International Human Resource Management

UNIT-I
IHRM- Introduction, differences between domestic and international Human Resource approaches of
International Human Resource Management, Challenges in international labour market, Linking HR strategies to
International expansion strategies, multiculturalism: nature of culture, cultural dimensions, managing across
cultures: strategies, cross cultural differences and similarities.

 INTRODUCTION:-
International human resource management is the process of employing, training and developing and compensating
the employees in international and global organizations. An international company is one which has subsidiaries
outside the home-county which rely on the business expertise or manufacturing capabilities of the parent company.
Generally, an MNC is considered to have a number of businesses in different countries but managed as a whole
from the headquarters, located in one country.

According to Pigors and Myers, “International or domestic human resource management is a method of
developing the potentialities of employees, so that they get maximum out of their work and give best efforts to the
business organization”.

In the words of Edwin B. Flippo, “International or domestic HRM involves the planning, organizing, directing and
controlling of the procurement, development, compensation, integration and maintenance of people for the
purpose of contributing to organizational, individual and social goals.”

1. It enhances to develop managerial skills, organizational knowledge and technical abilities of HR managers and
employees;
2. To develop more and better handle of global business operations;
3. To manage and secure the performance, compensation and career path of employees;
4. To manage and organize cross cultural counseling and language training programme;

 Difference between Domestic and International HRM

It emerges that international HRM practices have to be different from those of domestic HRM. It is
characterized by more and varied HR activities, need for broader perspective, more involvement in
employees’ personal lives, high emphasis on change in employee mix, high risk exposure, and more external
influences. Let us go through the discussion of these characteristics and identify how international HRM
differs from domestic HRM.

1.More and Varied HR Activities:-

As compared to domestic HRM, in international HRM, there are more and varied HR activities. In
international HRM, the volume of the same HR activities which are relevant for domestic HRM too increases
because these activities have to be performed in a different context.

For example, when employee is chosen for an international assignment, he needs additional training which
would enable him to adjust in the new environment. This training will be in addition to training meant for
skill development for performing the job effectively.

2. Need for Broader Perspective:

As compared to domestic HRM, international HRM requires much wider perspective in respect of almost all
HR activities. It implies that HR managers have to consider a variety of factors in making decisions on any
issue of international HRM. Many of these factors are not relevant in the case of domestic HRM.

For example, while fixing international compensation packages, HR managers have to take into account the
cost of living of different international locations to bring some kind of parity among employees working at
different locations. Similarly, fringe benefits have to be provided to suit conditions of different locations.

3. More Involvement in Employees’ Personal Lives:

As compared to domestic HRM, HR managers are required to have more involvement in employees’
personal lives in the case international HRM. This higher level of involvement is required to ensure that the
employees are suitably placed in an international location with which they are not well familiar. This lack of
familiarity may be on a number of factors like housing, health care practices, meeting of legal requirements
of host country, etc.

4. High Emphasis on Change in Employee Mix:

In international HRM, high emphasis is placed on change in employee mix particularly in terms of
nationality of employees. Very often, it happens that when an organization establishes a business in a foreign
country, it recruits more number of employees from the country of its origin.

However, in order to have a favourable image in the country of its operations, it recruits and develops local
(host country) personnel. As a result, over the period of time, the proportion of local employees becomes
sizeable. This strategy is adopted by most of the multinationals. This process is taken on gradual basis.

5. High Risk Exposure:

There is high risk exposure in international HRM as compared to domestic HRM. The risk involved may be
of different types (political, regulatory, etc.) in an international business. However, HR-related risk may be
in the form of lack of suitable HR practices meeting local requirements, social-cultural risk in the form of
non-acceptance of parent country nationals as employees, etc.

6. More External Influences:

A maxim of managing a business is- farther away a business goes, more influences it has to face. This is true
for international HRM too. As compared to domestic HRM, international HRM activities are influenced by a
variety of external factors. HR managers are required to deal with a new set of socio-cultural milieu, political
and legal system, etc.

Not only they have to change their mind set to work in this new set but they have to train the employees to
adjust with the new set. In fact, effectiveness of HR depends to a very great extent on the degree of such an
adjustment.

 Challenges in International Labour Market

1. Staff shortages

Businesses worldwide are still grappling with the global staff shortage with millions of vacancies left unfilled
despite high unemployment levels. Although reasons for the shortage vary between geographies, many cite the
changing expectations of would-be employees following the pandemic, along with country-specific policy
changes.

2. Failed expatriate assignments

According to a recent survey by advisory firm Willis Towers Watson, 31% of multinationals plan to send staff on
international assignments in 2022, meaning international HR teams will have their work cut out recruiting,
onboarding, and supporting new overseas employees.
While this investment offers huge benefits for businesses looking to take advantage of the global economy, it also
comes with significant risk as expatriate failure rates remain high. Allianz Global has reported on research by
INSEAD that indicates failure rates span 10% to 50%, with expats sent to emerging economies experiencing
higher rates of failure than those relocating to developed countries.
3. Localisation vs. standardisation of HR practices

One of the biggest issues facing multinational corporations is the tension between standardisation versus
localisation. And for HR professionals, this means trying to strike a balance between promoting global values
while recognising the need to adapt certain HR practices and policies to local markets, cultures, and institutions.

4. Ethical challenges in multinational corporations

Linked to the localisation versus standardisation dilemma, establishing and maintaining one overarching ethical
code across various jurisdictions remains one of the key challenges of International HRM.
We know organisations with strong ethical track records are viewed as desirable places to work (and increasingly
so by millennial and Gen-Z generations). Promoting a global code of conduct and set of values is therefore an
important strategy to attract and retain talent.

5. The evolution of digital HRM

Digital HR, including digital platforms, tools, and cloud-based technologies, is increasingly used to automate daily
processes and acquire data to create predictive models for better strategic decision-making.
While there are numerous benefits to the rise of digital HR, including increased productivity and efficiency, it can
also pose several challenges to HR line managers who must engage with these systems, as well as the workers.

 Linking HR strategies to international expansion strategies

The business of HR is an increasingly interesting and often complex environment. The level of time and
resources allocated to the HR function within an organization varies dramatically. This article explores a few
different aspects around the connection between a company’s Human Resource Management policies and the
organizations business strategy.

An increasing number of studies demonstrate the importance of linking business strategy with deployment of
human resources within an organization. A company’s pool of human resources and talent are arguably some
of its most valuable assets. A company which links it HRM with its strategic business plan stands to gain a
strong competitive advantage in the marketplace.

Strategic decision making is about considering both the internal and external factors and the context around
them. The internal factors could be the company’s mission statement, the organizational structure and whether
it is a large multi divisional organization or a smaller single product company. This would usually impact on
how the selection, appraisal and development of employees is structured. The external factors could be the
political, cultural and economic force which may impact the business.

The human dimension of the Company’s strategy refers to the key subject of employees and employment
relations. This resource represents the potential value of workers for achieving goals and gaining
organizational success. Management of this includes decision making, implementation and taking actions
aimed at employee attitudes and behaviours to achieve the organizational goals.

Strategic HRM can be very effective in organizations when implemented correctly. It benefits the organization
in several ways. It can be a very useful tool to help identify and analyse both internal and external threats as
well as opportunities. It also helps to provide a clear business vision and strategy. It is an important influence
in the approach to the recruitment and selection process to get the right people with the right skillset into the
most effective positions to maximise their potential within the organization.

A key component of linking business strategy to HRM is a culture of clear communication and trust within an
organization. When employees are encouraged to become involved in various aspects of the business strategy
it develops higher levels of trust and respectability between employees and the management team. This trust is
built on the knowledge sharing which allows employees to also share in the vision and goals of the
organisation. The right strategy therefore helps to retain talent and develop highly competent employees.

The Michigan model is often referred to in discussion around strategic HRM. The model is based on strategic
control, organisation structure and people management processes. While it focuses on reward systems for
 motivating employees it also concentrates on managing human resources to achieve strategic goals. Therefore,
having the right structure in place ensures issues are addressed in a timely and effective manner. Most
importantly it gets ‘buy in’ from employees as they feel involved in contributing to the overall strategic plan of
the organisation. This can result in higher levels of productivity from a high performing workforce.
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 Multiculturalism:
MUIticulturalism means that æeple from many cultures (and frequently many countries) interact regularly.
Global firms are repositories of multiculturalism. Not that domestic firms have only mono CUItures. Domestic
firms too may have employees with different nationalities. Infosys, for example, has foreigners representing nine
per cent of the total employee strength. Similarly, four per cent of WIPRO's employees are foreigners. Domestic
firms having multiculturalism may be by choice, but it is by design with multinational enterprises.
A multinational corporation needs to maintain a unified culture that knits all the subsidiaries together Each
subsidiary tends to become a stand alone unit if a unified culture does not exist.
Uniliver, for example, has decentralised its operations worldwide. To knit together the decentralised
orgamsation, Uniliver worked to build a common organisational culture among its managers. For years the
company hired people of different nationalities, but with similar values and interests. The idea was to hire people
who could easily jell with Uniliver's culture. It is said that the company has been so SUccessful at this that
Uniliver executives recognise one another at airports even when they had met only once before Uniliver's senior
management believes that this corps of like-minded people is the reason why its employees work so well, despite
their national and cultural differences.
It is not just corporates which promote multiculturalism. Even nations are active in promoting such a practice.
Canada, for instance, has declared itself as a multicultural society and to make this point explicit, the government
enacted the Multi-culturalism Act of 1988. Multiculturalism has since sunk deep into the roots of the government,
which is reflected in everything from broadcasting to education policy. It has itself become a basic Canadian
value.

 NATURE OF CULTURE:
Culture is understood as the customs, beliefs, norms and values that guide the behaviour of the people in
a society and that are passed on from one eneration to the next. This simple meaning connotes the
following core elements of culture:
 • Culture has normative value. It prescribes do's and dont's which are binding on the members of a
society.
• Culture is a group phenomenon. Culture applies to the members of a society. Society's normative
values are binding on each member and not vice versa.

• Cultural practices are passed on from generation to generation. Women in Indian society wear
kumkum on their foreheads because their parents have told them to do so. The parents did the same
because their parents had done so.
There are dominant cultures, sub-cultures, organisational cultures and occupational cultures (See Fig.

FIGURE ( Levels of Culture)

Dominant culture is pervasive and extends to the whole of a country .For example, certain things are
auspicious and some others are not so and this belief is shared by all Indians.
Subcultures exist within the dominant culture. The cultural practices of Punjabis are different from those
obtaining in Karnataka. Interestingly, subcultures subsume into the dominant culture to present a unified
culture, typifying "unity in diversity"
Within the dominant culture is the organisational culture. Every organisation will have its own distinct
culture. The culture Of Tatas, for example, is different from that of Infosys while that of Infosys is not the
same as that of WIPRO.
Each profession carries its own culture and it cuts across dominant cultures. An accountant, for example,
speaks the same language whether he or she is an Indian or an American. So is the case with a medical
practioner or an attorney.
CULTURAL DIMENSIONS
We propose to discuss three cultural models:

Globe Project Team, Hofstede's model and Trompenaar's 7d cultural model.

