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International HRM Day 1 – IHRM, Setting the Scene Monday 13 th February 2017 Paul Hunter Email: [email protected] Why IHRM?  Today it is important for multi -national organisations to remain competitive, responsive, flexible & adaptable of transferring knowledge and learning across global offices.  International Human Resource Management (IHRM) is a new, complex and rapidly chang ing area of practice due to the major challenges facing multi -national organisations in the management of human resources.  This course provides you with up -to -date, research -based knowledge concerning the implementation and impact of IHRM practices within multi -national organisations. Learning Outcomes 1. Understand the key academic models, theories and controversies surrounding the role and influence of IHRM; 2. Recognise the importance of culture & cross -cultural management; 3. Understand the need to transfer employment practices across borders through recognised frameworks; 4. Describe the needs of change, training and knowledge management in multinational firms; 5. Understand the processes of global performance management, global talent management & the dark side of international employment. IHRM Timetable Day 1 – IHRM, Setting the Scene Monday 13 th February, 09.00 -12.00 Day 2 – IHRM Academic Models, Theories and Debates Wednesday 15 th February: 09.00 -12.00 Day 3 – The Cultural Approach Thursday 16 th February - 09.00 -12.00 Day 4 – Global Staffing International Assignments Monday 20th February – 09.00 -12.00 Day 5 – Managing Change & Knowledge Wednesday 22nd February – 09.00 -12.00 Day 6 - Dark Side of International Employment & Assignment Thursday 23rd February – 09.00 -12.00 Core Text Books Further Resources • Crawley, Swailes and Walsh (2013). Introduction to International Human Resource Management. Oxford University Press. • Harzing and Pinnington (2015). International Human Resource Management (fourth edition). Sage . Moodle • Slides and journals have been posted on to the IHRM Moodle page. Assignment  There will be a choice of two assignment questions (2500 words).  Assignment details will be released via Moodle in due course .  The assignment deadline will be: Friday 17 th March at 12pm. Day 1 IHRM – Setting the Scene HRM Review “HRM is the development of policies, and management of processes and activities undertaken by a Human Resource Department for an organisation. It is usually studied in the context of one country ” “SHRM ensures that all policies, processes and activities are focussed on supporting the Strategic objectives of the organisation. ” (Crawley, Swailes & Walsh 2013) The Emergence of HRM  Developments in HRM have been driven by large scale changes within businesses due to the competitive global economic environment. “In the past two decades, a company’s workforce has become increasingly important to business success – so much so that most senior executives now view people and workforce -rela ted issues as a critical competitive differentiator and one of their top agenda items’. Attracting and retaining skilled staff and finding and developing talented leaders were cited by executives as critical factors in achieving high performance” (Accent ure, 2006) Definitions of HRM  The study of Human Resource Management is concerned with the nature and regulation of the employment relationship (economic asset). “HRM includes anything and everything associated with the management of employment relationships in the firm” (Boxall and Purcell, 2003) “A strategic approach to managing employment relations which emphasises that leveraging people's capabilities is critical to achieving sustained competitive advantage, this being achiev ed through a distinctive set of integrated employment policies, programmes and practices ” (Bratton & Gold, 2007) HRM Functions  All about People - acquiring their services, developing their skills, motivating them to higher levels of per formance.  Ensuring that they continue to work effectively in the organisation is what constitutes the process of HRM.  In other words, the activities associated with people management in work organisations.  It is suggested that the impact of HRM on an organisation is of great value – interrelated to an enterprise's success and performance. HRM Activities  HRM covers areas of work and employment inc: • Staffing; • Job analysis, recruitment & selection; • Training and development; • Rewards & Motivation; • Employee relationships; • Health, safety and employee well -being; • Performance management; • Diversity and Equality management; • Change management; • Employer branding; Covered in CIHRM Course The HRM Model (Storey, 2007) Beliefs & Assumptions • Gives competitive edge • Not about rules, but employee commitment • Employees should be carefully selected and developed Strategic Qualities • HR decisions are of strategic importance to the business • Management involvement is necessary • HR policies should be integrated into business (stemming from and contributing) Critical Role of Managers • Not just about HR specialists – due to core activities of the business • Managers are closely involved as enablers and drivers of HR policies • More attention is made to the management of managers Key Levers • Culture is very important • Integrated action on selection, communication, training, reward and development • Restructuring and job redesign to allow developed responsibility and empowerment. HRM – Developing Role of Managers  With the development of HRM, the increasing role of HR managers and specialists has driven a need for increased skills: • increased responsibility placed upon it to deliver improvements in worker performance; • the HR function in some organisations has shifted from a predominant emphasis on operational issues to a more strategic focus; • as a result, bigger shift towards the need for SHRM skills. Planning, Organising, Directing & Controlling HR Meanings - Global Considerations  Of all management topics HRM is most subject to local influences (Rosenzweig and Nohria, 1994).  Different countries have different views about: • what HRM means (role and scope of the HRM department); • whose responsibility it is (specialists/line, trade unions); • what the aims of it are (maximum short -term profit, preparation for the long -term, care of employees). The Universalist Paradigm  A major problem for those who study and practise HRM is that much of our understanding and most of our knowledge about the topic comes from the USA and are assumed to apply universally.  The fact that some of the richest countries in the world manage their HRM in different ways, and that there are world -beating MNCs from an ever -increasing number of countries, reminds us that ‘different’ does not mean ‘worse’. International HRM “International HRM (IHRM) is about the worldwide management of human resources” (Schuler & Tarique 2007: 717 -18) “IHRM is concerned with the human resource problems of multi -national firms in foreign subsidiaries with the unfolding of HR issues that are associated with the various stages of the interna tionalisation process ” (Boxall, 1995) IHRM – An Extension of HRM  International businesses must effectively manage people both at their head quarters and their foreign offices.  IHRM refers to an extension of HRM – i.e. trying to develop global policies and manage people working overseas either as expatriates or local workers.  Why is this important? • Many organisations now operate across a number of different countries across the world; • All their subsidiaries have to be managed and opera ted.  There is an imperative need to understand the organisation and its global environment. Challenges within IHRM – Group Exercise  Considering the knowledge you have gained in CIHRM to date: a) What do you believe are the main differences between IHRM and HRM? b) What skills do you believe are required to be effective at managing an IHRM department? c) Do you believe SHRM is an important factor for IHRM? d) What do you believe are the main challenges of IHRM? IH RM – Initial Drivers  Organisations developing internationalisation typically need to consider the following: • What are the drivers for becoming an international firm, e.g.? • Shareholder value & increased profit? • Forging strategic partnerships. • Building global presence and developing new markets. • What type of managers/staff will we need to be successful? Qualities required, i.e.: • Understanding of worldwide business & cultures and adapt. • Enjoys working with many different types of people. • Cultural awarene ss. Global Megatrends and Business Trends VIDEO  Productivity impacts: fewer people needed to develop products and services, replaced by technology.  Businesses becoming more powerful than governments: deploying mobility, moving resources and plants easier now. Government concessions arise.  Changing Demographics: Population aging/stabilising globally, however developing countries with higher birth rates. Volatility more evident in countries with high birth rates.  Credit System: Unknown impacts of rising public debt.  Resources & Global Warming: Environmental impacts, commodity price rises, drought, extreme impact weather Global Megatrends – Impact on HR?  With continual global change, it is important that IHRM professionals consider worst case scenarios, however unlikely they may seem.  As a result there is a need to think bigger.  