The Link Between An International Business's Strategy And Its Human Resource Management Policies

Define the link between an international business’s strategy and its human ressource management is very important to understand human ressource management. The world of work as we know it today is changing rapidly from the introduction of new labour laws, globalisation, demographics, an ageing workforce.

My analysis of this question will be based on two parts. In the first part, I will define the principal key term of our topic which is « human ressource management » then I will explain and analyse the notion of human ressource management . In the second part, I will introduce the answer of our question explaining the notion of international business’s strategy.

Many people find Human Resource Management to be vague and broad concept not least because of his variety of meanings. We can define Human Resource Management as the process of managing people in organizations in a sctructured and thorough manner. The field of international Human Ressource Management has been characterized by three broad aproaches but the principal approach seeks to focus of Human Ressource Management in mutinational firms.

The range of HRM responsibilities within an organization is very wide. HRM refers to those activities undertaken by an organization to effectively utilize its human ressources. We note among this activities:

1. Human Ressource planing

2. Staffing (recruitment, selection, placement)

3. Performance management

4. Education, training and development

5. Compensation which means remuneration and benefits

6. Industrial relations

According to the model developped by Morgan, IHRM is based on three dimensions. We will focus on the third categorie. They are three categories of employees of an international firm :

• HCNs ( Host Country Nationals) : an employee who is a citizen of a country in which an organization’s branch or plant is located, but the organization is headquartered in another country.

• PCNs ( Parent Country Nationals) : a person who is working in a country other than their country of origin.

• TCNs ( Third Country Nationals) : an employee who is not a citizen of the home or host countries.

HRM must also determine when to use expatriate managers (citizens of one country working abroad), who should be sent on foreign assignments, how they should be compensated, how they should be trained, and how they should be reoriented when they return home.

Human ressource practices, policies and processes are imbedded in the strategic, structural and technological context of MNE (Multinationals Enterprises). The MNE can be defined as an organization that controls and operates business establishments in more than one foreign country.

The IHRM litterature uses four terms to describe MNE approaches to managing ans staffing their subsidiaries which are ‘ethnocentric’, ‘polycentric’, ‘geocentric’ and ‘regiocentric.

The ‘ethnocentric approach to staffing policy fills key management positions with parent-country nationals(PCNs). It make sense for firms with an international strategy.

The ‘polycentric’ approach recruits

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