International Human Resource Management

Policies and Practices for Multinational Enterprises

Ibraiz Tarique, Dennis R. Briscoe, Randall S. Schuler

• Publisher: Routledge
• Year: 2022
• ISBN:
  9780429806124
• Edition: 6
• Topic: Business
• Subtopic: Human Resource Management
• Index: Business

The updated sixth edition of International Human Resource Management is an authoritative resource that focuses on international human resource management (IHRM) within multinational enterprises (MNEs). The book includes fifteen chapters with rich pedagogy students have come to expect and is organized into four sections:

• Strategic Context
• National and Cultural Context
• Global Talent Management
• Role and the Future of IHRM

Each chapter has been designed to lead readers through key topics in a highly engaging and approachable way with learning goals, relevant data, exhibits, figures, vignettes, end-of-chapter case studies, discussion questions, up-to-date content, and numerous references. The sixth edition includes discussions on evolving IHRM topics such as international experiences and adult third culture kids, expanded analyses on health and safety statistics and global workforce analytics, as well as updated and revised illustrations, cases, references, and instructor resources.

Uncovering precisely why IHRM is essential for success in international business and how IHRM policies and practices function within the multinational enterprise, this comprehensive textbook provides an excellent foundation for understanding the theory and practice of IHRM. It is essential reading for all students, instructors, and IHRM professionals.

Section 1 Overview Strategic context

DOI: 10.4324/9780429441462-2

The first section of this book, “Strategic context,” has four chapters:

• Chapter 1: The internationalization of human resource management
• Chapter 2: Strategic human resource management
• Chapter 3: Design and structure of the multinational enterprise
• Chapter 4: International mergers and acquisitions, joint ventures, and alliances

These introductory chapters set the context for the study of International Human Resource Management: Policies and Practices for Multinational Enterprises, Sixth Edition, and explain why international human resource management (IHRM) remains so important for the management of global business. Together, these chapters describe the important components of the strategic context within which IHRM policies and practices are designed and implemented. Each of these components represents an important part of the strategic context that determines the nature of IHRM. Chapter 1 describes the development and importance of IHRM practices and policies. Chapter 2 links these IHRM practices and policies to a multinational enterprise’s (MNE’s) global business strategy. Chapter 3 describes the various choices MNEs have in the ways they divide themselves across geographically dispersed units around the world and the implications those have for the design and implementation of IHRM practices and policies. Chapter 3 also describes the various structure options available to MNEs in combining those geographically dispersed units and the implications for the design and implementation of international human resource policies and practices. And, finally, Chapter 4 describes the role of IHRM practices and policies in three unique IB structures of MNEs: international mergers and acquisitions, international joint ventures (IJVs), and international alliances.

1 The internationalization of human resource management

DOI: 10.4324/9780429441462-3

“Globalization is the most progressive force in the history of human-kind. It has heralded more rapid improvements to more people than any other human intervention.”¹

Ian Goldin and Robert Muggah (World Economic Forum Website, 2020)

“For the past 30–50 years, the world has been undergoing a vast process of globalization, a term that describes a state of heightened interconnectivity between nations, regions, peoples, and cultures, and each acting with far greater interdependence. The results of this heightened interdependence due to globalization are evidenced in the economic, political, and social actions and policies of nations, including how we trade, live, and work with one another across borders.”²

Dean Foster (Dean-Foster Website, 2020)

Learning objectives

This chapter enables the reader to:

• Describe the many drivers of the internationalization of business.
• Describe the growth and spread of internationalization.
• Describe the different settings of international human resource management.
• Explain the development of international human resource management.