An understanding of these models equips international managers with the basic tools necessary to analyse
the cultures in which they do business. The three approaches also provide useful theoretical concepts to
help understand the nuances of different cultures better.

Globe Project
The GLOBE (Global Leadership and Organisational Behaviour Effectiveness) project team
comprises 170 researchers who have collected data over seven years on cultural values an practices
and leadership attributes from 17,000 managers in 62 countries, covering as many as 825
organisations spread across the globe. The research team identified nine cultural dimensions that
distinguish one society from another and have important managerial implications:

assertiveness, future orientation, performance orientation, human orientation, gender differentiation,

uncertainty avoidance, power distance, collectivism/societal, and ingroup collectivism.
Assertiveness
This aspect is defined as the degree to which in individuals in organisations or societies are expected
to be tough, confrontational and competitive versus modest and tender.

Future Orientation
This dimension refers to the level of importance a society attaches to future-oriented behaviours such
as planning and investing in the future and delaying immediate gratification.

Performance Orientation
Performance orientation measures the importance of performance and excellence in society and refers
to Whether people are encouraged to strive for continued improvement and excellence.

Human orientation
Human orientation is understood as the degree to which individuals in organisations or societies
encourage and reward people for being altruistic, generous, caring and kind to others.

Gender Differentiation
This is understood as the extent to which an organisation or society resorts to role differentiation and gender
discrimination.
 Hofstede's Cultural Dimensions

In a discussion on multicultures, reference should be made to the pioneering work done by the
Dutch scientist, Geert Hofstede. he identified four cultural dimensions around which countries
have been clustered, with people in each group exhibiting Identical behaviours. The four
dimensions are:
power distance, uncertainty avoidance, Individualism and masculinity.
Hofstede's study preceded the Research Project. But we have. taken the GLOBE study first because of
its comprehensiveness and widespread research base. If Hofstede focussed on the employees Of only
IBM, the GLOBE study covered as many as 825 organisations, picked up from among financial, food
processing and telecommunication Industries. However , the usefulness of Hofstede's study cannot be
undermined.

Power Distance

Power distance is the extent to which less powerful members of institutions and organisations accept
that power is distributed unequally. Countries in which people blindly obey the orders of superiors
have high power distance.
High power distance countries have norms, values and beliefs such as—
  inequality is fundamentally good,
 every one has a place;
 most people should be dependent on a leader,
 the powerful are entitled to privileges, and
 the powerful should not hide their power.

The dimension of power distance can be measured in a number of ways. For example, the basic
motivational assumption in high power distance countries is that people dislike work and try to avoid it.
Consequently, managers believe that they must adopt Theory X leadership style, that is, they must be
authoritarian, must force workers to perform and must supervise their subordinates closely.

Uncertainty Avoidance

Uncertainty avoidance is the extent to which people feel threatened by ambiguous situations, and have created
beliefs and institutions that try to avoid these. There are countries with high uncertainty avoidance and there
are those characterised by low uncertainty avoidance. Denmark and of low uncertainty avoidance cultures.
Germany, Japan, and Spain typify high uncertainty avoidance societies.
Countries with citizens who do not like uncertainty tend to have a high need for security and a strong
belief in experts and their knowledge. Countries with low uncertainty avoidance have people who are more
willing to accept that risks are associated with the unknown, and that life must go on in spite of this.
Specifically, high uncertainty avoidance countries are characterised by norms, values, and beliefs which
accept that :
 Conflict should be avoided,
Deviant people and ideas should not be tolerated,
Laws are very important and should be followed,
Experts and authorities are usually correct, and
Consensus is important
Low uncertainty avoidance societies tend to represent the antonym of the above characteristics.

Trompenaars' Framework
Trompenaars, an European researcher, conducted an extensive research with 15,000 managers from 28
countries, representing 47 national cultures. He describes cultural differences using seven dimensions (the
theory is therefore called 7d cultural dimensions model):
(i) universalism versus particularism, (ii) individualism versus collectivism, (iii) specific versus diffuse, (iv)
neutral versus affective, (v) achievement versus ascription, (vi) past versus present, and (vii) internal versus
external control (See Fig. 2.5). The first five dimensions deal with how people relate to each other. The two
final dimensions deal with how a culture manages time and how it deals with nature. Each dimension is a
continuum or a range of cultural differences.

Universalism versus Particularism

In cultures with universalistic orientation, people believe in abstract principle; such as the rules of law,
religion or cultural principles. The basic premise is that these principles can be applied everywhere without
modification. UK, USA and Czech represent universalistic cultures. Particularism, on the other hand is the
belief that circumstances dictate how ideas and practices should be applied. South Korea, Mexico and Nigeria
follow particularistic cultures. In universalistic cultures, the focus is more on formal rules than on
relationships; business contracts are adhered to very closely and people believe that a 'deal is a deal'. In a
particularistic culture, legal contracts often are modified and the way, deals are executed also changes
depending on the situations. In particularistic cultures too, there exist rules, but people expect exceptions to be
made for friends, family relations and others. Managerial practices under universalistic cultures include
formalisation of business practices, treating all cases similarly and announcing any change publicly.
Particularism entails such managerial practices as use of informal networks and introducing changes in a
subtle way.

Individualism versus Collectivism

This dimension is almost identical to Hofstede's value dimension. In individualistic societies the focus is on
"I" or "me" and the orientation is on one's own growth. In collectivist societies, the focus is on groups,
including family, organisation and community. Responsibility, achievements and rewards are group- based. In
individualistic societies, people are trained from childhood to be independent, and each person assumes
individual responsibility for his/her success or failure.

Neutral versus Affective

In this dimension, Trompenaars focusses on the appropriateness of expressing emotions in different

cultures. In neutral cultures, the tendency of the people is to control their emotions so that it will not
interfere with their Judgement. In contrast, affective cultures encourage the expression of emotions.
Expressions of anger, laughter, gesturing and a range of emotional outbursts are considered normal an
acceptable. But in neutral societies, emotions are considered to be messy interferences in achieving
objectives. Achieving objectives is more important than the emotional nature of the interaction.
Specific versus Diffuse

This cultural dimension focusses on how a culture emphasises on notions of privacy and access to privacy.
In specific cultures, individuals have large public spaces and relatively small private spaces. While the
public space is open, the private one is guarded carefully and shared with only close friends and associates.
A diffuse culture does not allow any distinction between public and private spaces. In diffuse cultures, an
executive's office and home are not divided as clearly as they are in specific cultures, and work
relationships often extend into personal relationships.

Achievement versus Ascription

This dimension describes the methods used to acquire status. In an achievement culture, an individual is
accorded status based on how well he she performs his/her functions. Status depends on achievement. An
ascription culture is one in which status is attributed based on who or what a person is, his age, gender or
social connections. Achievement is not the criterion to accord status.
MANAGING ACROSS CULTURES
Managing multiculturalism or cross-cultural management is of considerable significance as it offers
the following potential benefits:
• increasing creativity and innovation
• demonstrating more sensitivity in dealing with foreign customers
• hiring the best talent from anywhere
• demonstrating a global perspective
• creating a 'super organisational culture', using the best of all cultures
• greater flexibility within the organisation both to adapt to a wider range of environments and to change
within these environments

• to evolve universally acceptable HR policies and practices.

The international manager needs cross-cultural competence to manage multiculturalism. Cross-cultural

competence includes skills, awareness and knowledge.
In order to be culturally competent, an individual needs to:
l. possesses a strong personal identity;
2. have knowledge of and felicity with the beliefs and values of the culture;
3. display sensitivity to the effective processes of the culture;
4. communicate clearly in the language of the given cultural group;
5. perform specially sanctioned behaviour;
6. maintain active social relations within the cultural group;
7. negotiate the Institutional structures of that culture.

We propose to discuss six dimensions as part of cross-cultural management: motivation, leadership,

communication, teams, HR practices, and work values
Managing across cultures strategies: Managing across cultures can be a challenging task.
Here are some strategies that can help:

1. Develop cultural intelligence: Learn about the culture you will be working with, their
values, beliefs, and customs. This will help you understand their perspectives and ways of
doing things.
2. Communicate clearly: When working with people from different cultures, it's important to
communicate clearly and avoid using idioms or jargon that may not be familiar to them.
Be patient and take the time to listen carefully to what others are saying.
3. Build relationships: Building relationships is important in any business setting, but it's
especially important when working across cultures. Take the time to get to know your
colleagues and build trust.
4. Be open-minded: Be open to new ideas and ways of doing things. Recognize that there
are different ways to approach problems and challenges.
5. Adapt your management style: Different cultures have different expectations when it
comes to management styles. Be flexible and willing to adapt your style to better suit the
needs of your team.
 6. Seek feedback: Ask for feedback from your team members on how you can improve your
management style and communication. Be open to constructive criticism and use it to
make improvements.
7. Celebrate diversity: Embrace diversity and recognize the strengths that come from having
a team with different backgrounds and perspectives. Create opportunities to celebrate
cultural events and traditions.

By following these strategies, you can successfully manage across cultures and build a strong
and productive team.
Cross cultural differences: Cross-cultural differences refer to the variations in values, beliefs, attitudes, and
customs between people from different cultures. These differences can have a significant impact on how people interact
with each other, communicate, and work together. Here are some examples of cross-cultural differences:

1. Communication styles: Different cultures have different communication styles. For example, in some cultures,
people may be more indirect in their communication, while in others, they may be more direct and
straightforward.
2. Social norms: Social norms vary between cultures. For example, in some cultures, it may be considered
impolite to interrupt someone while they are speaking, while in others, interrupting may be seen as a sign of
active engagement in the conversation.
3. Time orientation: Cultures differ in their attitudes towards time. For some, being punctual is very important,
while for others, being flexible with time is more important.
 4. Work values: Cultures also have different work values. For example, in some cultures, a strong work ethic and
dedication to one's job is highly valued, while in others, a more relaxed attitude towards work is considered
acceptable.
5. Individualism vs. collectivism: Different cultures have different levels of emphasis on individualism vs.
collectivism. In individualistic cultures, people tend to focus more on their individual goals and achievements,
while in collectivistic cultures, people tend to prioritize the needs and goals of the group.

It's important to recognize these differences and adapt your communication and management style to better suit the
needs of your team members from different cultures. By doing so, you can create a more inclusive and productive work
environment.

