The general concept of international human resources management (IHRM)
The first chapter covered our textbook illustrated the general concept of international human resources management (IHRM) and defined it as the study and application of all human resource management activities as they impact the process of managing human resources in enterprises in the global environment. IHRM is needed because over the last 50 years, the economies of the world have become increasingly more integrated. I found it fascinating that the book stated that 5.27 million Americans worked for foreign-owned subsidiaries in 2010 (Tarique, Briscoe, & Schuler, 2016). I never though the number would be so high but considering I myself work for a foreign-own company, I should probably have expected it.
Because of the variety of firms operating internationally, there are options that these firms have in terms of how they approach international operations including the three possible approaches to management – ethnocentric, polycentric, and geo/regiocentric. The ethnocentric approach focuses on the home country or headquarters of the organization. Polycentric organizations take the opposite philosophy, decentralizing control and activities to all of the subsidiary operations worldwide. The geocentric approach considers the globe as one big marketplace, no longer differentiating between parent and host countries. A regiocentric view is similar, just dividing the globe into regions such as the Americas, Asia, Europe, etc. (HRER 803 Lesson 2 Notes, 2022).
It was remarkably interesting to read about these approaches and match one to my current employment situation. The organization that I work in now, L’Oréal, uses a regiocentric approach. I work in Human Resources for L’USA or L’Oréal USA. All of our Human Resources teams specifically manage those working in the U.S. However, I do believe that our Chief Human Resources officer for L’USA does report to the overall Chief Human Relations Officer for L’Oréal globally who works in France. I am also part of the Research and Innovation (R&I) NA function as I work with these team specifically for North America. We have R&I Headquarters in South America, South Africa, Asia, and France, and like the U.S. the HRM for their R&I teams is managed by those in the country specifically. Does anyone where work for a multinational corporation who uses a different approach to international management?
I thought the video at the end of the Lesson 2 commentary did a great job of explaining the stages of internationalization including multi-domestic, global, and transnational and the strategies of each that differ by level of integration. The visuals were extremely helpful in connecting the domestic business with the global market opportunities and how this relationship evolves over time as the business strengthens (HRER 803 Lesson 2 Notes, 2022). It also demonstrated just how complex the framework of international human resources and employment relations can be.
I also found it quite interesting that the Bartlett and Ghoshal Typology article conveyed that the empirical test data from 166 subsidiaries of 37 multinational companies and found that Bartlett and Ghoshal’s typology of global, multidomestic, and transnational can be confirmed in large-scale settings. However, they did not find that any of the types were associated with positive performance (Harzing, 2000). I am wondering if the same test were to be conducted today (as the article was written over 20 years ago) if the results would be similar. I am thinking the data might be more convoluted as multinational corporations today rely so heavily on technology and can therefore partner with overseas subsidiaries much more easily than back then. Would the number of global firms be higher, and would their responsiveness be increased?
This lesson provided both a great introduction and background of IHRM, and also a lot to think about in terms of IHRM evolution and how it has progressed over time as well as the influencing factors that contribute to its progression.
References
Harzing, A.-W. (2000). An Empirical Analysis and Extension of the Bartlett and Ghoshal Typology of Multinational Companies. Journal of International Business Studies, 31(1), 101-120. Retrieved from https://ezaccess.libraries.psu.edu/login?url=https://www.jstor.org/stable/155623
HRER 803 Lesson 2 Notes. (2022). Lesson 2: Strategic International Human Resources Management and Employee Relations (SIHRM/ER). Retrieved from Penn State Canvas: https://courses.worldcampus.psu.edu/canvas/fa22/22281–17905/content/01_lesson/printlesson.html
Tarique, I., Briscoe, D. R., & Schuler, R. S. (2016). International Human Resource Management (Vol. 5). New York, New York: Routledge.
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