Many organisations have suffered setbacks, or even foundered, because they didn’t consider such events e.g: • Iceland: earthquake - the effect of the volcanic ash on the airline industry and staff productivity; • Japan: the earthquake followed by a tsunami and its effect; • Europe: recent impact of terrorist attacks; • Globally: impact of global warm THE WO RLD IS CHANGING F AST! THIS YEAR WE HA VE EXPERIENCED THE BREXIT VOTE, DONALD TRUMP ’S ELECTION VICTORY AND A (SUDDEN?) SHIFT TO OSTENSIBLY LESS TOLERANT POLITICAL ATTITUDES. WHAT ’S NEXT? FURTHER DISCUSSION QUESTIONS How should bu siness leaders respo nd t o Brexit? How will business leaders re spond to t he rise of political populism in other Western democracies ? For example, France, The Netherlands, USA. What impact might this have on levels of immigration? PESTLE Factor Example Organisation Implications Political e.g.: • Government stability, policies and attitudes • Terrorism • Rise of kidnapping • Implications for creating an office in risky countries • Government volatility effect on the organisation in terms of policy changes, attitudes towards foreign companies. Economic e.g.: • Exchange rates • Cost of materials, Trade tariffs • Unemployment/Recession Social e.g.: • Aging populations, retirement age, demographic shifts & religion • Remote working increases • Healthcare costs, increases in illness • Turbulence in economies can have negative effects on exchange rates or inflation • Recession may drive layoffs and downsizing • Fiscal implications re tax, exchange rates • Implications for pension administration • Healthcare plans • Religious differences affecting policies PESTLE Factor Example Organisation Implications Technological e.g.: • Technology breakthroughs, rise of social networking, mobile phones • Increase in hacking and data leaks Legal e.g.: • Increased employee protection in the West • Immigration laws – tightening • Industry specific regulations Environmental e.g.: • Natural disasters and climate change • Disposal of waste laws • Ethical concerns • Implications for hiring workers remotely • Data security and backup • Change management due to adoption of new technology • Tightening of immigration may have impact on a company’s ability to hire workers • Increasing regulation in the West tempting more companies to locate in developing countries • Health and safety laws • Disaster planning policies to include both data and business continuity and employee safety • Travel policies • Corporate Social Responsibility IHRM – A Global Mind -set  IHRM professionals need to: • take an interest in international affairs, travel and different cultures; • understand the implications for the organisation based on worldwide trends and changes; • manage and communicate with different cultures and understand local customs, values and norms; • understand the local recruitment market and how to recruit; • adapt to coaching and mentoring skills across different cultures; • link the organisations strategy and objectives with HR practices. SHRM to IHRM – Delivering Success Globally  Develop a competitive strategy throughout the world with an understanding of global competitors;  Provide policies, practices and services to a diverse set of employees located in potentially very different locations and operating environments;  Being locally responsive in each regional location;  Ensure flexibility and adaptability;  Adequate transfer of knowledge. Cultural Differences  IHRM is intrinsically international and multi -cultural , contributing to making culture a frequent component of issues managers deal with in their work.  Differences can often be identified between cultures and between local contexts in: • The values and commitment people have and consider fundamental; • How people experience and interpret behaviours and events; • Extent of influence of powerful individuals and groups. The Challenge of Expatriates  Expatriates are employees who go to work in another country.  They can either work for the organisation already in their home country or can be recruited externally.  Their assignments can vary in length – weeks/months or years.  Important to develop pre -expatriate training to support the employee to adapt to a new culture and country as well as a new job.  Need to consider the expatriates reporting structures, performance management, long distance support and how to deal with problems. Institutional Differences  Background differences: • geography; climate; wealth; technological development; and education system;  Labour market differences;  Language & role of religion, e.g. prayer, taboos, holidays.  Regulatory differences: • legal system a nd laws; employment legislation; trade unions; pressure groups;  Risk – kidnapping & robbery. IHRM – Initial Questions to Consider  How can I find out about the way that HRM is conducted in other countries: the laws, trade unions, labour market, expectations, etc?  What will be the impact of local cultural norms on our home -based ways of working? Can we use all or any of them in other countries?  How will we choose whether to send expatriates or use local employees?  How do we manage international moves if we choose to send some people out from this country?  How do we manage knowledge across geographical and cultural distance? Day 2 IHRM – Academic Models, Theories and Debates