Cross cultural similarities: While cross-cultural differences exist, there are also many similarities that can be
found across different cultures. Here are some examples:

1. Importance of family: The family unit is valued in many cultures around the world. Family members are often
relied upon for support and help in times of need.
2. Respect for elders: In many cultures, there is a strong emphasis on respecting and honoring elders. Older people
are often viewed as wise and are given a great deal of respect.
3. Celebration of milestones: Birthdays, weddings, and other major life events are often celebrated across cultures.
These celebrations may vary in their specific customs and traditions, but the overall importance of marking
significant milestones is a common theme.
4. Value of education: Education is often highly valued across different cultures. Many cultures place a strong
emphasis on the importance of learning and gaining knowledge.
5. Appreciation for art and beauty: Many cultures appreciate art and beauty in various forms, such as music, visual
arts, and literature. The expression of creativity is often valued and celebrated.
 6. Importance of hospitality: Offering hospitality and showing kindness to others is often highly valued across
cultures. Guests are often treated with respect and generosity.

Recognizing these similarities can help to build understanding and appreciation for different cultures. It can also
facilitate cross-cultural communication and collaboration.

UNIT 2
International environment: political, legal and technological; Recruitment and Selection - Staffing
policies, approaches, Selection criteria, recent trends in international staffing, Performance
management of international employees, issues in managing performance in the international context.

 Environment –

Environment is the aggregate of all conditions, events and influences that surround and affect business.

 International Environment –
International business refers to the globalisation of trade and trading of goods and services in international markets.
An Environment is described as an ecosystem in which an international company conducts its daily operations.
The International Business Environment is a complex network of economic, political, legal, and cultural forces that
shape how organizations conduct international business. It consists of external and internal factors that impact a
company’s success or failure in different markets.

 CHARACTERISTICS OF INTERNATIONAL ENVIRONMENT

 Large scale Operations:

To cope with the global competition in international environment, all the operations are conducted on a very huge scale
and generally using special purpose machinery and high skill labour. Production and marketing activities are conducted
on a large scale. After satisfying the domestic market, the international market is tapped.

 Immobility of Factors:

The degree of immobility of factors like labour and capital is generally greater between countries than within a country
due to the immigration laws, citizenship, qualifications, etc. These restrictions slows down the international mobility of
labour. Similarly, the international capital flows are prohibited or severely limited by different governments having
different fiscal policies.
  Heterogeneous Markets:

A cross-border business is very different from one that involves a single country. The international markets lack
homogeneity on account of differences in climate, language, preferences, habit, customs, weights and measures, etc.
The behaviour of international buyers in each case would, therefore, be different. International trade takes place
between differently cohered groups. The socio-economic environment differs greatly among different nations.

 Dominated by developed countries and MNCs:

International business environment is dominated by developed countries and their multinational corporations (MNCs).
Multinational Corporations (MNCs) encompass a number of countries. Their sales, profits, and the flow of production
is reliant on several countries at once. Such companies from large economies like the USA, UK, Japan, China,
Germany, India, etc. dominate international trade. This is because they have large financial and other resources. They
also have the best technology and research and development facilities. They have highly skilled employees and
managers. These high skill people are given very high salaries and other benefits. Therefore, they produce good quality
goods and services at low prices. This helps MNCs and developed countries to capture and dominate the global market.

 Beneficial to Participating Countries:

International environment gives benefits to all participating countries. Developing countries get foreign capital and
technology from developed countries. They get rapid industrial development. They get more employment
opportunities. Developing countries get economic development from the developing countries. Hence, developing
countries open up their economies through liberal economic policies.

 Special Role of Science and Technology:

International business gives a lot of importance to science and technology. Developed countries use high technologies.
International business helps them to transfer such top high-end technologies to the developing countries. Such
technology transfers help people from developing countries to learn from dynamic industry experts in a diverse
learning environment. It helps them to receive groundbreaking training and unlock the door to entrepreneurship.

 Sensitive Nature:

The international environment is very sensitive in nature. Any changes in the economic policies, technology, political
environment, etc. has a huge impact on it. Similarly the culture and beliefs of that country also play very important role
in international business. Therefore, international business must conduct marketing research to find out and study these
changes and sensitivity of the society also. They must adjust their business activities and adapt accordingly to survive
changes.

 TYPES OF INTERNATIONAL ENVIRONMENT

An International Business Environment (IBE) involves different aspects like political risks, cultural differences,
exchange risks, and legal and taxation issues. Thus, it is mandatory for the people at the managerial levels to work on
factors comprising the international business environment as it is crucial for a country’s economy.

The various types or aspects of the international business environment are provided below.

1. Political Environment in International Environment

The political environment means the political risk, the government’s relationship with a business, and the type of

government in the country. Conducting business internationally implies dealing with different kinds of governments,

levels of risk and relationships.

There are different types of political systems, such as one-party states, multi-party democracies, dictatorships (military

and non-military) and constitutional monarchies. Thus, an organisation needs to take into account the following aspects
while planning a business plan for the overseas location:

 Political system of the business

 Approach of the government towards business, i.e. facilitating or restrictive

 Incentives and facilities offered by the government

 Legal restrictions for licensing requirements and reservations to a specific sector like the private, public or small-

scale sector

 Restrictions on importing capital goods, technical know-how and raw materials

 Restrictions on exporting services and products

 Restrictions on distribution and pricing of goods

 Required procedural formalities in setting the business

2. Legal Environment in International Environment

The term ‘legal environment’ of a business refers to the strategies adopted by any government to help, manage or
constrain the business ecosystem of the country.
Legal environment of a business includes –

 various legislations enacted, amended or repealed by the government,

 administrative orders proclaimed by government authorities,
 decisions issued by various commissions and agencies of the central, state or local government as well as
judicial activities, and
 The legal environment in India includes various laws regulating business activities like Companies Act
2013, Consumer Protection Act, 2019 and many other such legislations, policies relating to licensing and
approvals, foreign trade etc.
In every country, the government frames its legal systems according to its definite purposes and priorities in order to
regulate the business ecosystem of the country. The government may also limit the business activities by regulations.
These factors, in turn, create the legal environment of a business.

3. Technological Environment in International Environment

The technological environment includes factors related to the machines and materials used in manufacturing services

and goods. As organizations do not have control over the external environment, their success depends on how they will
adapt to the external environment. A significant aspect of the international business environment is the level and

acceptance of technological innovation in countries.

The last decade of the twentieth century saw significant advances in technology, and it is also continuing in the twenty-

first century. Technology often gives organizations a competitive advantage. Hence, organizations compete to access

the latest technology, and international organizations transfer technology to be globally competitive.

Due to the internet, it is easier even for a small business plan to have a global presence, which grows its exposure,

market, and potential customer base. For political, economic and cultural reasons, some countries are more accepting of

technological innovations, while others are less accepting. In analysing the technological environment, the

organizations should consider the following aspects:

 Level of technological developments in the country as a whole and specific business sector

 Pace of technological changes and obsolescence

 Sources of technology
 Facilities and restrictions for technology transfer

 Time taken for the absorption of technology

 Recruitment and selection: Recruitment and selection are two important HR processes that involve
identifying, attracting, and hiring the best candidates for a job opening.

Recruitment is the process of identifying potential candidates for a job opening and encouraging them to apply. This
process can involve various activities, such as advertising job openings, searching for candidates on social media or job
boards, and reaching out to candidates who may be a good fit for the job.

Selection, on the other hand, is the process of evaluating candidates and choosing the best candidate for the job. This
process typically involves screening resumes and applications, conducting interviews and assessments, checking
references and background, and making a job offer.

Recruitment and selection in international human resource management (IHRM):

Recruitment and selection are critical components of international human resource management (IHRM). In the context
of IHRM, recruitment and selection involve identifying, attracting, and selecting candidates who have the necessary
skills, knowledge, and cultural competence to work in different countries and regions.

Here are some key considerations in recruitment and selection in the context of IHRM:
 1. Cultural differences: Cultural differences can impact the recruitment and selection process. For example,
different cultures may have different expectations around the hiring process or different ways of evaluating
qualifications and experience. IHRM professionals must be sensitive to these differences and adjust their
recruitment and selection approach accordingly.

2. Language barriers: Language barriers can make it challenging to evaluate candidates effectively. IHRM
professionals may need to rely on translators or language proficiency tests to ensure that candidates have the
necessary language skills to succeed in the role.

3. Legal requirements: Different countries have different laws and regulations related to recruitment and
selection. IHRM professionals must be familiar with these requirements to ensure that they comply with all
relevant laws and regulations.

4. Global mobility: International assignments may require candidates to relocate to a different country or region.
IHRM professionals must consider candidates' willingness and ability to relocate, as well as any necessary visas
or work permits.

5. Talent shortages: Some regions or countries may have talent shortages in certain industries or roles. IHRM
professionals must develop effective recruitment strategies to attract the best candidates and compete with other
employers in the same market.

Overall, effective recruitment and selection in the context of IHRM requires a deep understanding of cultural
differences, legal requirements, and talent markets in different countries and regions. It also requires the ability to
evaluate candidates effectively and fairly, taking into account factors such as language proficiency, global mobility, and
cultural competence.
  The recruitment and selection process in international human resource management
(IHRM)
The recruitment and selection process in international human resource management (IHRM) is similar to that of
domestic HRM, but with added complexities due to the global context. In general, the recruitment and selection process
in IHRM involves the following steps:

1. Identify the need for global talent: The first step in the recruitment and selection process in IHRM is to
identify the need for global talent. This may involve assessing the organization's strategic goals and identifying
the skills and knowledge required to achieve those goals.

2. Develop a global recruitment strategy: Organizations need to develop a recruitment strategy that aligns with
their global business goals and objectives. This includes identifying recruitment sources and methods that are
effective in different regions and countries.

3. Advertise the job: Advertise the job opening through various channels such as job portals, social media, and
other recruitment platforms.

4. Screen resumes: Screen the resumes of the applicants who have applied for the job and shortlist them based on
their qualifications, skills, and experience.

5. Conduct interviews: Conduct interviews with the shortlisted candidates to evaluate their suitability for the role.
This may involve phone or video interviews, as well as in-person interviews for candidates who are located in
the same country or region.

6. Check references: Check the references of the candidates to verify their qualifications and experience.
 7. Assess cultural fit: Assess the cultural fit of the candidates to ensure that they have the necessary cultural
competence to work in different countries and regions.

8. Make a job offer: Make a job offer to the candidate who is most suitable for the role.

9. Complete pre-employment formalities: Complete all pre-employment formalities such as background checks,
medical tests, and visa processing.

10. Onboard the employee: Onboard the employee and provide the necessary training and support to ensure a
smooth transition into the organization.

Overall, the recruitment and selection process in IHRM requires a strategic approach, attention to cultural and legal
considerations, and the use of technology and effective communication to attract and select the best candidates. It also
involves additional steps such as assessing cultural fit and completing pre-employment formalities to ensure that
candidates are able to work effectively in different countries and regions.

