Domestic HRM vs.

IHRM
 Chapter Objectives
We will establish the scope of the textbook:
Define key terms in IHRM
Review expatriate management evolution
Outline the differences between domestic HRM and
IHRM
Identify variables that moderate these differences
Discover the increasing complexity and potential
challenges of current IHRM, and
Discuss trends and emerging challenges in the global
work environment in which IHRM functions and
activities are conducted
Three Approaches to IHRM
Cross-cultural management
Examine human behavior within organizations
from an international perspective
Comparative HRM and Industrial Relations
Seeks to describe, compare and analyze HRM
systems and IR in different countries
HRM in multinational firms
Explore how HRM is practiced in
multinationals
Figur Interrelationships between
e
1-1
Approaches to the Field
The General Field of HR
Major Functions and Activities
Human resource planning
Staffing
Recruitment

Selection

Placement

Performance management
Training and development
Compensation (remuneration) and benefits
Industrial relations
What does IHRM add into the
Traditional Framework of HRM?
Types of employees
Within and cross-cultural workforce diversity
Coordination
Communication
Human resource activities
Procurement
Allocation
Utilization of human resources
Nation/country categories where firms expand and
operate
Host country
Parent country
Third country
Figure
1-2 A Model of IHRM
What is an expatriate?
In an international firm, a PCN is a person whose
nationality is the same as that of the firm, but
different from the country in which they are working:
for example, a Japanese manager working for a UK-
based subsidiary of a Japanese company.

They are known as Expatriates.

Expatriate are PCNs from the parent country

operations.
Difference between PCNs, HCNs, TCNs)

Parent country nationals (PCNs) are employees who

are citizens of and are hired from the nation where an
organization has its original and current headquarters
(the parent country).

PCNs are distinct from host country nationals (HCNs),

who are staff hired from the country where the
international subsidiary is operating.

Third country nationals (TCNs) are citizens of neither

the parent nor the host country.
Figure International Assignments Create
1-3
Expatriates:
Differences between Domestic HRM
and IHRM
More HR activities
The need for a broader perspective
More involvement in employees personal
lives
Changes in emphasis as the workforce mix of
expatriates and locals varies
Risk exposure
Broader external influences
Figure Variables that Moderate Differences
1-4 between Domestic HR and IHRM
Figure Strategic HRM in multinational
1-5
enterprises
Factors influencing the global work environment
Forces for change
Global competition
Growth in mergers, acquisitions and alliances
Organization restructuring
Advances in technology and
telecommunication
Impacts on multinational
management
Need for flexibility
Local responsiveness
Knowledge sharing
Transfer of competence
Managerial responses
Developing a global mindset
More weighting on informal control
mechanisms
Fostering horizontal communication
Using cross-border and virtual teams
Using international assignments
Chapter Summary (cont.)
We have established the scope of the textbook:
Defined IHRM and the term expatriate.
Discussed major differences between domestic
HRM and IHRM looking at six factors:
More HR activities
Need for a broader perspective
More involvement in employees personal lives
Changes in emphasis as the workforce mix of
expatriates and locals varies,
Risk exposure and
More external influences
 Chapter Summary
Identified four other variables moderating that differences
between domestic and international HRM
Host-country cultural environment
Type of the industry
Reliance of the MNC on its home-country market
Attitudes of the senior management
This treatment has enabled us to provide an overview of the
field of IHRM and to establish how the general environment
affects IHRM.
The next chapter examines the organizational context where
we explore how IHRM activities are determined by, and
influence various internal changes as the firm internationalizes.
Discussion Questions
1. What are the main similarities and differences
between domestic and international HRM?
2. Define these terms: IHRM, PCN, HCN, and TCN.
3. Discuss two HR activities in which a MNE must
engage that would not be required in a domestic
environment.
4. Why is a greater degree of involvement in
employees personal lives inevitable in many IHRM
activities?
5. Discuss at least two of the variables that moderate
differences between domestic and international HR
practices.