Assignment on the topic

“International
Human
Resource
Management”
Submitted to: Submitted by:

Prof. Shyam Lal Saurav Thakur

Kaushal 4096
International Human
Resource Management:
IHRM can be defined as a set of activities
targeting human resource management at the
international level. It strives to meet
organizational objectives and achieve
competitive advantage over competitors at
national and international level.

IHRM comprises of typical HRM functions

such as recruitment, selection, training and
development, performance appraisal and
dismissal done at the international level and
additional exercises such as global skills
management, expatriate management and so on.

In short, IHRM is concerned with handling the

human resources at Multinational Companies
(MNCs) and it includes managing three types of
employees:
1) Home country employees: Employees
residing in the home country of the company
where the corporate head quarter is situated,
for example, an Indian working in India for
some company whose headquarters are in
India itself.
2) Host country employees: Employees
residing in the nation in which the subsidiary
is located, for example, an Indian working as
an NRI in some foreign country.
3) Third country employees: These are the
employees who are not from home country or
host country but are employed at the
additional or corporate headquarters. For
example, an Indian MNC, which has its
corporate office in America, may employ a
French person as the CEO to the subsidiary.
The Frenchman employed is a third country
employee.

Domestic and International

HRM:
There are many similarities between HRM at
the national as well as international level. But
there are some differences as follows:

 Domestic HRM takes place at the national

level, that is, within a country and IHRM
takes place at the international level, that is, in
between two or more than two countries.
 Domestic HRM is bothered about managing
employees belonging to one nation and IHRM
is bothered about managing employees
belonging the home country and host country
as well as third country employees.
 Domestic HRM is concerned with managing
limited number of HRM activities at the
national level and IHRM is concerned with
managing additional activities such as
expatriate management.
 Domestic HRM is less complicated due to
fewer imprints from the external environment.
IHRM is comparatively more complicated, as
it is deeply affected by the external factors
 such as cultural distance and institutional
factors.
We can conclude that both IHRM and HRM
share some grounds of similarities as well as
dissimilarities, but both have their own
importance. Further, they contribute to the
development of a country in a combined
manner.

International Recruitment:
While recruiting people for international
operations, the international HR managers must
identify the global competitiveness of the
potential applicants at the time of the recruiting
process. It is essential that the workforce of an
international organization is aware of the
nuances of international business.
Understandably, the company must keep
international knowledge and experience as
criteria in the recruitment and selection process.

Methods of International Recruitment:

1) Ethnocentric approach: Countries with
branches in foreign countries have to decide
how to select management level
employees. Ethnocentric staffing means to
hire management that is of same nationality of
parent company.
Normally, higher-level foreign positions are
filled with expatriate employees from the
parent country. The general rationale behind
the ethnocentric approach is that the staff
from the parent country would represent the
interests of the headquarters effectively and
link well with the parent country.
The recruitment process in this method
involves four stages:
 Self-selection
 Creating a candidate pool
 Technical skills assessment
 Making a mutual decision.
The ethnocentric approach places natives of the
home country of a business in key positions at
home and abroad. In this example, the U.S.
parent company places natives from the United
States in key positions in both the United States
and Mexico.
2)  Polycentric approach: When a company
adopts the strategy of limiting recruitment to
the nationals of the host country it is called a
polycentric approach. The purpose of adopting
this approach is to reduce the cost of foreign
operations gradually. Even those organizations
which initially adopt the ethnocentric
approach may eventually switch over to the
polycentric approach. The primary purpose of
handing over the management to the local
people is to ensure that the company
understands the local market conditions,
political scenario, cultural and legal
requirements better.
The polycentric approach uses natives of the
host country to manage operations in their
country and natives of the parent country to
manage in the home office. In this example,
the Australian parent company uses natives of
India to manage operations at the Indian
 subsidiary. Natives of Australia manage the
home office.
3) Geocentric approach: When a company
adopts the strategy of recruiting the most
suitable persons for the positions available in
it, irrespective of their nationalities, it is called
a geocentric approach. Companies that are
truly global in nature adopt this approach
since it utilizes a globally integrated business
strategy.
The geocentric approach uses the best
available managers for a business without
regard for their country of origin. In this
example, the UK parent company uses natives
of many countries at company headquarters
and at the U.S. subsidiary.
4) Regiocentric Approach: The Regiocentric
approach uses managers from various
countries within the geographic regions of
business. Although the managers operate
relatively independently in the region, they are
not normally moved to the company
headquarters.
One shortcoming of the Regiocentric approach
is that managers from the region may not
understand the view of the managers at
headquarters. Also, corporate headquarters
may not employ enough managers with
international experience.
The Regiocentric approach places managers
from various countries within geographic
regions of a business. In this example, the
U.S. parent company uses natives of the
United States at company headquarters.
Natives of European countries are used to
manage the Italian subsidiary.