Conceptualising

IHRM
International Human Resource Management
INDU-1130
Lecture 2
October, 2021
Dr Scott Tindal
Lecturer
Department of Human Resources & Organisational Behaviour
Business School
[email protected]
  Define International Human Resource
Lecture learning Management.

outcomes  Articulate an overview of the three ‘lenses’ (or

‘approaches’) to International HRM.

 Critically describe the ‘Convergence-

Divergence’ debate within IHRM.
Module map
Topic 1:
Topic 3:
Theoretical Topic 2:
Contemporary
approaches to Functions of
issues in
studying IHRM
IHRM
IHRM
 International HRM Topics
2. Functions
1. Theory (practice)

Three
‘lenses’ of
IHRM

Convergence
/ Divergence
of HRM 3. Contemporary
Issues
What is ‘International human resource management’?
“International Human Resource Management is about
understanding, researching, applying and revising all human
resource activities in their internal and external contexts as they
impact the processes of managing human resources in
organisations throughout the global environment to enhance the
experience of multiple stakeholders.”

What does that mean?

Schuler & Tarique, 2007: 718.

Other authors’ definitions of IHRM:
“…the worldwide management of people in the multinational
enterprise” (Poole, 1990: 1)

??????
“…the implications that the process of internationalisation [of
organisations] has for the activities and policies of HRM” (Dowling et al,
2008: 293).
Multinational
Enterprise (MNE)
or
Multinational
Corporation (MNC)
or
Transnational
Corporation (TNC).
• A multinational corporation (MNC) is an enterprise that operates in several countries
but is managed from Home country” (Brewster, 2016: 2).
>25% of revenues from outside its home country = MNC.
Decentralised / centralised.
“Home country” culture, or “international” culture.
Uniform product offering (cost advantage) or adapted products (better market fit).

• MNE (enterprise) because not all multinationals are companies (e.g. charities, non-
governmental bodies are MNE but not MNC).

• TNC are those invested in foreign companies, centralised corporate facilities, but
R&D, marketing, investment, etc, decentralised.
Why is IHRM important?
Globalisation
Integration of economic, social, political activities and values.
power and scale (eg Multinational Corporations; mergers).

Demographic trends and labour market change

ageing / low birth rates = labour shortage supplies.
population growth and lack of development opportunity.
Migration.

Geopolitical and institutional shifts

EU change, Brexit, US-China trade war.
changing institutional environments (e.g. state to private).

Emerging economies
competition; sustainability; ethics.
Less is known about MNCs emerging from emerging economies
… and the challenges to IHRM…
Cultural differences, expectations, norms etc.

Institutional differences, such as trade union membership, employment laws, and other
legal/institutional differences.

Different countries have different views of what ‘HR should do’.

(e.g. in some countries, HR is seen as ‘strategic’, in others it is ‘administrative’).
(e.g. managerial development, ‘elite recruitment’ (France), versus ‘apprentice’
concept (Germany)).
Conceptual / 1. ‘Three lenses of IRHM’
analytical
approaches IHRM.
2. Convergence-divergence
debate.
 Cultural
Three components of IHRM approaches

International Comparative
HRM (institutional)
approaches approaches
 © TravelDestination, 2020

1. Cross-cultural approach

© Telegraph, 2009 © New York Times, 2010

2. Comparative / institutional approach
What is included in the remit of HRM varies by country:

Cranet survey on HRM policy and practice:

Swedish = “Where are the environmental questions?”

Germans = “Where are questions about work councils?”
French = “Where are questions about the relationship with wider society and corporate
responsibility?”
Japanese = “Some of these questions are too intrusive for HR to ask of the employees.”

Different countries see different aspects of HRM as important as the wellbeing of the organisation
itself. Understanding these differences using comparative methods is important for understanding how
to best manage people and organisation in the wider society in which they are a part.
3. International Human Resource Management approach

More practice-orientated – taking into account cultural norms and

institutional contexts.

Focuses on how organisations must change their HRM functions when

they “go international.”

“What do you feel you have done well or badly in your job over
the last 3 months?”
Summary of conceptual framework

Cross-cultural management

• Differences between nations –values, norms, rules and the way that work is conducted
• HRM practices may be affected by cultural norms.

Comparative HRM

• The extent to which HRM differs between countries as a result of different employment systems (e.g.
employment law, trade unions, etc).
• Focus of HRM, and its purpose, is seen as different in different countries

International HRM

• The way in which countries manage their HR across multiple countries, i.e. the specific role and
organisational behaviour of MNCs / TNCs
• The strategic challenges of internationalisation (SIHRM) and 'global HRM'
Conceptual / 1. ‘Three lenses of IRHM’
analytical
approaches IHRM.
2. Convergence-divergence
debate.
A fundamental question:

To what extend do HRM “rules” or “practices”

apply in every country, and how much do we need
to take local context into account?
 Technology Differentiation

Globalisation Institutions
‘Best practice’
‘best fit’
Competition
Centralisation Culture

Convergence Divergence
 © Wikipedia commons, 2020

Crossvergence
Geopolitics
Business ideology

Globalisation
Neoliberal capitalism

Cultural norms

Shift away from American-centric world

(Ralston, 2008)
Two approaches to IHRM...
Universalist – there is a single, coherent and ‘best practice’ to improve how
human resources can be used by an organisation.
American
Goal is to improve organisational performance / competitive advantage.
Rigorous and methodological case studies (single organisations / countries).

Contextual – Seeks to understand of why HR practices differ. Not trying to

understand the ‘best’ ways of doing HR, but how labour markets work, and what
‘typical’ organisations are doing.
Goal is to understand messiness (workers, unions, management, laws, education system,
labour market conditions, ownership structure, government involvement, etc).
Focus on ‘organisations in society’.
Comparative analysis (multiple countries, multiple organisations).
… and the debate between them.
Universalists: What matters is ‘best practice’ to get the most for all stakeholders.

Contextualists: “What is best practice? Is ‘best practice’ in one country or in one

organisation the ‘best’ in other countries or organisations?”

Universalist only deals with the organisation, not the wider institutional environment
in which the organisation exists.

Most HR practice is actually about dealing with ‘local’ institutional issues, not
finding “the best way of doing HR”.
 Today we discussed what IHRM is,
and what it does.
Summary
We looked at the three conceptual /
analytical approaches to studying
IRHM: cultural, institutional, and
IHRM in practice.

We also looked at the convergence-

divergence debate.
References
Ariss A. and Sidini Y. (2016) Comparative international human resource management: future research directions. Human
Resource Management Review 26: 352-358.

Brewster, C., Sparrow, P., Vernon, G and Houldsworth, E. (2016) International Human Resource Management (4th
Education). CIPD: London, chapter 1.

Crawley, E., Swailes, S. and Walsh, D. (2013) Introduction to International Human Resource Management. Oxford
University Press: Oxford, chapter 1.

Morley, M. and Collings, D. (2004) contemporary debates and new directions in HRM in MNCs: introduction.
International Journal of Manpower 25 (6): 487-499.

Ralston, D. (2008) The convergence perspective: Reflections and projections. The Journal of International Business
Studies 39 (1): 27-40

Schuler, R. and Tarique, I. (2007) International human resource management: a North American perspective, a thematic
update and suggestions for future research. The International Journal of Human Resource Management 18 (5): 717-744.
Further
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2. Referencing:

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Next week: Next week we will look in more
detail at the first lens of IRHM:
cultural approaches.