 Staffing policies in international human resource management (IHRM):

Staffing policies in international human resource management (IHRM) refer to the strategies and practices that
organizations use to manage their human resources across different countries and regions.
These policies include:

1. Ethnocentric staffing: In ethnocentric staffing, an organization's headquarters or parent country is the primary
source of talent for senior management positions. This staffing policy assumes that the best candidates are those
from the home country, and is often used in the early stages of international expansion.
 2. Polycentric staffing: In polycentric staffing, host country nationals are recruited and employed to manage
subsidiaries in different countries. This staffing policy is based on the belief that local managers have a better
understanding of local markets and cultures, and is often used in mature international markets.

3. Geocentric staffing: In geocentric staffing, the organization seeks to employ the best candidates from around
the world for management positions, regardless of their country of origin. This staffing policy is based on the
belief that the best candidates are those with the necessary skills, experience, and cultural competence, and is
often used in global organizations.

4. Regiocentric staffing: In regiocentric staffing, the organization recruits and employs candidates from specific
regions for management positions. This staffing policy is based on the belief that regional managers have a
better understanding of regional markets and cultures, and is often used in regional organizations.

Other staffing policies in IHRM include:

5. Transnational staffing: In transnational staffing, the organization seeks to create a global mindset among its
employees and managers, and to create a diverse workforce that is capable of operating effectively in different
cultures and markets.

6. Hybrid staffing: In hybrid staffing, the organization uses a combination of different staffing policies,
depending on the needs of the business and the availability of talent in different countries and regions.

Overall, staffing policies in IHRM require a careful balance of cultural and strategic considerations. Organizations need
to consider factors such as the availability of talent, cultural fit, and the organization's global business goals and
objectives when developing their staffing policies.
  Staffing approaches in international human resource management (IHRM):
Staffing approaches in international human resource management (IHRM) refer to the different ways in which
organizations can manage their workforce across different countries and regions.
The most common staffing approaches in IHRM include:

1. Home country approach: In this approach, the organization relies on employees from the home country to
fill key positions in international subsidiaries. This approach is often used by organizations in the early stages of
international expansion when local talent is not yet available or when the organization wants to maintain control
over its subsidiaries.

 Advantages:
1) Cultural Consistency: The home country approach ensures cultural consistency and allows the organization to
maintain its corporate culture in international subsidiaries.

2) Control: The approach provides greater control to the parent company over international subsidiaries.

3) Transfer of Knowledge and Expertise: The approach allows for the transfer of knowledge and expertise from
the home country to international subsidiaries, which can be critical in the early stages of international
expansion.

4) Cost Savings: The approach can be cost-effective as employees from the home country may be willing to work
for lower salaries and benefits in international locations.

 Disadvantages:
1) Cultural Differences: The approach may not be effective in adapting to local cultures and customs, which can
impact the success of international subsidiaries.
2) Lack of Local Knowledge: The approach may lead to a lack of local knowledge, which can make it difficult to
understand local markets and customers.

3) Resistance to Change: Local employees may resist the approach, which can lead to employee turnover and low
morale.

4) Legal Issues: The approach may result in legal issues, as local laws and regulations may require the hiring of
local employees.

2. Host country approach: In this approach, the organization relies on local employees from the host country
to fill key positions in international subsidiaries. This approach is often used when the organization wants to
adapt to local cultures and customs, and when local talent is available and can contribute to the organization's
success.

 Advantages:
1) Cultural Adaptability: The host country approach allows organizations to adapt to local cultures and customs,
which can improve the success of international subsidiaries.

2) Local Knowledge: The approach allows organizations to leverage local knowledge, which can be critical in
understanding local markets and customers.

3) Legal Compliance: The approach complies with local laws and regulations, which can reduce legal issues.

4) Improved Morale: The approach can lead to improved morale among local employees, as they feel valued and
recognized.
 Disadvantages:
1) Cultural Inconsistency: The approach may result in cultural inconsistency across international subsidiaries,
which can impact the corporate culture.

2) Limited Transfer of Knowledge: The approach may result in limited transfer of knowledge and expertise from
the home country to international subsidiaries.

3) Control: The approach provides less control to the parent company over international subsidiaries.

4) Cost: The approach may be more expensive as local employees may require higher salaries and benefits.

3. Third country approach: In this approach, the organization hires employees from a third country to fill
key positions in international subsidiaries. This approach is often used when local talent is not available or when
the organization wants to bring in employees with specific skills and expertise.

 Advantages:
1) Cultural Diversity: The third country approach allows organizations to bring in employees from different
cultures, which can improve cultural diversity in international subsidiaries.

2) Transfer of Knowledge and Expertise: The approach allows for the transfer of knowledge and expertise from
a different country, which can be critical in gaining new insights and approaches.

3) Reduced Cost: The approach can be cost-effective as employees from third countries may be willing to work
for lower salaries and benefits in international locations.
4) Improved Morale: The approach can lead to improved morale among employees, as they feel valued and
recognized.

 Disadvantages:
1) Cultural Inconsistency: The approach may result in cultural inconsistency across international subsidiaries,
which can impact the corporate culture.

2) Language Barriers: The approach may result in language barriers between employees, which can impact
communication and collaboration.

3) Legal Issues: The approach may result in legal issues, as local laws and regulations may require the hiring of
local employees.

4) Lack of Local Knowledge: The approach may lead to a lack of local knowledge, which can make it difficult to
understand local markets and customers.

4. Global approach: In this approach, the organization seeks to develop a global talent pool by recruiting and
training employees from different countries and regions. This approach is often used by multinational
organizations that want to develop a diverse and globally-minded workforce.

 Advantages:
1) Consistency: The global approach ensures consistency in HR policies and practices across international
subsidiaries, which can help in maintaining a cohesive corporate culture.

2) Transfer of Knowledge and Expertise: The approach allows for the transfer of knowledge and expertise from
the home country to international subsidiaries, which can be critical in gaining new insights and approaches.
3) Economies of Scale: The approach allows for economies of scale, as the same HR policies and practices can be
implemented across different locations.

4) Control: The approach provides more control to the parent company over international subsidiaries, which can
help in maintaining quality standards.

 Disadvantages:
1) Cultural Insensitivity: The approach may result in cultural insensitivity, as HR policies and practices may not
be adapted to local cultures and customs.

2) Limited Adaptability: The approach may not allow for enough adaptability to local market conditions, which
can affect the success of international subsidiaries.

3) Recruitment Difficulties: The approach may face recruitment difficulties, as local employees may prefer to
work for organizations that have a strong local presence.

4) Communication Challenges: The approach may face communication challenges due to language and cultural
barriers between employees.

5. Transnational approach: In this approach, the organization seeks to create a borderless workforce by
recruiting and training employees from different countries and regions and developing a culture that transcends
national boundaries. This approach is often used by global organizations that want to create a unified and
integrated workforce.

 Advantages:
1) Flexibility: The transnational approach allows for flexibility in HR policies and practices, which can be adapted
to local market conditions and cultural differences.

2) Cultural Sensitivity: The approach promotes cultural sensitivity, as HR policies and practices are tailored to
local cultures and customs.

3) Transfer of Knowledge and Expertise: The approach allows for the transfer of knowledge and expertise
across international subsidiaries, which can help in gaining new insights and approaches.

4) Reduced Recruitment Difficulties: The approach may reduce recruitment difficulties, as employees from
different countries may be willing to work in international locations.

 Disadvantages:
1) Complex and Difficult to Implement: The approach is complex and difficult to implement, as it requires
coordination and communication across different subsidiaries.

2) Higher Costs: The approach may result in higher costs, as HR policies and practices may need to be adapted to
different locations.

3) Potential Conflict: The approach may result in potential conflict between the parent company and international
subsidiaries over HR policies and practices.

4) Limited Control: The approach provides less control to the parent company over international subsidiaries,
which can make it difficult to maintain quality standards.
  Selection criteria in international human resource management (IHRM):
Selection criteria in international human resource management (IHRM) are the specific factors or attributes that an
organization considers when selecting candidates for international assignments. These criteria may vary depending on
the type of position, location, and organizational needs.
Some common selection criteria in IHRM include:

1. Language proficiency: Proficiency in the local language is often an important selection criterion for
international assignments, as it can help in effective communication and integration into the local culture.

2. Cross-cultural competence: Cross-cultural competence is the ability to work effectively in different cultures
and is a critical selection criterion for international assignments.

3. Technical expertise: Technical expertise in a specific field is often a key selection criterion for international
assignments, particularly in industries such as engineering or technology.

4. International experience: International experience, particularly in the relevant region or country, can be a
valuable selection criterion for international assignments, as it demonstrates an individual's ability to work in a
foreign environment.

5. Adaptability and flexibility: Adaptability and flexibility are important selection criteria for international
assignments, as they demonstrate an individual's ability to adjust to new situations and environments.

6. Family situation: An individual's family situation, such as their marital status or number of dependents, can
also be a selection criterion for international assignments, as it can affect their willingness to relocate.
 7. Health and wellness: An individual's health and wellness may also be a selection criterion for international
assignments, particularly if the location poses health risks or requires a certain level of physical fitness.

Overall, selection criteria in IHRM are designed to identify individuals who have the necessary skills, knowledge, and
attributes to succeed in international assignments and contribute to the organization's global success.

 Recent trends in international staffing:

International staffing refers to the process of recruiting, selecting, and deploying employees for work in foreign
countries. With the growing globalization of businesses and the increasing mobility of labour, there are several recent
trends in international staffing that are worth noting:

1. Cross-border remote work: With the advancement of technology, it has become easier for employees to work
remotely from anywhere in the world. As a result, more companies are opting for cross-border remote work
arrangements, where employees work from their home country but collaborate with colleagues located in other
countries.

2. Global mobility programs: Many multinational companies are investing in global mobility programs to
facilitate the movement of employees across different countries for work. These programs help to develop the
skills and experiences of employees, which can be beneficial for both the employees and the company.

3. Emphasis on diversity and inclusion: International staffing is becoming more diverse and inclusive, with
companies focusing on hiring employees from different cultural backgrounds, genders, and nationalities. This
not only helps to create a more diverse workforce but also improves cross-cultural communication and
collaboration.
 4. Increased use of local talent: Companies are increasingly recruiting and hiring local talent in foreign countries
rather than sending expatriates. This approach helps companies to better understand local markets, cultures, and
customs, which can be beneficial for their business operations.

5. Growing importance of global leadership development: As companies expand their operations globally, the
demand for effective global leaders is increasing. As a result, there is a growing emphasis on developing global
leadership skills, including cross-cultural communication, adaptability, and strategic thinking.

These trends are likely to continue in the coming years as businesses continue to expand their global footprint and seek
to remain competitive in the global marketplace.

