HR

Definition of International Human Resource Management (IHRM)

  • IHRM: Involves the study and application of all human resource management activities as they affect managing human resources in global enterprises.

Drivers of Internationalization

  • Trade Agreements:

    • Reduction of trade barriers.

    • Establishment of agreements such as:

      • World Trade Organization (WTO): Facilitates international trade by regulating and promoting trade agreements.

      • European Union (EU): Promotes economic integration among member states, simplifying cross-border trade.

      • North American Free Trade Agreement (NAFTA): Eliminated trade barriers between the U.S., Canada, and Mexico, aiding international trade.

  • Search for New Markets and Reduced Costs:

    • Global competition pressure.

    • Organizations explore new markets for growth and seek cost efficiencies through international expansion, enabling competitive advantages.

Growth and Spread of Internationalization

  • Increasing interconnectedness of global economies.

  • Shift in global economic power:

    • U.S. economy's share of global GDP has decreased from 53% to less than 28% over the past 50 years, indicating significant growth in other regions.

Settings of IHRM

  • Domestic Firms:

    • Operate primarily within their home country.

    • Still affected by global trends and international competition.

  • International Firms:

    • Export products or services with minimal foreign direct investment.

  • Multinational Enterprises (MNEs):

    • Extensive investments in multiple countries requiring complex international human resource management strategies.

Development of IHRM

  • Traced evolution of IHRM as a discipline, highlighting:

    • Growing importance due to globalization.

    • Necessity for effective management of a diverse workforce across borders.