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Human resource management in international business

Due to the growth of internationalisation and global competition, the role of International Human Resource Management (IHRM) in those Multinational Corporations (MNCs) grows in significance.

Employers rely on IHRM to deal with global HR challenges. So what is IHRM?

IHRM refers to the human resource management concepts and techniques employers use to manage the HR challenges of their international operations, including acquiring, training, appraising and compensating employees, and attending to their labour relations, health and safety, and fairness concerns (Dessler 2020).

IHRM and domestic HRM share similar core functions, including recruitment, selection, employee learning and development, diversity and equality, and remuneration.

IHRM examines the way in which international organisations manage their HR across different national contexts.

IHRM explores how MNEs manage the demands of ensuring that the organisation has an international coherence and cost-effective approach to the way it manages its people in all the countries it covers, while at the same time ensuring that it’s responsive to the differences in assumptions and in what works from one location to another.

(Brewster et al. 2011: 14)

The effective management of HR internationally is increasingly being recognised as a major determinant of success or failure in international business (Scullion 1995). Research evidence demonstrates that business failures in the international arena may often be linked to poor management of HR.

Your task

Reflect on the previous two steps and examine the similarities and differences between HRM and IHRM.


References

Brewster C., Sparrow, P., Vernon, G., and Houldsworth, E. (2011) International Human Resource Management. London: CIPD

Dessler, G. (2020). Human Resource Management. 16th edn. London: Pearson Education Limited

Scullion, H. (1995). ‘International Human Resource Management’. in Srorey, J. (ed), Human Resource Management: A Critical Text. London: Routledge

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This article is from the free online course:

Introduction to International Human Resources Management

Coventry University