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International Human Resource Management Essay

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            International Human Resource Management (IHRM) refers to a set of activities that aim at human resource management at the international level (Dowling, Festing & Engle, 2017, p. 17). IHRM aims at meeting organizational goals and attainment of competitive advantage over competitors at both the national and international levels. It therefore involves HRM issues arising from the internationalization of firms or businesses. Corporate strategic planning is the systematic process of determining future goals of an organization (Nieto, 2014, p. 34). It therefore encompasses setting of goals to be achieved within a determined period of time, performance of SWOT analysis of the organization, selecting alternatives to achieve set goals and fundamental assignments about future economic and technological environments. In the international business scene, IHRM is an essential part in the corporate strategic planning as it assists organizations in identifying and acquiring effective human resources in order to achieve future goals (Reiche, 2019, p. 52).

Strategic HRM and Corporate Performance

            Human resource is deemed to be the most essential resource of firms today. This therefore calls for a clear understanding of workers’ expectations by organizations so as to achieve desired performance. When managing their workforce, organizations desire remarkable employee behavior such as competence, motivation, cooperation between themselves and managers, and commitment. Strategic HRM involves linking of staff with company objectives in order to establish business performance (Mello, 2019, p. 155). SHRM is certainly a competitive advantage as it purposes to enhance an organization’s performance by aligning with business. For firms to attain desired goals and objectives, they should manage their human resource efficiently and effectively since attainment of goals also translates in better performance.

            Strategic HRM concentrates on long term issues within the framework of an organization’s objectives and changing nature of work (Kramar, Bartram, Gerhart, Hollenbeck, Noe & Wright, 2014, p. 164). Various research has been conducted by different scholars on strategic HRM and organizational performance. SHRM has been defined as HRM practices and policies that affect employees’ performance, attitude and behavior. These policies focus on various important actions expected to improve performance and enable organizations to acquire competitive advantage which include but not limited to: employee security, extensive training, inclusion of employees in decision making and disclosing performance information to employees. One essential role of SHRM is concentrating on the improving their employees so as to gain competitive advantage (Hitt, Ireland & Hoskisson, 2017, p.164). Consequently, organizations are now more conscious to the effects of human resource policies and appropriate practices on quality, financial performance and productivity. Generally, achievement of organizational performance is therefore dependent on the employees’ behavior (Chapman-Clarke, 2016, p.158). This understanding has led organizations to come up with policies and practices that motivate employees thus impacting on organizational performance.

Key Challenges HRM/ IHRM Faces in Achievement of Corporate Strategy Goals

            Despite the opportunities presented by globalization and technological advancements, firms operating in the international market face several challenges. With the extension into global markets, the responsibilities of human resource tend to increase and thus HRM needs to be more flexible and enhance local responsiveness so as to realize success (Reiche, 2019, p. 62).

Generally, human resource faces the following challenges in its functions to ensure that corporate strategy goals are met:

Staffing: This involves recruitment and selection of employees. Finding a candidate who is suitable for a given job from a pool of job seekers is a difficult task.

Performance appraisal: Getting negative feedback from HR managers can affect future work of employees. HRM should ensure they do not consider performance appraisal as a routine process like any other (Chapman-Clarke, 2016, p.198).

Balance between management and employees. A HRM is expected to find a good balance between the interests of the management which include loyalty, profits, and those of employees such as career development and safety at the workplace work (Kramar, Bartram, Gerhart, Hollenbeck, Noe & Wright, 2014, p. 74. As the business continues to grow, its management, structure and internal progressions grow with it. Some of the workers find it hard to cope with the adjustments. Many firms experience a decrease in productivity and morale during these times of adjustments (Chapman-Clarke, 2016, p.178).

Dealing with trade unions: Matching management’s interests and the demands of a union can be a tricky balance. However, to achieve strategy goals, HRM should handle union members skillfully to avoid opposition of an organization’s policies and procedures.

Training, development and compensation. HRM involves training of the workforce to sharpen, enhance and develop their knowledge and skills. Human resource managers are also responsible for compensation of employees in terms of salaries and allowances. (Chapman-Clarke, 2016, p.188).

In the international scene, the IHRM also faces the above challenges including the ones listed below:

Cultural diversity. Comprehension and maintenance of cultural diversity is very important with regards to it international HRM and poses a big challenge. Different people have different perspectives depending on the backgrounds from which they come (Hopkins, 2016, p. 213). Cultural diversity creates a challenge in communication and also variance in expectations of workers and their norms.

Compliance with international laws. This has always been a major problem for international HRM(Barmeyer & Franklin, 2016, p.186). Keeping up with adjusting employment laws is a hard thing for most firms and particularly to the business owners. Many firms choose to ignore the employment laws. The basic reason for ignoring these laws is that these employers think that the laws do not apply to their businesses. However, doing so would mean that audits, lawsuits could probably occur in the business and this could lead to closure of the firms work (Kramar, Bartram, Gerhart, Hollenbeck, Noe & Wright, 2014, p. 16).

Benefits and compensation. Enactment of compensation strategies by multinational organizations is quite complicated as a result of the diverseness found in different countries (Martocchio, 2015, p. 189). Regarding incentives, for instance, company policies may not be effective in all markets.

Instances Of How IHRM Supports International Strategic Objectives.

            International HRM is a process that encompasses procurement, allocation and utilization of employees for international operations to achieve stated objectives (Crawshaw, Budhwar & Davis, 2017, p.197). The Barlett & Ghoshal Matrix is a common framework used in differentiating forms of international business strategies based on two criteria namely: local responsiveness and global integration. The objective businesses that are highly integrated globally is to cut down on costs through creation of economies of scale by offering a more standardized product throughout the world (Raghunath & Rose, 2017, p. 198). Businesses that are highly locally responsive adapt their products and services to specific needs of locals.

 Multi-domestic strategy: In this strategy, there is a combination of low global integration and a high local responsiveness. Multi-domestic companies customize their products so as to meet local markets needs all over the world. Nestle is an example of a multi-domestic company. Nestle tailors its products according to different tastes and preferences in local markets. Each market therefore, has a unique marketing strategy.

 Global strategy: The characteristics of this strategy are a complete contrast to those of multi-domestic strategy. Global firms are characterized by high integration and low responsiveness (Peng, 2017, p. 211). They are highly centralized and subsidiaries always depend on the head office. Their role is therefore to execute decisions made by the parent company. Products and services offered by these companies are standardized worldwide and their objective is to maximize efficiency so as costs are reduced. An example of a global company is Gucci, a company that sells the same luxury goods in all countries

Transnational strategy: In this strategy, both integration and high responsiveness are high. A transnational company possesses features of both a multi-domestic company and a global company. It tries to achieve a balance between the desire to achieve efficiency and the need to adjust to local preferences within different nations. An example of such a company is Unilever. IHRM plays an important role in transnational strategy, for example, Unilever leverages its HR function worldwide as a source of competitive function.

International strategy: Under this strategy, there is low integration and low responsiveness. An international company has low interest in local adaption and global integration with majority of activities being maintained at the head office (Verbeke, 2018 p. 212). Production takes place in the home company of the producing company produced and products send to customers in different parts of the world hence it is also called the exporting strategy. An example of an international company is Apple which sells its products all over the world but the company is headquartered in the United States. Through IHRM, Apple has been able for instance, to enter into the Chinese market. IHRM has also helped Apple in learning and understanding the recruitment process in China work (Kramar, Bartram, Gerhart, Hollenbeck, Noe & Wright, 2014, p. 154).


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