Performance management of international employees: Managing the performance of international employees can
present unique challenges due to differences in cultural norms, language barriers, and varying work expectations. Here
are some strategies for effectively managing the performance of international employees:

1. Set clear expectations: Clearly communicate job expectations, performance standards, and company policies to
international employees. Make sure they understand what is expected of them and how their performance will
be evaluated.
2. Provide regular feedback: Regular feedback is important for all employees, but it can be especially helpful for
international employees who may not be as familiar with cultural norms or the company's work environment.
Provide feedback frequently and be specific about what needs improvement.
3. Use cross-cultural communication skills: Be aware of potential cultural differences that may impact
communication with international employees. Use cross-cultural communication skills, such as active listening
and open-ended questions, to help ensure clear communication.
 4. Offer training and development: Offer training and development opportunities to help international
employees develop the skills needed to succeed in their roles. This can include language training, cultural
orientation, or specialized skills training.
5. Use technology to facilitate communication: Use technology, such as video conferencing and chat platforms,
to facilitate communication between international employees and managers. This can help overcome language
barriers and time zone differences.
6. Be sensitive to cultural differences: Be sensitive to cultural differences that may impact the performance of
international employees. For example, some cultures may place more emphasis on team performance, while
others may prioritize individual performance.
7. Recognize and reward good performance: Recognize and reward good performance among international
employees. This can include bonuses, promotions, or other forms of recognition that are appropriate for the
employee's culture.

By following these strategies, you can effectively manage the performance of international employees and help them
succeed in their roles.

Issues in managing performance in the international context.: Managing performance in the

international context can present a number of challenges and issues. Here are some of the most common ones:

1. Cultural differences: Different cultures have different expectations about work, communication, and
performance, which can create misunderstandings and conflicts. For example, in some cultures, being direct and
assertive is valued, while in others, it may be seen as disrespectful.
2. Language barriers: Language differences can make it difficult to communicate effectively, especially when it
comes to feedback and coaching. Misunderstandings can occur, which can lead to performance problems and
frustration.
 3. Legal and regulatory differences: Different countries have different laws and regulations around employment,
which can impact performance management practices. For example, some countries may have different laws
around termination or privacy, which can impact how performance is managed.
4. Time zone differences: International teams may be located in different time zones, which can make it difficult
to communicate in real-time and can impact collaboration and teamwork.
5. Technology issues: International teams may use different technology platforms or have different levels of
access to technology, which can impact performance management practices.
6. Performance measurement: Measuring performance can be challenging in the international context, as
performance goals and metrics may need to be adapted to local contexts and cultures.
7. Resistance to change: International employees may be resistant to changes in performance management
practices, especially if they are used to different approaches in their home country or culture.
8. Bias and stereotypes: Bias and stereotypes can impact performance management in the international context,
as managers may make assumptions about employees based on their cultural background or nationality.

By being aware of these issues and taking steps to address them, managers can effectively manage performance in the
international context and help their employees succeed.

UNIT 3

HRM in cross border mergers and acquisitions. Training in international management: training
strategies, expatriate training, types of training programmes and emerging trends in training for
 competitive advantage. International Compensation: objectives, theories, components and
compensation package.

HRM in cross border mergers and acquisitions.:

In today’s increasingly complicated and globalized economic climate, Mergers and Acquisitions
(M&A) have replaced organic development as the primary means of expansion for many
companies. The term “cross-border merger” refers to a partnership between an Indian and a
foreign firm. Only mergers with Indian companies were permitted in India. After the Companies
Act, 2013 was passed, outbound mergers were authorized with some limits. The Companies
Amendment Act, 2017, was pivotal for the legal basis for international mergers. For international
mergers, the Reserve Bank of India released proposed rules in 2017. In response, the Foreign
Exchange Management (Cross-Border Merger) Regulations, 2018, were drafted. New restrictions
have eased business in India, helping companies diversify, reform, and consolidate their
businesses. It opened new international markets for Indian businesses. While the reasons for most
mergers and acquisition failures are primarily financial, a large number of deals also fail due to
poor human resources management, including issues such as incompatible work cultures, different
management styles, lack of motivation, attrition, want of communication, trust issues within teams
and uncertainty of long-term goals.

Importance of human resource management in mergers & acquisitions:

The term human resource management (HRM) is used to describe an organization’s systematic
efforts to shape the actions of its employees. Managing human resources is a crucial strategic
challenge for all firms, but especially so for those engaged in cross-border Mergers and
Acquisitions, since employee behaviour has a significant impact on profitability, customer
satisfaction, and other essential metrics of organizational success. Human resource management
encompasses a wide range of actions any company takes, no matter how big or small. Both
strategic plans and routine procedures for supervising employees are part of human resource
management. All organizations need to have policies in place that lay out the ground rules for
managing employees.

Developing and implementing comprehensive compensation strategies helps to retain talented

managers. To ensure the success of the new synergy, it is essential that the leadership team first
identifies the most valuable personnel and then designs a remuneration package that will not only
keep them happy at work but also substantially motivate them. The acquiring firm’s human
resources policies and reward system tend to have the most significant impact on winning over the
target company’s workforce and facilitating a smooth transition.

Effective communication is one of the most important ways for a combined firm to get the most
out of its people. To successfully implement an M&A, it is necessary to convince employees that
they would personally profit from the company’s continued growth. One of the safest and most
productive strategies is using numerous communication channels simultaneously.

Role of human resource management in cross-border M&A:

The outcome of Mergers and Acquisitions can be affected by human resource management at any
time during the procedure. Human resource management’s primary concern in the lead-up to a
merger is usually to ensure that all applicable laws and regulations are being followed, particularly
those pertaining to equal employment opportunity and collective bargaining agreements. Human
resources managers can get to work on the merger preparations immediately after a deal is
announced by doing things like handling retention agreements and evaluating pay scale
disparities. Human resources managers have been shown to have the most significant impact on
Mergers and Acquisitions during the integration phase, which is when M&A processes and policies
are put into effect. Human resources managers are crucial after an acquisition, especially if there
are cultural differences. In many cases, the type of integration varies from country to country,
which will impact business practices and policies.

Strategies of human resource management that fit mergers and acquisition:

Geographic roll up
Mergers and Acquisitions (M&A) occur when businesses look to grow into new geographic markets
while keeping their operations at the regional level. When larger corporations buy out smaller
ones, they often leave the local management team in place so that business can continue as usual.
These Mergers and Acquisitions (M&As) are like overcapacity M&As in that they both entail the
consolidation of enterprises; however, they differ considerably in that they often take place early
in an industry’s life cycle. Strategically, a roll-up relates to the creation of business gains and aims
to generate economies of scale and scope, while an overcapacity merger or acquisition aims to
minimize capacity and duplication. Even though people are less easily replaceable in geographic
roll-up M&As, the processes and values of the merging entities are likely to be more different than
in an overcapacity M&A. But because the company buying the other company is usually bigger
than the company being bought, conflicts over status are less likely to happen than in an
overcapacity M&A.

Industry convergence
Through Mergers and Acquisitions, new industries can be formed out of those which are already in
existence but are seeing their borders erode. This form of a merger is uncommon and poorly
understood at the present time, making it challenging to assess. When corporations join to save
money on research and development (R&D), the acquired company is sometimes given more
leeway than usual, and the focus is on creating value through integration rather than achieving
perfect symmetry.

Market extension
Cross-border Mergers and Acquisitions (M&A) allow companies to broaden their operations beyond
their home country. Such Mergers and Acquisitions take place when the acquiring and acquired
companies are functionally related in production and/or distribution but sell products that do not
compete directly with one another or when a corporation desires to diversify geographically, like
when two companies create the same product but sell it in different areas. Businesses engage in
this form of M&A to fulfill their long-term strategic objectives, and one common motivation is to
get the scale and efficiencies needed to compete on a global scale in less developed markets.
Success in a merger or acquisition aimed at expanding a company’s product line or market
presence is correlated with the size and M&A experience of the two companies involved.
Due diligence
The due diligence stage begins once a target company has been selected, and company executives
begin communicating with one another to share financial and legal data that will help them weigh
the pros and cons of a proposed merger. The present moment is ideal for learning about the
culture of the prospective company and comparing it with that of the current business. Since the
two companies had similar views on corporate principles and ethics, merging them was a breeze.
Therefore, cultural due diligence should play a pivotal role in the M&A process during the due
diligence phase. It is critical to ensure that cultural assessment is not forgotten throughout an
M&A process by including experts in human resources or organizational development on the M&A
team. M&A teams should conduct interviews or use a cultural assessment tool to evaluate the
culture of firms they are contemplating acquiring proactively. Critical insights into potential
synergies and areas of conflict that can arise throughout the cultural integration endeavour can be
gained by understanding how the firms’ executives and employees set plans and goals, engage
with the marketplace, and reward behaviours. It is crucial currently to do proper homework on the
cross-border management skills of both companies. Cross-border acquisitions often change from
absorption to reverse acquisition in the acquired firm’s native country. Those in charge at
corporate headquarters may misunderstand the significance of on-the-ground operations in
establishing the company’s credibility and reputation in the new market because they are focused
on abstract concepts like ownership or the implementation of standard operating procedures
across all locations.
Substitute for research & development
When companies with cutting-edge R&D or technological know-how are purchased rather than
developed in-house, typically, larger, more seasoned companies are the ones doing the acquiring
in a reverse merger. In place of research and development (R&D), M&As must keep valuable
human resources and accumulated knowledge. Because entrepreneurial people often feel limited
by the bureaucratic structure of the acquiring organization, adjusting the newly formed entity’s
processes and values is a complex undertaking. The success of this type of international merger or
acquisition hinges on the degree of integration achieved by the acquired firm and the adaptability
of the acquiring company. Integration issues arise only in certain fields.

Potential target
The standard practice for a company contemplating many M&A targets is to collect a wide variety
of relevant data and information on each of them. The opportunity to rapidly expand product lines
or move into new geographies, or even eliminate a competitive threat, are all examples of the kind
of data that could be useful in determining whether or not an M&A target will be helpful in
achieving a given growth goal. As data is gathered on the Merger or Acquisition’s prospective
target, it’s also vital to think about how much effort will be required to integrate the two
organizations’ operations. The firm’s international business experience is another element in cross-
border M&As. M&A activity is more likely and more successful if the target company has prior
experience operating in a foreign environment through partnerships, joint ventures, or
acquisitions. Similarly, the acquired firm’s M&A and national cultural experience are important
considerations.

Challenges of human resource management in cross border mergers

& acquisition
In the past, human resource management has often been given a seat at the table quite late in
the M&A process. Many of the human resource management co-workers believe that human
resource management should be involved in planning and strategy at an earlier stage. Human
resource management engaged late in domestic M&A agreements might result in unrealized
synergies and deal value degradation. The consequences of ignoring human resource management
in a cross-border merger or acquisition are substantially more severe. The human resources
management team is ideally suited to overcome the logistical, cultural, and legal hurdles that
prohibit businesses from realizing their full potential and closing deals for maximum value.

