Issues in international HRM

International HRM

According to Armstrong (2009) International HRM is the process of managing people across international boundaries by multinational companies. It includes the worldwide management of people. Companies that operate globally comprise international and multinational firms. Brewster et al (2005) said that biggest challenge from both the public and private sectors to the organization in the 21^st century is the need to operate across national boundaries.

Brewster and Sparrow (2007) pointed out that the nature of international human resource management is changing fast. Among some of the larger international organizations, these changes have created a completely different approach to international human resource management.

Issues in international HRM

Globalization

Globalization is the process of international economic integration in worldwide markets. It involves the development of single international markets for goods or services accompanied by an accelerated growth in world trade. Any company that has economic interests or activities extending across a number of international boundaries is a global company. This involves a number of issues not present when the activities of the firm are confined to one country. (Armstrong, 2009). Ulrich (1998) explained that globalization requires organizations to move people, ideas, products and information around the world to meet local needs.

Environmental differences

Environmental differences between countries have to be taken into account in managing globally. According to Gerhart and Fang (2005), these comprise differences in the centrality of markets, institutions, regulations, collective bargaining and labour-force characteristics.

For example, in Western Europe, collective bargaining coverage is much higher than in countries like the United States, Canada and Japan. Works councils are mandated by law in Western European countries like Germany, but not in Japan or the United States. In China, Eastern Europe and Mexico, labour costs are significantly lower than in Western Europe, Japan and the United States.

Cultural differences

Hiltrop (1995) found that the some HR areas that may be affected by national culture. Those are decisions of what makes an effective manager, giving face-to-face feedback, readiness to accept international assignments, pay systems and different concepts of social justice, approaches to organizational structuring and strategic dynamics.

Convergence and divergence

Brewster et al (2002) said that the effectiveness of global HRM depends on the ability to judge the extent to which an organization should implement similar practices across the world (convergence) or adapt them to suit local conditions (divergence).

References

Armstrong. M, (2009). Handbook of Human Resource Management Practice, 11th edition

Brewster, C and Sparrow, P (2007) Advances in technology inspire a fresh approach to international HRM, People Management, 8 February, p 48

Brewster, C., Harris, H and Sparrow, P (2002) Globalizing HR, CIPD, London

Brewster, C., Sparrow, P and Harris, H (2005) Towards a new model of globalizing HRM, The International Journal of Human Resource Management

Gerhart, B and Fang, M (2005) National culture and human resource management: assumptions and evidence, The International Journal of Human Resource Management, 16 (6), pp 971–8616 (6), pp 949–70

Hiltrop, J M (1995) The changing psychological contract: the human resource challenge of the 1990s, European Management Journal, 13 (3), pp 286–94

Ulrich, D (1998) A new mandate for human resources, Harvard Business Review, January–February, pp 124–34