International Human Resource Management

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IHRM Chapter 3
International Human Resource Management
Managing people in a multinational context
The context of cross-border alliances and SMEs
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Chapter Objectives

• We learn about
• Global perspective on IHRM with external partners
• Cross-border alliances
• Equity-based alliances (MAs, IJVs)
• Globalizing SMEs

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Terms
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Figure3-1
Equity and non-equity modes of foreign operation
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Figure3-2
The formation processes of MAs and HR challenges
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Figure3-3
Mergers and acquisitions in US billions
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Typical cross-border MA problems

1. Within first year of merger, up to 20 of
   executives may be lost. Over a longer time frame,
   this tends to increase even further.
2. Personnel issues are often neglected.
3. A high number of MAs fail or do not produce the
   intended results.

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Impact of the human integration and task
acquisition on acquisition outcome
Figure3-4
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Figure3-5
HR activities in the phases of a cross-border MA
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Table3-1
Post-acquisition trends in HRM practices
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Figure3-6
Formation of an international equity joint venture
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The main reasons for engaging in an IJV

1. To gain knowledge and to transfer that knowledge
2. Host government insistence
3. Increased economies of scale
4. To gain local knowledge
5. To obtain vital raw materials
6. To spread the risks (e.g. share financial risks)
7. To improve competitive advantage in the face of
   increasing global competition
8. Provide a cost effective and efficient response
   forced by the globalization of markets

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Figure3-7
IJV development stages and HR implications
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Table3-2
SME definition
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Top 10 barriers to international markets by SMEs
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Figure3-8
SME employer image and internationalization
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Figure3-9
Learning in small organizations
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Discussion Questions

1. Describe the formation process of cross-border
   mergers, acquisitions and international joint
   ventures. What are the major differences?
2. Describe the development phases of an MA and the
   respective HR implications.
3. Outline the development phases of an IJV and the
   respective HR implications.
4. In which ways do cultural and institutional
   differences impact the HR integration in MAs and
   in IJVs?
5. What are the barriers to internationalization for
   SMEs?
6. What are some of the typical challenges for HRM
   in internationalized SMEs?

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