Legal and regulatory issues

Human resource management needs to collaborate closely with the interdisciplinary team of legal
and accounting professionals to successfully handle the additional regulatory and legal difficulties
that arise during cross-border M&A negotiations.
Tax issues
Foreign subsidiaries of merging corporations may receive substantial tax benefits from
transactions structured as mergers. This benefit may be lost if HR and business teams engage in
informal integration initiatives also known as deemed integration, such as merging reporting lines
or moving operations to a single location.

Labour and employment regulations

In some countries, when a merger or acquisition is about to be finalized, it is customary to first
meet with labour unions, works councils, or other employee representatives. These entities may
be able to obstruct a contract. To successfully address these labour relations issues, human
resource management managers must devote sufficient time and resources. Terminating an
employee in most countries requires substantial notice and severance, and simple function
duplication due to acquisition is typically not sufficient cause. A company’s human resources
department also must be aware of any restrictions on modifying employment terms.

Immigrations consideration
Work permits and visas may be required for some personnel at the acquired company; it is
essential to ensure a smooth transition of all relevant paperwork. Even in an asset sale, a change
in work authorization may be necessary before a seller’s employee can begin working for a buyer.
The purchaser is responsible for completing all paperwork for themselves and their personnel, who
will be working on-site at the overseas subsidiary. While doing their due diligence, human resource
management should discover these immigration concerns and see to it that they are resolved.

Availability of information
The amount of information available to the public is substantially smaller, and the accuracy of
financial reports is much less certain. As a result, human resource management managers will not
only have significantly less data at their disposal during due diligence but will also have to exercise
heightened caution when handling sensitive employee information.

Effect of national and corporate culture

Differences in national culture can influence anything from work hours to leadership expectations,
which human resource management must take into account when negotiating international deals.

Human resource management functions and duties may shift in different cultural contexts. Human
resource management staff members can be both order takers and strategic advisors. Cross-
border counterparts may not have as much involvement as you. When performing due diligence
and integrating new systems, you may face pushback from subordinates if you are the leader of
human resource management. Foreign labour markets are also typically more strictly regulated,
something that human resource management directors discover in addition to different reaction
times and attitudes toward vacation and work hours. When conducting due diligence, these rules
must be carefully considered. Even the questions you choose to ask during due diligence can be
affected by factors like the company’s employment policies, plans, and programs. The human
capital issue is further complicated by the fact that deal structures can vary widely from one
nation to the next. Employees working away from the headquarters may feel powerless, which can
have adverse effects on transaction value, productivity, and quality of work delivered on time, as
well as cooperation and a willingness to work to resolve employee difficulties. Human resource
management executives may face resistance to central supervision from a foreign country despite
the urgent need for international cooperation. It is essential to separate genuinely controllable
problems from the ones that can be dealt with on a national or even international scale.

Training in international management: International training and management development are always closely
associated in the management literature. Gregerson et al. (1998) proposed four strategies for developing global
managers: international travel; the formation of diversified teams; international assignments and training.
These four strategies relate to expatriation management, particularly integrating international training and management
development. Training aims to improve current work skills and behavior, whereas development aims to increase
abilities in relation to some future position or job, usually a managerial one (Dowling et al., 1999, p. 155). A truly
global manager needs a set of context-specific abilities, such as industry-specific knowledge, and a core of certain
characteristics, such as cultural sensitivity, ability to handle responsibility, ability to
Develop subordinates and ability to exhibit and demonstrate (Baumgarten, 1992). These characteristics and skills are
considered as important international competencies and all can be developed through effective international training
and management development. International training refers to training for international assignments.
According to Bartlett and Ghoshal (2000), global firms can enhance their inter-unit linkages by creating a pool of
global managers from anywhere in the world. Management development in MNEs is the “glue” bonding together
otherwise loose and separate entities.
Indirect costs may be considerable and un-quantified, such as damaging relations with the host country government
and other local organizations and customers, as well as loss of market share, damage to corporate reputation and lost
business opportunities. The literature indicates that expatriate failure is a persistent and recurring problem and failure
rates remain high.
International management development can also be expected to play a central role in MNEs because of its importance
in developing a cross-national corporate culture and integrating international operations.

Training Strategies:
There is absolutely no substitute for on-the-job training. With that being said, though, it’s also important to remember that not
all on-the-job training works. To be effective, the process of training employees while they’re actively performing their jobs must
be part of your overall learning management strategy. It’s not enough to just show an employee a new task and walk away. For
training on-the-job that really sticks, use these strategies:

 Mentoring

Organizations that value the collective knowledge base of their workforce have a solid mentoring program. Mentors
don’t necessarily need to be an employee’s direct supervisor. Often, a more experienced employee who is on a
strong career progression track makes a great mentor. The strategy of mentoring focuses on growing an employee’s
overall skill set, fostering a positive attitude, and setting the employee up for success in general, not with just a specific
task.
 Coaching

While mentoring takes more of a big picture approach, coaching is much more specific. The role of a coach is to ensure
employees have the information, skills, and support they need to complete a task or set of tasks. Effective coaches
observe employees as they’re working and give continual feedback to help them improve. Coaches keep their eyes
on overall goals, watching how individuals affect the success of the entire team and making adjustments as they go.

 Job Shadowing

There are elements of both mentoring and coaching for employees who are put in the role of having another employee
shadow them. In addition to teaching valuable job skills, this strategy can promote the culture of the company and
foster teamwork. One word of caution, though: pick the right employees to be shadowed. If you’re not sure, shadow a
person yourself before you have new employees follow along.
 Career Development

You may not think of promotions as a form of training, but they are. When you have a strong career progression
program, you’re encouraging your employees to pursue on-the-job opportunities and excel as mentors and trainers
themselves.
 Solid Follow-up

Training is never a set-it-and-forget-it proposition. Any effective training requires assessment and follow-up. As a
manager of learning, trainers have a responsibility to track on-the-job training efforts and record them as part of an
employee’s overall training plan. A good online learning management system allows trainers to integrate on-the-job-
training with their online courses that include manager sign-offs and tracking.

 Expatriate Training :
Expatriate is a term used to describe an employee who is temporarily or permanently assigned to work in a foreign
country. Expatriates may be assigned to work in a foreign country by their company, or they may be sent to work in a
foreign country by their government. Expatriates may be assigned to work in a foreign country for a variety of reasons,
including to gain experience working in a foreign country, to learn a new language, or to gain knowledge about a
foreign culture.
There are many benefits of expatriate assignments for both the employee and the employer. For the employee,
expatriate assignments can offer opportunities for growth and development, as well as new and exciting experiences.
They can also provide a chance to learn about a new culture and to improve foreign language skills. Additionally,
expatriate assignments can offer a higher salary and a variety of benefits, such as tax breaks and allowances.
1. Establish a clear purpose for the program. Before creating an expatriate program, it is important to establish a
clear purpose for it. What are the company's goals for the program? What do they hope to achieve by sending
employees abroad?

2. Define the target audience. Who will the program be aimed at? Is it for senior executives only, or will it also
include lower-level employees? Defining the target audience will help to determine the specific criteria that
employees must meet in order to be eligible for the program.
 3. Establish eligibility criteria. In order to be eligible for an expatriate program, employees must meet certain
criteria. Establishing clear eligibility criteria will help to ensure that only the most qualified employees are
chosen for the program.

4. Design a comprehensive selection process. The selection process for an expatriate program should be
comprehensive and rigorous. It should include a review of the candidates' skills and experience, as well as their
personal and professional goals.

5. Create a comprehensive training program. Once employees have been selected for an expatriate program, they
need to be properly trained for their new role. The training program should include information on the
company's culture and business practices, as well as on the specific country where the employee will be
working.

 Types of Training programmers in international management:

Everything you need to know about types of training in HRM. Training is the systematic process of enhancing the job
related skills, attitude and knowledge of personnel.
Training enables employees to develop and rise within the organisation, increase their market value. Basically, the top
management is responsible for training of employees in the organisation.
The commitment of top management is an essential qualification of training programmes because it involves in framing
training policy.
Training of the employees is possible if they believe that the resulting modification in the behaviour is in their own
interest and they can perform their job in a better way after attending the particular training programme because
learning is a self-activity and employee development is self-development.

International management training programs are designed to prepare individuals to manage

and lead organizations across cultural, linguistic, and geographic boundaries. There are various
types of training programs available for international management, some of which include:

1. Cross-Cultural Training: This type of training focuses on developing cultural awareness and
sensitivity to help managers understand the norms and values of different cultures. It may
include language training, understanding cultural differences in communication, and
developing skills in negotiation and conflict resolution across cultures.
2. International Business and Management Programs: These programs provide an in-depth
understanding of the complexities of international business operations and the skills
needed to manage them effectively. They cover topics such as global business strategies,
cross-border finance, and legal considerations in international management.
3. Leadership Development Programs: These programs focus on developing leadership skills
that are necessary for managing global teams and leading international organizations.
They may include training in team building, coaching, mentoring, and effective
communication across cultures.
 4. Expatriate Training: This training is designed for employees who are relocating to a foreign
country for an extended period. It includes practical information about living and working
in a foreign country, such as cultural norms, legal requirements, and healthcare systems.
5. Language Training: Learning the language of the host country can help managers to better
understand the culture and communicate effectively with local employees, customers, and
partners. Language training programs can be customized to the specific needs of the
organization and the individual.
6. Virtual Training: With the increasing use of technology, virtual training programs have
become popular for international management training. These programs use video
conferencing and other online tools to deliver training and connect individuals from
different parts of the world.

Overall, the type of training program selected for international management will depend on the
needs of the organization and the individuals involved. It is important to select a training
program that is relevant, effective, and tailored to the specific needs of the organization and its
employees.

 Emerging trends in training for competitive advantage:

Training is a crucial element for organizations to stay competitive in today's dynamic business
environment. Here are some emerging trends in training that can help organizations gain a
competitive advantage:

1. Technology-enabled Training: The use of technology in training has increased significantly

in recent years. E-learning platforms, virtual reality, and augmented reality are becoming
more prevalent in training programs, making training more engaging and accessible for
learners. Technology-enabled training can be delivered at any time and from anywhere,
which saves time and cost for organizations.
2. Microlearning: Microlearning refers to delivering small, bite-sized pieces of information to
learners. This trend has emerged due to the shorter attention spans of today's learners.
Microlearning allows learners to access training content quickly and conveniently, which
can lead to better retention and application of the learning.
3. Personalized Training: Personalized training programs are tailored to the specific needs of
individual learners. Personalization is achieved by leveraging data and analytics to create
customized learning paths for each learner. Personalized training can increase
engagement, motivation, and retention of learning.
4. Gamification: Gamification involves applying game design principles to non-game
contexts such as training. This trend has gained popularity due to its ability to engage
 learners and make training more fun. Gamification can improve learner motivation,
retention, and application of learning.
5. Diversity, Equity, and Inclusion (DEI) Training: DEI training is becoming increasingly
important for organizations to create inclusive work environments. DEI training can help
employees develop cultural competency, recognize unconscious bias, and build skills to
work effectively with diverse colleagues and customers.
6. Agile Training: Agile training refers to a training methodology that is aligned with agile
project management principles. Agile training focuses on delivering learning in short
cycles, with a focus on continuous improvement. This approach enables organizations to
respond quickly to changing business needs.

