Class notes
Lectures International HRM
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This document contains notes from all lectures of the course international HRM. relevant examples and models are added to increase general clarity.
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Lecture 1- Increased globalization and internationalization of the world
- Multinational companies (MNCs) played a dominant role
o Accounting for half of global exports
o Third of world GDP (28%)
o Fourth of global employment (OECD,2018)
- MNCs (vs. domestic firms)
o Operations sites, distribution networks, suppliers, employees, and customers
are spread across nations
o Management becomes more complex
Multinational corporations (MNCs)
- Events that put IHRM topics into focus
o Increase in MNCs
o Cheap labor and the (in)decent work conditions what is the role of HR in
this?
o Economic/political/global changes e.g. Brexit, Covid-19 remote work and
work and wellbeing.
What factors did the I-HRM managers have to consider in this case?
- The difference between company values (global focus) and country values (local
requirements)
o Austria really focused on safety and working protection although this is not
really the usual for McDonald
o Serving genetically modified food is forbidden in Austria so people might not
feel like working for the company
o Apprentenship training is no longer that popular in Austria
- Austria has a very diverse workforce itself (13 percent born abroad)
Why study IHRM
Differences in between countries and their populations in:
- Culture and values of workers
- Education and skills of workers
- Economic situations
- Laws and regulations
- Government support or control/government type/system
Must understand these differences and their impact on people, to understand how to operate
and manage human resources in an international context
International HR managers: complexities
In an international firm you are more impacted as a manager. This adds to the complexity of
the role and there are more relationships that you have to consider and manage. The mindset
and requirements change a little bit as well.
- HR managers in an international context impacted more by multi country,
regional, and global changes
They have to manage a wider set of relationships:
o headquarters, regional and subsidiary line managers
o headquarters and subsidiary employees
, o national, regional (e.g. European)-level and international trade union bodies
o national and regional (e.g. European)-level legislative bodies
o local and regional communities.
Sparrow et al (2004) argue that individuals working in an
- international context need to be competent in:
o interpersonal skills (especially across cultures)
o influencing and negotiating skills
o analytical and conceptual abilities
o strategic thinking
o international finance
o international labour legislation
o local labour markets
o cultural differences
what is I-HRM
- HRM in international context
- Cultural differences between countries; understanding and managing their impact
- Institutional differences between countries; understanding and managing their impact
- Strategic HRM in an international context; role of HRM in the strategy of
organizational in the international context.
- ‘the worldwide management of people in the multinational enterprise’ (Poole 1990)
- ‘all issues related to the management of people in an international context...[including]
human resource issues facing MNCs in different parts of their organisations... [and]
comparative analyses of HRM in different countries’ (Stahl and Bjorkman 2006).
- ‘the ways in which the HRM function contributes to the process of globalization
within multinational firms’ (Sparrow and Braun 2007)
Two core debate in the literature
1. Universalists vs. contextual paradigm (more of a mental model, no debate perse but
people just have a stand without them knowing it, we are more on the contextual side)
a. Universalists= the idea that there is best practices in hrm, it applies no matter
the context or country, the same result will follow as HR is a science and we
look for universal truth. There are rules on how to compensate and engage
people etc. this is dominant in the US and because of the role of the US in the
global economy, and because this is such a great country, when someone talks
about the universal rules these are US universal rules
i. This is easy to implement
ii. Search for universal truths - best practice
iii. Apply everywhere with the same outcomes
iv. Work usually based on one country and a handful of cases (leading
organizations) predominantly in the USA
v. Simple – ‘best’ ways of doing things, clearly links with the needs of the
industry
vi. Fails to meet experiences and reality of HRM in different
(non-USA/non-Western) contexts
b. Contextual= it is not matching context always because there are always
differences in context and between counties
, i. It depends so it is more complex but it might lead to better fit and thus
smoother working.
