology Changes, Legal Forces, Labor Forces, Corporate Culture- Different IHRM Activities, Strategic IHRM

Chapter Summary

In recent times, the world has become a global village. Markets all over the world have become part of a well-knit network. Indian companies have also geared up to meet the challenges of operating in a global market. Management of human resources is a critical task for multinational / global companies. The number of HR activities and the complexity of those activities, increase from a local to a global firm.

International Human Resource Management is characterized by increased complexity of HR activities, cultural awareness and tolerance, stronger relationship with employees and their families, different expectations and requirements of employees across cultures, management of cross-cultural teams and diluted risk on the business front and increased risk on the people front.

Business in India and worldwide has seen some phenomenal developments after the introduction of reforms in recent times. The Indian economy has opened up new vistas of business for MNCs worldwide, including Indian MNCs. The magnitude of FDI investments in the country is an indication of the attractiveness of the Indian market. Indian MNCs have also made a mark in the international market.

Expansion of business horizons implies greater challenges in terms of human resource management. The different IHRM activities include normal HR activities like human resource planning, performance management, compensation management, training, etc., but at a higher level of complexity. The specific IHRM activities include expatriate assignment management, expatriate training, management of cross-cultural work-teams, cross-cultural training etc.

Activities like compensation management and performance management have to be tackled carefully to ensure perceived equity and the trust of employees worldwide. Strategic IHRM is an important element of the corporate strategy of a global firm. An international firm should have a global strategy that acts as a directive to all its subsidiaries operating in different parts of the world.

Strategic HRM helps a firm with global operations identify the opportunities available in the global market and respond accordingly given the strengths and weaknesses of the firm. It also helps to identify and tackle any threats specific to the industry or the manpower market.

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