By embracing these emerging trends in training, organizations can gain a competitive advantage
by developing a highly skilled and engaged workforce. It is essential for organizations to stay
up-to-date with these trends to ensure their training programs remain effective and relevant.
 International Compensation:
International compensation refers to the pay and benefits provided to employees working in an
international or global context. The compensation of employees working overseas or in different
countries can be more complex than that of domestic employees due to differences in tax laws,
currency exchange rates, and cost of living. Here are some key elements of international
compensation:
1. Base Salary: The base salary is the fixed amount paid to an employee for their work. The
base salary for international employees can vary significantly depending on factors such as
the employee's level of experience, qualifications, and the location of the job.
2. Foreign Service Premium: A foreign service premium is an additional payment made to
employees working overseas. The premium is designed to compensate employees for the
additional expenses associated with living and working in a foreign country, such as the
cost of housing, transportation, and language training.
3. Cost of Living Allowance (COLA): A COLA is an additional payment made to employees to
compensate for the higher cost of living in certain locations. COLA payments are typically
based on the cost of living index for the host country.
4. Benefits: Benefits such as health insurance, retirement plans, and paid time off are an
important part of international compensation. The type and level of benefits can vary
depending on the location of the employee and the employer's policies.
5. Exchange Rate Fluctuations: Exchange rate fluctuations can have a significant impact on
international compensation. Employers may use currency hedging strategies to mitigate
the impact of currency fluctuations on employee compensation.
6. Taxation: Tax laws can vary significantly between countries, which can affect the amount of
compensation employees receive. Employers may provide tax equalization or tax
protection to ensure that employees are not disadvantaged by differences in tax laws.
International compensation is an important factor in attracting and retaining top talent in global
organizations. It requires careful consideration of various factors such as the location of the
employee, the level of experience, and the impact of tax laws and currency exchange rates.

 objectives of International compensation:

The objectives of international compensation are to attract, retain, and motivate employees
working in an international or global context. Here are the main objectives of international
compensation:

1. Attracting Talent: International compensation aims to attract talented employees to work

in foreign locations where the company operates. This is particularly important for
companies with a global presence, as they need to compete with other employers to
attract top talent.
2. Retaining Talent: Retaining talented employees is also a key objective of international
compensation. Employees may be more likely to stay with a company if they feel that they
are being fairly compensated for their work and that their compensation package reflects
the challenges of working in an international context.
3. Motivating Employees: International compensation can be used as a tool to motivate
employees to perform at a high level. This can be achieved by linking compensation to
 performance or by providing additional benefits such as housing allowances or education
allowances for employees' dependents.
4. Managing Costs: International compensation can also be used to manage costs associated
with international assignments. Companies may provide different compensation packages
for employees working in different locations, taking into account the cost of living,
taxation, and other factors.
5. Ensuring Equity: International compensation aims to ensure that employees working in
different locations are being paid equitably for their work. This requires companies to
consider the cost of living, taxation, and other factors when determining compensation
packages.
6. Complying with Regulations: Finally, international compensation aims to ensure that
companies comply with local regulations and tax laws. This requires careful consideration
of local laws and regulations, as well as the use of strategies such as tax equalization or tax
protection to ensure that employees are not disadvantaged by differences in tax laws.

By achieving these objectives, companies can effectively manage their global workforce, attract
and retain top talent, and ensure that employees are being fairly compensated for their work.
 Theories of International compensation:
There are several theories of international compensation that help to explain how and why
companies compensate employees working in different countries. Here are three key theories:
1. Balance Sheet Approach: The balance sheet approach to international compensation is
based on the idea that employees should be compensated in a way that allows them to
maintain the same standard of living in the host country as they would have in their home
country. This approach takes into account differences in the cost of living, taxation, and
other factors. The balance sheet approach typically involves providing a base salary, a cost
of living adjustment, and other allowances such as housing and education allowances.
2. Localization Approach: The localization approach to international compensation is based
on the idea that employees should be compensated in the same way as local employees in
the host country. This approach takes into account local market conditions, including the
cost of living, prevailing wage rates, and other factors. The localization approach typically
involves providing a base salary and benefits that are comparable to those provided to
local employees.
3. Global Value Chain Approach: The global value chain approach to international
compensation is based on the idea that employees should be compensated based on the
value they create for the company. This approach takes into account the global value chain
of the company, including the location of production and the market for the company's
products or services. The global value chain approach typically involves providing a base
salary and benefits that are linked to the performance of the company as a whole.
Each of these theories has its strengths and weaknesses, and the approach that a company takes
to international compensation will depend on a variety of factors, including the location of the
employee, the industry, and the company's overall strategy. By understanding these theories,
companies can develop effective international compensation strategies that align with their
business objectives and help to attract and retain top talent.

 components of International compensation:

The components of international compensation can vary depending on the company's specific
needs and the location of the employee, but typically include the following:

1. Base Salary: This is the fixed compensation that an employee receives, typically paid on an
annual or monthly basis. The base salary is usually determined by the employee's job level,
experience, and other factors, and may be adjusted for cost of living differences.
2. Benefits: Benefits typically include health insurance, retirement plans, life insurance,
disability insurance, and other employee benefits. These benefits are usually provided by
the employer and can vary depending on the location of the employee.
3. Allowances: Allowances are payments that are made to employees to cover additional
costs associated with living and working in a foreign country. These can include housing
allowances, cost of living allowances, and education allowances for dependents.
 4. Incentives: Incentives are payments that are made to employees based on their
performance or the performance of the company. These can include bonuses, profit
sharing, and stock options.
5. Taxes: Taxes can be a complex issue for international employees, as they may be subject to
different tax laws and regulations in different countries. Companies may provide tax
equalization or tax protection to ensure that employees are not disadvantaged by
differences in tax laws.
6. Relocation Expenses: Companies may also provide assistance with relocation expenses,
including the cost of shipping household goods, temporary housing, and transportation
costs.

By providing a comprehensive international compensation package that includes these

components, companies can effectively manage their global workforce and attract and retain
top talent. However, it's important to note that the components of international compensation
can vary widely depending on the location of the employee, the industry, and the company's
overall strategy.
 compensation package in International compensation:
An international compensation package typically includes a combination of base salary, benefits, allowances, and
incentives that are designed to attract, retain, and motivate employees working in a foreign country. Here are the
components of an international compensation package in more detail:
 1. Base Salary: The base salary is the fixed compensation that an employee receives, usually paid on an annual or
monthly basis. The base salary is typically determined by the employee's job level, experience, and other
factors, and may be adjusted for cost of living differences.
2. Benefits: Benefits typically include health insurance, retirement plans, life insurance, disability insurance, and
other employee benefits. These benefits are usually provided by the employer and can vary depending on the
location of the employee.
3. Allowances: Allowances are payments that are made to employees to cover additional costs associated with
living and working in a foreign country. These can include housing allowances, cost of living allowances, and
education allowances for dependents.
4. Incentives: Incentives are payments that are made to employees based on their performance or the performance
of the company. These can include bonuses, profit sharing, and stock options.
5. Taxes: Taxes can be a complex issue for international employees, as they may be subject to different tax laws
and regulations in different countries. Companies may provide tax equalization or tax protection to ensure that
employees are not disadvantaged by differences in tax laws.
6. Relocation Expenses: Companies may also provide assistance with relocation expenses, including the cost of
shipping household goods, temporary housing, and transportation costs.
7. Repatriation Benefits: Repatriation benefits are provided to employees who are returning to their home country
after working abroad. These can include assistance with finding a job, temporary housing, and other benefits to
ease the transition.

By providing a comprehensive international compensation package that includes these components, companies can
effectively manage their global workforce and attract and retain top talent. However, it's important to note that the
components of an international compensation package can vary depending on the location of the employee, the
industry, and the company's overall strategy.
 UNIT 4
International industrial relations - nature, approaches and strategic issues before employers,
employees and government. Cross cultural communication and negotiation: communication process,
barriers, effectiveness and managing cross cultural negotiation. Repatriation: challenges, benefits,
process and managing repatriation.

 International industry relation

The concept of industrial relations means the relationship between the employees and management in the day to day working
of an industry. The Indian IR scenario has been rapidly changing with the opening up of the liberalized economy and the
subsequent inflow of Multinational Corporations (MNCs).

This has brought a shift in the attitude towards the relationship. This entry of MNCs has shifted the focus from a labour economy
to a human economy .An extensive linkage between economy, politics and history has always characterized Indian IR. The
changes that are taking place are primarily due to endogenous forces embedded within India’s political economy.

There has been a major effect on the macro economic aspect on the structure of the labour market (productivity, employment
and wages), also on the structure of IR (number of unions, collective bargaining, labour legislation, industrial conflict and state
intervention).These transformations have brought in changes on the growth pattern of the economy.

The concept of industrial relations means the relationship between the employees and management in the day to day working
of an industry. The Indian IR scenario has been rapidly changing with the opening up of the liberalized economy and the
subsequent inflow of Multinational Corporations (MNCs).
This has brought a shift in the attitude towards the relationship. This entry of MNCs has shifted the focus from a labour economy
to a human economy .An extensive linkage between economy, politics and history has always characterized Indian IR. The
changes that are taking place are primarily due to endogenous forces embedded within India’s political economy.

There has been a major effect on the macro economic aspect on the structure of the labour market (productivity, employment
and wages), also on the structure of IR (number of unions, collective bargaining, labour legislation, industrial conflict and state
intervention).These transformations have brought in changes on the growth pattern of the economy.

 Industrial Relations Definition

Industrial relations deal with either relationship between the state and employers’ and workers organizations or the relations
between the occupational organizations themselves. “International labor organization

Industrial Relations refers to the relationship between management and employees, or employees and their organization that
arise out of employment. “ Dale Yoder

 Nature of Industrial Relations

 Industrial relations are concerned with the relationship between management and workers.

 Industrial relations safeguards the interest of employees.

 Industrial relations are concerned with the system, rules, and procedures used by unions and employees to
determine the reward for effort and other conditions of employment, safeguard the interests of the employees
and their employer and regulate how employers treat their employees.
  Industrial relations maintain a balance with employee expectations, employer associations, trade unions, and
other social and economic institutions of societies.

