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Lecture 3.1.3 PPT - Dimensions of IHRM

The document discusses the approaches and dimensions of international human resource management (IHRM). The four main approaches of IHRM are: ethnocentric, which uses only parent country nationals; polycentric, which uses only host country nationals; geocentric, which recruits the most suitable employees regardless of nationality; and regiocentric, which uses managers from various countries within geographic regions. The three dimensions of IHRM are the activities of procuring, allocating, and utilizing employees internationally, the three types of employees - parent country nationals, host country nationals, and third country nationals, and the three types of countries involved - home, host, and third countries.

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427 views

Lecture 3.1.3 PPT - Dimensions of IHRM

The document discusses the approaches and dimensions of international human resource management (IHRM). The four main approaches of IHRM are: ethnocentric, which uses only parent country nationals; polycentric, which uses only host country nationals; geocentric, which recruits the most suitable employees regardless of nationality; and regiocentric, which uses managers from various countries within geographic regions. The three dimensions of IHRM are the activities of procuring, allocating, and utilizing employees internationally, the three types of employees - parent country nationals, host country nationals, and third country nationals, and the three types of countries involved - home, host, and third countries.

Uploaded by

Divya
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Topic for Discussion

• Approaches of IHRM
• Dimensions of IHRM

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Approaches of IHRM

Ethnocentric Polycentric
Approach Approach

Geocentric Regiocentric
Approach Approach
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Ethnocentric Approach

• When a company follows the strategy of choosing only from the citizens of the
parent country to work in host nations, it is called an ethnocentric approach.
Normally, higher-level foreign positions are filled with expatriate employees
from the parent country. The general rationale behind the ethnocentric
approach is that the staff from the parent country would represent the interests
of the headquarters effectively and link well with the parent country.

3
Polycentric Approach

• When a company adopts the strategy of limiting recruitment to the


nationals of the host country (local people), it is called a polycentric
approach. The purpose of adopting this approach is to reduce the
cost of foreign operations gradually.

• The polycentric approach uses natives of the host country to


manage operations in their country and natives of the parent
country to manage in the home office

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Geocentric Approach

• When a company adopts the strategy of recruiting the most suitable persons for the
positions available in it, irrespective of their nationalities, it is called a geocentric approach.
Companies that are truly global in nature adopt this approach since it utilizes a globally
integrated business strategy.

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Regiocentric Approach

• Company's international business is divided into international geographic regions. The


regiocentric approach uses managers from various countries within the geographic regions
of business. Although the managers operate relatively independently in the region, they
are not normally moved to the company headquarters. The regiocentric approach is
adaptable to the company and product strategies

• The regiocentric approach places managers from various countries within geographic
regions of a business. In this example, the U.S. parent company uses natives of the United
States at company headquarters. Natives of European countries are used to manage the
Italian subsidiary

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Dimensions of IHRM

• The three dimensions of international HRM are described here briefly


• 1. There are three broad activities in international HRM — procuring, allocating, and
utilizing employees for international operations. These three broad activities cover all HR
functions which are relevant for domestic operations and discussed in different parts of the
text.
• 2. There are three types of employees in a multinational firm based on their place of origin
— parent country nationals, host country nationals, and third country nationals. Parent
country nationals (PCNs) are those whose origin is the country where the firm’s
headquarters are located.
• Host country nationals (HCNs) are those whose origin is the country where the firm’s
operations are located. Third country nationals (TCNs) are those whose origin is a country
which is neither the home country nor the host country.

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1. Parent-Country Nationals (PCNs) – Employees belonging to the country where a
company’s headquarters are located are called as parent-country nationals or
home country nationals.

2. Host-Country Nationals (HCNs) – Employees belonging to country where the


company has set up a subsidiary or a manufacturing facility are called host-
country nationals.

3. Third-Country Nationals (TCNs) – Employees who work in the home or host


country facility of the company but are not nationals of either are called third-
country nationals

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3. There are three types of countries involved in international HRM activities —
home country, host country, and third country.
Home country is the country of origin of the firm.
Host country is the country in which operations of the firm are carried on. For a
single firm, there may be many host countries.
Third country is a country from where resources — human and other resources —
are procured. There may be many third countries

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