ii. Context matters a lot and the outcomes of HR practices are dependent
on the context
iii. Focus more on what the typical organizations are doing
iv. Goes beyond the organization to reflect the context in which the
organization operates
v. Not as simple (no universal truths)
vi. But provides more insight into local, regional issues
Farndale, Raghuram, Gully, Liu, Phillips, & Vidović (2017)
2. Convergence vs. divergence debate
a. Convergence= there is globalization and digitalization so ideas and people
spread around easier and this makes tasks and practices more standardized and
the most popular practices will be spread more easily so this is most in line
with the universalists.
i. HRM practices are becoming alike across countries
ii. Directional convergence/directional similarity
iii. Final convergence
1. Why ? globalization, industrialization, digitization, and
information flow
b. Divergence= even if there is internationalization and globalization, there will
never be a point in which HR is the same everywhere in the world. This links
to the local/global dilemma. If HR practices become similar, do we need to be
local and focus on this as well?
i. each country continues to have their own approach to HRM
1. Why? Differences across nations in culture and institutions
Farndale, Raghuram, Gully, Liu, Phillips, & Vidović (2017)
Mayrhofer, Brewster, Morley, & Ledolter (2011)
What evidence is there about convergence vs divergence? What did Mayrhofer et al
(2011) find?
They looked at a lot of different HR practices in Europe and they found out that there is no
final convergence but there is this movement or direction towards convergence. Things are
increasing in the same way and going into the same direction for some of the practices.
- No final convergence
- Evidence for directional similarity in some HRM practices in European countries
What does this mean?
- Global and regional influence on HRM practices
- Still a role for national contextual differences
- Convergence/divergence debate not uniform across all HRM practices
A lot of the HR research comes from specific countries and this is to be applied to other
countries as well but some ideas might not translate to other countries as not all are equally
representative. Keep in mind what countries are being focused on and what this means for
your context.
Four components of IHRM
1. Cross cultural management
a. Nations have their own cultures of values and beliefs reflected in how they
operate and in national intuitions
, b. Understanding these cultural differences and differences in behaviors and
attitudes
c. Understanding in the impact on HRM
2. Comparative HRM
a. Compare HR practices between countries and region
b. Understand differences in intuition across countries
c. Understand how differences in cultural and institutional factors impact HRM
3. Strategic IHRM
a. How to manage HRM in the different national contexts of MCNs
b. How internationalization influences HRM
c. Global integration versus local responsiveness- debate linked to convergence s.
divergence
4. Critical perspective
a. Criticizes IHRM for taking a managerialist and economic perspective
b. Being critical about what MNCs are doing and what issues and justice arise.
Lecture 2
Explaining differences in HRM: culture vs. institutions
- Culturalists; culture shapes how individuals make sense of things and what they
consider is good and right
- Institutionalists; social structures shape how individuals make decisions and what
work is considered legitimate, reasonable and appropriate
Culture= the norms, values, habits that people share, related to intergroup things. There are
200 definitions of culture and it is a complex concept.
Cross-cultural management
• Understanding, researching, and revising assumptions about the core values that
differentiate cultures
• Understanding the implications for behaviors at work
What is culture?
One of the core elements of culture is that is a shaping process
- The problems human societies face are universal, but different groups will resolve
them differently
- These resolutions/solutions are internalized, become taken for granted, and shape the
way in which groups live
Across definitions/conceptualization, it is agreed that culture is (1) multi-layered, (2) shared
among members of a group/ society (3) developed over a long period of time and (4)
relatively stable
• Kluckhohn and Strodtbeck (1961) argued that the basic elements making up
national-level cultures lie in the responses to six fundamental questions:
1. Who are we? Are we (people) fundamentally good or bad?
2. How do we relate to the world? How do we conceive of nature? can we bend this
3. What do we do? What is status based on?
4. How do we relate to each other? Are we individuals or members of a group? is my
individual need more important than the needs of the community and the group?
5. How do we think about time? are all parts of time interrelated?
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