Practising HRM in a different environment, culture and ethics background is sure challenging. Nevertheless, if IHRM is being executed appropriately, the reward reaped will contribute to the organisation’s growth indirectly.
As a matter of fact, there is a vast difference between domestic HRM and IHRM, where the latter being much more complex and challenging. According to Stone (2008), domestic HRM is being defined as: ‘HRM as practised within the geographical boundaries of one country. Its focus is the management of people in a single-country context’
Deriving from the basic of Human Resource Management (HRM), International HRM can be view as add on to the already existing HRM policies. Stone (2008), posed some valid questions with regard to developing international HRM policies. Some examples were: what kind of organisation are we looking at?
HRM (Human Resource Management) and IHRM (International Human Resource Management) differ mainly in their scope of managing employees (Stone, 2013). While HRM only deals with employees located in the home country , IHRM refers to the development, recruitment, selection and management of international employees either abroad or in the home country. The concept of IHRM has become increasingly important with the rise of Multinational Enterprises (MNEs) operating across many countries and continents (Hollinshead and Leat, 1995). Another prominent difference is that IHRM, in addition to the basic functions of HRM (such as training and development, health and safety, compensation… etc.), also includes employee training through cross-cultural communication workshops and seminars to overcome cultural barriers and to facilitate cooperation across cultures (Downling et al. 2013). The main factors which affect IHRM are legal, political, economic and cultural (Aswathappa, 2008). The legal and political factors determine how (if at all) an organisation could access a foreign labour market or employ foreign nationals in their home country. The economic dimension is important in case the organisation wants to exploit wage differences by moving operations or productions abroad. Finally, possibly the most influential factor, culture must be considered as it could ultimately determine the outcome of employing culturally different people to achieve organisational objectives.
The main factors which affect IHRM are legal, political, economic and cultural (Aswathappa, 2008). The legal and political factors determine how (if at all) an organisation could access a foreign labour market or employ foreign nationals in their home country.