IHRM

International Human Resource Management

International Human Resource Management

Introduction

International human resource management (IHRM) is about the worldwide management of human resources. A greater systematic understanding of IHRM can improve the performance of international operations. Such an understanding includes: a) a model of the field of international human resource management; b) an inventory and appraisal of what we know about IHRM today; and c) a research agenda based upon what we know and what we still need to know (Jackson, 2007, pp. 727).

Regional economic integration has managed to change the competitive strategies in which firms do business both domestically and across borders. Because of regionalization, many firms are faced with the unquestionable challenge of operating across borders with a transnational workforce. Firms encounter many national cultures when doing business in a global economy; therefore, it has become necessary for MNCs to review their international human resource management (IHRM) practices. To be successful and to remain competitive, a MNC must be able to effectively manage its human resources (Farndale 2010 161). A MNC must be able to attract, develop, and maintain capable professionals who can function effectively both domestically as well as across borders. This emphasis on IHRM is a relatively new phenomenon.

In the past, little consideration was given to the implications of cross border trade on IHRM. However, corporations are beginning to realize that they cannot concern themselves just with the potential opportunities that come from internationalizing one's operations. MNCs now realize that they should also focus on the preparation of their managers to operate effectively in a culturally diverse environment. The role of IHRM is very complex and multi-faceted. The IHRM activities are further complicated when operating across borders because of the many cultural, social, and political differences that exist between countries (Finegold, 2008, pp. 21).

In a study conducted by Tung (1984), it was revealed that many of the problems that U. S. MNCs encounter with foreign assignments are the result of poor human resources planning. Poor management of human resources can lead to inadequate selection criteria, inadequate training (), inadequate performance evaluation, inadequate compensation and inadequate repatriation programs.

Cross culture context

Globalization and developments have resulted in diversity in the labor market and cross-cultural management has become a significant factor of organizational life and has transformed organizations all over the world. The successful management of this cultural diversity lays on how well organizations understand the manifestation of this diversity and its effects in the organizational and international business contexts.

Following this, there are two ways in which corporate cultures are playing an important role in enhancing the result of multinational companies becoming carriers of convergent practises across national boundaries. First is the mutual agreement between the employer and the employees at certain levels of beliefs and ideals becomes the product and the facilitator of communication between both parties. Second is, firms are needing to integrate an increasingly diverse number of activities and units. Many management theorists portray culture as the glue that's binds those diverse units into cohesive and coordinated ...