Introduction to IHRM
The term IHRM or the international human resource management can be defined with a certain set of activities that targets the entire operation of the human resource management to the international platform (Andersson et al., 2019). The main motive of the IHRM is to gain the objectives of the organization and develop the right kind of competitive advantages over all the competitors present in the national as well as international level. There are several models and frameworks that help in explaining the IHRM and ensure its success. These models and frameworks will be discussed below:
- Morgan’s model: this model of international human resources management is a three dimensional model. This three dimensional model talks about: firstly the human resources activities are about procurement, allocation and the utilization of the human resources, secondly, the involvement of the nation which categories the activities in three sections: host, home and other relevant (Primecz, 2020). Lastly it talks about three categories for the employees in an international firm such as, HCNs, PCNs and TCNs. alongside the dimension it helps in promoting the training and development for various cultural aspects, making proper planning for the approaches and considering the welfare of the human resources of the institution or the multinational companies which helps in promoting the value as well.
- Social responsibility in IHRM: the framework or the concept talks about managing the entire workforce of the international organizations as one of the important stakeholders. The framework helps in the addressing the welfare and the concern about the employees under various kindle legal compliances as well as engaging the employees for the social performances for the organization (Farndale et al., 2019). This social responsibility frame follows all the legal acts that help in determining the concepts of welfare for the employee in the daily operation.
- Generic IHRM model: this specific model refers to the interaction between home HRM systems, firm specific factors and the host contextual factors (Dalton and Bingham, 2017). His interaction follows every kind of policy and practice related to international human resources management. Several contextual factors such as political, legal, social, economic or socio-cultural factors. These are the factors that are considered for the strategies for the human resources management and the internal business approaches.
The IHRM model, Morgan’s model, talks about the dimensional model where the individuals in the organizations are segregated for different activities based on three categories, HCNs, PCNs and TCNs (Reiche, Lee and Quintanilla, 2018). This model opens up the opportunities for the right kind of training and development about the culture and language alongside the skills that are necessary for the organizations. On the other hand, it initiates the practices of compensation which is also similar to the social responsible frameworks. The main advantages of the compensation management are that it helps to motivate the employees for the performances and betterment on productivity. As the social framework explains, the welfare of the employees of the host and expatriates can be helpful in adding up the values to the organizational operation in the international operation. On the other hand, the generic international human resource management model initiates a huge advantage which helps in analyzing all kinds of contextual factors such as political or social factors (Turker, 2018). In this way, the international businesses, the multinational companies can perform proper strategies for the development of the goals and objectives. On the other hand, the generic IHRM model also encourages the purpose of generating and retaining the appropriate and skillful workforce. The IHRM models can be helpful in practicing the international human resources management in the international platform where it helps in encouraging the communication of both verbal and non verbal way, understanding the culture with the help of contextual factors of the models help in the gathering the skillful workforce and develop potential workforce for the achievement of the goals and objectives through the help of the successful IHRM.
There are different kinds of dimensions as well as levels existing in the concert of distance between the countries. But in recent years, the term has been catching a lot of attention in every sector or organizational practice. The entire concept of cultural distance is very new in the international human resources management and this is being in the limelight in the current IHRM practices (Zhang, Tian and Hung, 2020). The main definition of cultural distance is about the degree of differences between the norms and the values from one country to another. There are several attributes that are affecting the cultural distances which are such as the differences in languages, ethnicities, and the lack of the connective nodes between the ethnic or any kind of social network, lastly the different kinds of religion as well as social norms. The culture always has a huge influence on nearly every single person operating the human resource management. This culture plays a major role which technically decides about the success or failure of a company for the establishment on a forengn land (Boateng et al., 2019). Thus the differences of the culture can have an impact on the multinational companies while developing workforce diversity. According to Hofstede, there are several elements that can be found in multinational practices. These elements are such as individualism versus collectivism, high or low power distances, high or low uncertainty avoidance and masculinity versus femininity and lastly the differences between the time horizons. From the establishment of international businesses or entering globalization the multinationals companies always face challenges.
Models of IHRM
The multinational companies are increasing their recognition by the help of success in the global marketplace depending on the skillful labor and the establishment of the diversity in the workforce (Duan et al., 2020). The culture distance or in other words, the differences of culture among the countries hinders the staffing and hiring process, value of the firm and other management practices. On the other hand the cultural distances also restricted the managers of the investments in the other multinational companies. The cultural distances also hinders the adaption of global business models for the local market, identification of the sub cultural differences and the understanding of the local business practices. It also leads the companies to fail to identify new opportunities and adapt all the management practices across the cultures in a multinational organization.
