The Role of the International Hr Manager

The Role of the International HR Manager

For many people international HR management (IHRM) is synonymous with expatriate management. IHRM, however, covers a far broader spectrum than just the management of expatriates. It involves the worldwide management of people. Although International HR (IHR) managers undertake the same activities as their domestically-based colleagues, the scope and complexity of these tasks will depend on the extent of internationalisation of the organisation. In this article, Dr Hilary Harris, Director of the Centre for Research into the Management of Expatriation (CReME), examines the factors influencing the role of the IHR manager and how this affects choices in terms of IHR policy and practice.

Differences between Domestic and International HRM

In any organisation, the primary objective of the HRM function is to ensure that the most effective use is made of its human resources. To achieve this, HR professionals undertake a range of activities around sourcing, development, reward and performance management, HR planning, employee involvement and communications. If the organisation has a strategic HR function, these activities will support and inform organisational strategy. HR professionals are also used extensively in organisational change and development initiatives.

The IHR manager will also be working to the same objectives, however, the scope and complexity of their role is increased as a result of working across borders. A useful model of the nature of international HRM is presented below:

Source: Adapted from P.V. Morgan 1986. International human resource management: Fact or Fiction, Personnel Administrator, vol. 31, no.9, p44.

Figure 1. Model of International HRM

This depicts IHRM as having three dimensions:

1. The three broad human resource activities: procurement, allocation, and utilization.

2. The three national or country categories involved in international HRM activities: the host country where a subsidiary may be located, the home country where the firm is headquartered, and "other" countries that may be the source of labour or finance.

3. The three types of employees of an international firm: host-country nationals (HCNs), parent-country nationals (PCNs) and third country nationals (TCNs).

Working in these different dimensions creates far more complicated scenarios for each of the main HR activities listed above than in the domestic context. For instance, managing careers in an international organisation can involve multiple international moves for all three types of employees. Administration of expatriate management alone often necessitates the creation of a specialist department.

Several other factors will influence the degree to which international and domestic activities of the HR function differ (Dowling 1999). These include:

1. The cultural environment

2. Nature of international operations

3. Attitudes of senior managers to international operations

Figure 2. Factors influencing differences between international and domestic HRM activities

The Cultural Environment

The need to work effectively in multi-cultural environments is an issue for both domestic and internationally-based organisations. Domestic-based organisations now have increasingly diverse workforces as a result of the ethnic mix of the UK population and understand the need to take cultural differences into account. For internationally-based organisations, however, the need is more acute. Many of the difficulties recorded in the rapidly expanding area of international joint ventures and alliances can be attributed to a lack of cross-cultural understanding on the part of the senior teams involved. It appears that whilst huge amounts of time and effort are expended in analysing financial and business aspects of such operations, scant attention is paid to the people aspects. This is problematic, given the evidence from cross-cultural research (see Hofstede (1991) and Trompenaars and Hampden-Turner (1997)), that different national cultures often have conflicting views on appropriate management styles and organisational processes. Equally, cultural differences need to be borne in mind when deciding on HR systems. Can a Western-style appraisal system be implemented throughout the world? How do different cultures view reward? The IHR manager needs to be aware of the implications of cultural differences when making HR policy decisions.

Nature of International Operations

The scope of the IHR manager's job will be determined by the nature of the organisation's international operations. A central tension for organisations operating internationally is the need to balance the advantages of centralisation with the need to be sensitive to local demands - the "global versus local" dilemma.

Figure 3. Organisational strategy: for global competitive advantage

Organisations may run their operations as a set of autonomous units, or they may strive for complete integration, depending on factors such as industry type and strategic objectives. The challenge for the IHR manager is to design and implement HR policies and practices that reflect these choices. For a headquarters HR manager in a multi-domestic organisation, there would be a relatively small international component to his or her work. A headquarters HR manager in a transnational organisation which strives