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International Management. Phatak, Bhagat, and Kashlak. Chapter 16. International Human Resources Management. Learning Objectives. Understand the various approaches that multinational and global organizations undertake for managing and staffing subsidiaries in various parts of the world.

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International management

International Management

Phatak, Bhagat, and Kashlak

Chapter 16

Chapter 16

International Human Resources Management

Learning objectives
Learning Objectives

  • Understand the various approaches that multinational and global organizations undertake for managing and staffing subsidiaries in various parts of the world.

  • Distinguish between various functions of international human resources management.

  • Identify the various strategies for selecting staff for foreign assignments.

  • Explain how training programs prepare managers for overseas assignments.

  • Understand the various schemes for compensation and benefits used by multinational and global organizations.

Learning objectives contd
Learning Objectives (contd.)

  • Identify the issues inherent in repatriation, and why multinational and global companies need to address issues concerning managers returning from overseas assignments.

  • Understand that labor relations practices differ in each country, and how these differences affect multinational and global companies.

Chapter topics
Chapter Topics

  • What is International Human Resources Management?

  • Managing and Staffing Subsidiaries

  • Major IHRM functions

  • Selecting Expatriates

  • Managing Expatriates

  • International Human Resource Management and Competitive Advantage

Functions of international human resources management
Functions of International Human Resources Management

  • Management of human resources in global corporations, including issues of expatriation and repatriation

  • Implementing corporate global strategy by adapting appropriate human resources management practices in different national, economic, and cultural environments

  • Adopting labor relation practices in each subsidiary that matches local requirements

Major approaches to managing and staffing subsidiaries
Major Approaches to Managing and Staffing Subsidiaries


  • The company uses the approach developed in the home country, and the values, attitudes, practices, and priorities of headquarters determine the human resources policies and practices


  • The company considers the needs of the local subsidiary when formulating human resources policies and practices


  • The company considers needs of an entire region when developing human resources policies and practices

    Global or Geocentric

  • The company’s priority is the optimal use of all resources, including human resources, and local or regional considerations are not considered important for the success of the corporate strategy

Factors to be considered in the ultimate selection of a ihrm approach
Factors to be Considered in the Ultimate Selection of a IHRM Approach

  • National concerns

  • Economic concerns

  • Technological concerns

  • Organizational concerns

  • Cultural concerns

Ex 16 1 contd
Ex. 16-1(contd.) IHRM Approach


Major ihrm functions
Major IHRM Functions IHRM Approach

  • Recruitment and selection

  • Performance evaluation

  • Compensation and benefits

  • Training and development

  • Labor relations

Also, management of expatriate workers

Terms used in ihrm
Terms Used in IHRM IHRM Approach

  • Recruitment is the process of attracting a pool of qualified applicants for available positions

  • Selection is the process of choosing qualified applicants from the available candidates and ensuring that the skills, knowledge, and abilities of the selected employees match the requirements of the positions

  • Performance Evaluation is the process of appraising employees’ job performance

  • The Compensation and Benefit function of HRM is designed to develop uniform salary systems and other forms of remuneration, such as health insurance, pension funds, vacation, and sick pay

Terms used in ihrm contd
Terms Used in IHRM IHRM Approach(contd.)

  • The Training and Development function involves planning for effective learning processes, organizational development, and career development

  • The Labor Relations function is designed to assist managers and workers determine their relationships within the workplace

Classifying employees
Classifying Employees IHRM Approach

  • Parent country national (PCN): the nationality of the employee is the same as that of the headquarters of the global organization

  • Host country national (HCN): the employee’s nationality is the same as that of the subsidiary

  • Third country national (TCN): The employee’s nationality is neither that of the headquarters or of the local subsidiary

Ex 16 4 effects of culture shock on adjustment
Ex. 16-4: Effects of Culture Shock on Adjustment Practices







Degree of Adjustment



Culture Shock


0-2 3-4 4-6 6-9 10-12 13-24 25-36 46-48 49+

Time in Months

Types of compensation systems
Types of Compensation Systems Practices

Headquarters Salary System

  • Headquarters pay scale plus differentials. The salary for the same job at headquarters determines the base salary of the home country national. The differential can be a positive addition to an expatriate’s salary, or it can be a negative allowance to account for the extra benefits that might be associated with the particular overseas placement

    Citizenship Salary System

  • The manager’s salary is based on the standard for the country of his or her citizenship or native residence. An appropriate differential is then added, based on comparative factors between the two countries

Suggestions for policies for managing dual career expatriates
Suggestions for Policies for Managing Dual-Career Expatriates

  • Frequent visitation trips of the family or the expatriate to prevent the pain of separation from becoming too intense

  • Generous allowance for long distance telephone calls and other costs of communication

  • Seek employment opportunities for the spouse within the company or in the local area, if the spouse is willing to quit his or her job in the home country to be with the married partner

  • Making connections with other global companies for employment of spouses

Repatriation Expatriates

  • Repatriation is the term given to the return of the home country manager.

  • Reasons for repatriation:

  • The time of the overseas assignment is up

  • Children’s education

  • Unhappy with the assignment

  • Family unhappiness

  • Failure

Key terms and concepts
Key Terms and Concepts Expatriates

  • International human resources management

  • Ethnocentric staffing approach

  • Polycentric staffing approach

  • Regiocentric staffing approach

  • Geocentric staffing approach

  • Performance evaluation

  • Expatriate

  • Repatriation

  • Culture shock