Institutional distance is another type of distance or degree of differences between the countries. This institutional distance is a measurement for all kinds of cross culture differences and specifically refers to the extension of all kinds of similarities or dissimilarities among the regulatory, cognitive as well as the normative institutions (Li et al., 2020). The recent studies about the institutional distances have shown that the distance is not really decreasing but it is helping in increasing the various levels of the social and environmental factors and the exchange among the businesses. Although the institutional distance will be continuing putting challenges for managing the MNCs in the continuous grapple of the host country. In international businesses, institutional distance plays a major role in influencing the behavior of the MNC. The researchers have revealed that in the institutional differences, the businesses from the cross cultural countries differ while coordinating for the activities. Secondly, the institutions may differ in strengths (Fortwengel, 2017). Thirdly, in international business, all the institutions of the global platform differ from one another on the intra-national level, which explains the institutions can differ through practices even though they are geographically close to one another.
In institutional distance, the main factors that influence the differences in the behavior are the norms, rules, regulations and cognitions. Apart from that, this distance comprises the four dimensions in the international business practices such as coordination, resources, strength and the thickness. These create a boundary for the multinational companies to establish good relationships with the other countries for proper coordination in business success.
As for the expatriates who are involved in the practices of the international businesses, the cultural and institutional distances create a boundary in their respective practices. It is important to determine the certain factors that hinder the expatriates from the international business practices. Both the cultural and institutional distances can be mitigated through the right kind of training and development process which can help in understanding the gap between the cross cultures, or the common organizational practices. It is to be suggested for the MNCs to pay more attention to the training and development of the expatriates for the cross-cultural factors, institutional factors and the communication. It has been observed through various kinds of research about how the lack of the communication among the host staff and expatriates can lead to uncertainties or anxiety between the host staff and the expatriates that lead to mistrust and misattribution (Abugre, Williams and Debrah, 2020). These are also considered as the challenges in the multinational corporation. Thus it is necessary to train the expatriates about the norms, values and the regulation of the host countries in order to mitigate the lack of knowledge about the same. In this way the organizations can be successful in enhancing the relationship and the communication among the institutions. The cross-cultural communication can also be effective for the oral and non-verbal communication which enhances behavioral approaches in the multinational corporation that leads to success in the cooperation for the international business purposes.
References
Abugre, J.B., Williams, K. and Debrah, Y.A., 2020. Dimensions of expatriates adjustment in distant subsidiaries: A field study of a sub?Saharan African institutional distance. Thunderbird International Business Review, 62(4), pp.371-384.
Andersson, U.R., Brewster, C.J., Minbaeva, D.B., Narula, R. and Wood, G.T., 2019. The IB/IHRM interface: Exploring the potential of intersectional theorizing. Journal of World Business, 54(5), p.100998.
Boateng, A., Du, M., Bi, X. and Lodorfos, G., 2019. Cultural distance and value creation of cross-border M&A: The moderating role of acquirer characteristics. International Review of Financial Analysis, 63, pp.285-295.
Dalton, K. and Bingham, C., 2017. A social institutionalist perspective on HR diffusion: historical and cultural receptivity to HRM in a post-communist context. The International Journal of Human Resource Management, 28(6), pp.825-851.
Duan, Y., Huang, L., Cheng, H., Yang, L. and Ren, T., 2020. The moderating effect of cultural distance on the cross-border knowledge management and innovation quality of multinational corporations. Journal of Knowledge Management.
Farndale, E., Horak, S., Phillips, J. and Beamond, M., 2019. Facing complexity, crisis, and risk: Opportunities and challenges in international human resource management. Thunderbird International Business Review, 61(3), pp.465-470.
Fortwengel, J., 2017. Understanding when MNCs can overcome institutional distance: A research agenda. Management International Review, 57(6), pp.793-814.
Li, W., Wang, C., Ren, Q. and Zhao, D., 2020. Institutional distance and cross-border M&A performance: A dynamic perspective. Journal of International Financial Markets, Institutions and Money, 66, p.101207.
Primecz, H., 2020. Positivist, constructivist and critical approaches to international human resource management and some future directions. German Journal of Human Resource Management, 34(2), pp.124-147.
Reiche, B.S., Lee, Y.T. and Quintanilla, J., 2018. Cultural perspectives on comparative HRM. In Handbook of research on comparative human resource management. Edward Elgar Publishing.
Turker, D., 2018. Social Responsibility and Human Resource Management. In Managing Social Responsibility (pp. 131-144). Springer, Cham.
Zhang, H., Tian, M. and Hung, T.K., 2020. Cultural distance and cross-border diffusion of innovation: a literature review. Academia Revista Latinoamericana de Administración.
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