The first edition of this book – published in 1995 – was written in the early years of what today we refer to as international human resource management (IHRM). There was very little literature (few books, few articles, and very few publications) that focused on the international aspects of human resource management (HRM). In many ways, IHRM was a new field of study. That is, the first edition was about traditional HRM as it was being practiced in the few multinational firms in their international operations (refer to Box 1) – in companies such as The Ford Motor Company, Unilever, and British Petroleum who had long-standing international operations. There were also a few consulting firms and law firms that were helping their clients with international HRM issues and concerns. But certainly, today’s world is very different, with most countries having firms (from many small firms to a few large firms) with global customers and global supply chains – typically with one or more employees (and operations) in one or more countries other than their country of origin. In addition, new technology (such as digitization and the Internet) has helped make it possible for many businesses to indeed be international.

HRM, as it was practiced and taught in those early years, included basically all of these following activities:

• Recruiting and selecting;
• Training and development;
• Compensation;
• Benefits;
• Income taxes and social taxes;
• Applying and ensuring compliance with federal and state laws that impact management of employees;
• Health and safety of employees; and
• Management of technology that impacts employees and employment.

These standard HR practices are now being related to an organization’s global work force, within the legal and cultural contexts of each country.

All of these HRM practices became much more complicated as globalization of the economies of an increasing number of countries (and thus an increasing number of firms and employees) led to these firms having to develop and manage a new and more complex set of HRM practices because they were now on a global scale in multiple countries. Primarily, the attention in the IHRM literature (books, magazines, and journals) and courses – as little as there was – dealt with problems related to expatriates (what today we refer to as corporate dealings with global mobility, i.e., employees working in countries other than the headquarters (HQs) country).

Of course, the practice of IHRM was becoming and has now become more complex due to the management of HRM in multiple countries. And compounding these management concerns are the more recent impacts of the nationalization of country economies mixed with the impact of the COVID-19 pandemic. The global economy and country workforces have decreased in the last couple of years. Millions of workers have lost their jobs, many employees now work from home, international travel between operations is close to impossible, immigration visas are often impossible to get, and global communication within the new global workforce is increasingly difficult.

Over the last 75–80 years, since World War I, the economies of the world have become increasingly integrated.³ This has been driven by many forces and led by what is now referred to as the multinational enterprise (MNE) – and more recently contributed to by internationalized government agencies (such as the United Nations [UN] and the World Trade Organization [WTO]), regional trade organizations (such as the United States-Mexico-Canada Agreement [USMCA], Association of Southeast Asian Nations [ASEAN], Regional Comprehensive Economic Partnership [RCEP], Trans Pacific Partnership [TPP], and the European Union [EU] – all of which have changed over the last year or two), small- and medium-sized enterprises (SMEs), countries through their state and family-owned enterprises, born-global organizations, professional employer organizations (PEOs), and non-governmental organizations (NGOs). All of these types of global organizations will be described and discussed later in the book, along with a discussion of the impact of the current COVID-19 virus and its resultant global pandemic, and a discussion of the organizational and employment impacts of recent global political events. As all of these types of organizations have increased their global activities, all of their management functions have required adaptation to the global environment, including their HRM responsibilities. Thus, this book is about the HRM policies and practices that have been developed to accommodate and facilitate management of employees in this global environment.

This first chapter introduces the concept of internationalization and how it has impacted HRM, how that has led to the development of IHRM, and why IHRM has become so critical to the success of global organizations. In addition, this chapter explains why IHRM is so different from traditional and purely domestic HRM, no matter what country the reader is coming from. Broadly defined, the field of international human resource management is the study and application of all HRM activities as they impact the process of managing human resources in enterprises in the global environment. HRM in the MNE is playing an increasingly significant role in providing solutions to employee management problems at the global level. Consequently, there is a need to examine how HRM policies and practices can best support the rapid advance of globalization combined with the effects of recent global pandemic and economic and political impacts. That is, this chapter is about the internationalization of HRM (referred to in this text as International HRM or IHRM).⁴

International human resource management is the study and application of all human resource management activities as they impact the process of managing human resources in enterprises in the global environment.

The following provides a short summary of what is driving the internationalization of business and its impact on HRM. To begin with, today markets for most goods and services are global, and firms are increasingly taking advantage of this with increased dig...