 Industrial relations help in resolving disputes, conflicts, and controversies between labour and management.

 Approaches to Industrial Relations:

1. Systems Approach
2. Unitary Approach
3. Pluralist Approach
4. Marxist Approach
5. Sociological Approach
6. Gandhian Approach
7. Psychological Approach.
8. Human Relations Approach

 Systems Approach

John Dunlop gave the systems theory of industrial relations in the year 1958. He believed that every human being belongs to a
continuous but independent social system culture which is responsible for framing his or her actions, behaviour and role.

Actors: By actors here we mean that the individuals or parties involved in the process of developing sound industrial relations.
This variable is denoted by ‘A’.

Contexts: The contexts refer to the setup in which the actors perform the given tasks. It includes the industry markets (M),
technologies (T) and the power distribution in the organization and labour unions(P).
Ideology: The similar ideas, mentality or beliefs shared by the actors helps to blend the system. It can be expressed by the initial
(I)

 Unitary Approach

As the name suggests, the unitary approach can be seen as a method of bringing together the teamwork, common objective,
individual strategy and mutual efforts of the individuals.This theory believes that the conflicts are non-permanent
malformations, which are a result of improper management in the organization.
To create a productive, effective and harmonious work environment;

to develops a trustworthy, open, fair and transparent work culture;

to create a cordial work environment;

 Pluralist Approach

The pluralist theory also called the ‘Oxford Approach’, was proposed by Flanders in the year 1970. This approach explained
that the management and the trade unions are the different and robust sub-groups which unanimously form an
organization.

The organization should appoint personnel experts and industrial relations specialists to act as mediators between the
management and trade unions. They need to look into the matters of staffing, provide consultation to the managers and the
unions, and negotiate with both the parties in case of conflicts.

The organization should ensure that the trade unions get recognized and the union leaders or representatives can perform their
duties freely.

In the case of industrial disputes, the organization can avail the services of the external agent for settlement of such issues.
  Marxist Approach

Lenin came up with the concept of a Marxist approach in the year 1978, where he emphasized the social perspective of the
organization. This theory perceived that the industrial relations depend upon the relationship between the workers (i.e.,
employees or labour) and the owners (i.e., employer or capital). There exists a class conflict between both the groups to
exercise a higher control or influence over each other .Industrial relations are a significant and never-ending source of conflicts
under capitalism which cannot be avoided. However, cases of open disputes are quite unusual.

Understanding the conceptions of capitalized society, capital accumulation process and the pertaining social relations, give a
better overview of the industrial relations. The Marxist theory assumed that the survival of the employees without any work is
more crucial than the survival of the employer without the labours.

 Sociological Approach

The industries comprise of different human beings who need to communicate with the individuals of other organizations.

Due to the difference in their attitude, skills, perception, personality, interests, likes and dislikes, needs, they are usually
involved in one or the other conflict. Even the social mobility and other aspects including transfer, default, group dynamics,
stress, norms, regulations and status of the workers influence their output and the industrial relations.

 Gandhian Approach

The Gandhian approach to industrial relations was proposed by the father of our nation, Mahatma Gandhi or Mohandas
Karamchand Gandhi, who was also a well-known labour leader. Gandhi Ji perceived that every organization is a joint venture,
and the labour should be treated as associates or co-partners with the shareholders. Moreover, the workers should have proper
knowledge of all the business transactions as it is their right. He focussed on increasing the production and believed that
the gains should be shared with the employees because of whom it has been possible. He also emphasized that the industrial
disputes and conflicts between the parties should be resolved healthily through interactions, arbitration and bilateral
negotiations.

 Psychological Approach

The psychologists perceived the problem of the industrial relations as a result of the varying perception and mindset of the key
participants, i.e., the employees and the management.

The ‘thematic application test’ was conducted by Mason Harie to understand the behaviour, mindset and perception of the
two significant workgroups, i.e., executive and the union leaders, in a particular situation.

The general belief of a management representative is entirely different from that of a labour representative.

Both the management and labour do not consider each other to be trustworthy.

Even each of these groups considers that the other one lacks emotional and interpersonal attributes.

 Human Relations Approach

The person behind the concept of the human relations approach is Keith Davis. The organization and the society comprise of
human beings who vary in various aspects as their behaviour, emotions, attitude, mindset and personality. But, they have come
together to achieve common organizational goals and objectives.
The concept of human relations approach underlines the need for making the individuals familiar with the work situations of the
organization and uniting the efforts of the workers. The purpose is to meet the social, psychological and economic
objectives, by enhancing the overall productivity.
 to ensure cooperation by promoting the mutual interest of the organization;
 to enhance the productivity of the individuals;
 to satisfy the psychological, social and economic needs of the employees.

 strategic issues before employers In International industrial relations:

International industrial relations involve the management of the relationship between employers
and employees across different countries. There are several strategic issues that employers need
to consider when managing international industrial relations, including:

1. Cultural differences: Employers need to be aware of the cultural differences that may exist
between countries and the impact these differences may have on the employment
relationship. Different cultures may have different expectations regarding work hours,
communication styles, and decision-making processes, among other things.
 2. Legal requirements: Employers need to be familiar with the different legal requirements
that apply in each country where they have employees. This may include employment
laws, tax laws, and immigration laws.
3. Labor market conditions: Employers need to understand the labor market conditions in
each country where they operate. This includes factors such as the availability of skilled
labor, wage rates, and labor laws.
4. Collective bargaining: Employers need to be familiar with the collective bargaining
practices in each country where they operate. This includes understanding the role of
trade unions, the process of negotiating collective agreements, and the legal requirements
that apply.
5. Employee communication: Employers need to establish effective communication channels
with their employees across different countries. This includes providing information about
company policies, employment conditions, and other relevant matters.
6. Social responsibility: Employers have a responsibility to operate in a socially responsible
manner and to respect the human rights of their employees. This includes promoting
diversity and inclusion, ensuring safe and healthy working conditions, and protecting
employees from discrimination and harassment.

By addressing these strategic issues, employers can effectively manage international industrial
relations and maintain positive relationships with their employees across different countries.
  strategic issues before employees In International industrial relations:
International industrial relations involve the relationship between employers and employees
across different countries. Employees also face several strategic issues when it comes to
international industrial relations. Here are some of the key issues:

1. Employment Conditions: Employees need to understand the employment conditions that

apply to their job in the country where they are working. This includes their rights and
responsibilities, work hours, wages, benefits, and other terms of employment.
2. Cultural differences: Employees need to be aware of the cultural differences that may exist
between countries and how these differences may impact their work environment. This
includes understanding communication styles, decision-making processes, and work ethics
in different cultures.
3. Language barriers: Employees may encounter language barriers when working in a foreign
country. This can affect their ability to communicate with colleagues, understand job
responsibilities, and access information and resources.
4. Employment laws: Employees need to be familiar with the employment laws in the country
where they are working. This includes knowing their legal rights, understanding the
process for making complaints or seeking redress, and being aware of their obligations as
an employee.
 5. Health and Safety: Employees need to be aware of health and safety regulations in the
country where they are working. They must understand their responsibilities and those of
their employer in maintaining a safe working environment.
6. Social responsibility: Employees may face ethical and social responsibility issues when
working in a foreign country. They must ensure that they comply with local laws and
customs, and that their actions do not negatively impact the local community or
environment.

By addressing these strategic issues, employees can effectively manage their international
industrial relations and ensure they have a positive work experience across different countries.
They can also contribute to building positive relationships between themselves and their
employer, as well as with the local community.

 strategic issues before government In International industrial relations:

International industrial relations involve the relationship between employers and employees
across different countries, and governments play a crucial role in regulating these relationships.
Here are some of the strategic issues that governments need to consider when it comes to
international industrial relations:
1. Employment laws and regulations: Governments need to ensure that there are appropriate
employment laws and regulations in place to protect workers' rights and interests. These
laws may include minimum wage laws, anti-discrimination laws, health and safety
regulations, and labor standards.
2. International trade agreements: Governments need to negotiate and enforce international
trade agreements that promote fair and equitable treatment of workers across different
countries. These agreements may include provisions on labor standards, worker rights, and
environmental protection.
3. Immigration policies: Governments need to establish appropriate immigration policies that
allow for the free movement of workers across borders while also protecting national
interests. This includes policies on work visas, permanent residency, and citizenship.
4. Social policies: Governments need to implement social policies that support workers and
their families. This includes policies on healthcare, education, and social security.
5. International organizations: Governments need to work with international organizations
such as the International Labor Organization (ILO) to promote international labor
standards, fair working conditions, and social justice.
6. Cross-border labor disputes: Governments need to develop mechanisms for addressing
cross-border labor disputes between employers and employees. This includes establishing
procedures for resolving disputes through mediation or arbitration and enforcing
judgments across borders.
By addressing these strategic issues, governments can effectively manage international industrial
relations and promote fair and equitable treatment of workers across different countries. They
can also contribute to building positive relationships between employers and employees and
support the development of a stable and productive global workforce.

 Cross culture communication and negotiation:

Cross-cultural communication theory explores how people of different countries, ethnicities, and cultures can work together to
communicate most effectively. This means overcoming language differences, understanding multicultural nonverbal cues, and
working together to understand how to best convey ideas across cultural divides. Given the prevalence of remote work and the
continued globalization of the economy, cross-cultural communication is likely to become more important than ever in the years
ahead.

Cross-cultural communication allows people to avoid miscommunication and misinterpretation, instead opening up the
possibility of fruitful relationships across previously daunting cultural barriers. This form of multicultural communication enables
the free exchange of information among people of vastly different backgrounds, empowering everyone to profit from the flow of
valuable data.

In cross-cultural negotiations, above and beyond the issues of personal negotiation styles and techniques, one must consider
the impact of cultural difference. This impact will often be tied to communication issues, increasing the possibilities of
misunderstanding. Things that are said, left unsaid, or unclearly said can all create an extra layer of difficulty on top of the
substantive issues to be discussed.

In cross-cultural negotiations, we also often bring a certain amount of baggage to the table based on our personal and group
history, with all of the stereotypes and assumptions that may go along with that history. What makes it particularly challenging is
that cultural difference is a two-way street, potentially making both sides of the table feel awkward. In a potentially adversarial
negotiation, that awkwardness could easily become distrust and fear.

1. Etiquette/Protocol Issues

Simple issues we take for granted can make a difference in cross-cultural settings. How do you greet someone; with what level of
formality? First name jocularity may work wonderfully in Los Angeles, but fall flat in Beijing where formality is more the norm (at
least in the absence of longstanding relations). How should you dress to meet a senior government official in the heat of a
Trinidadian summer? Are there gender issues to consider that may impact on how to behave?

Are gifts appropriate? Required? Have we considered the impact of some of the issues set out below, such as personal space
norms? Are certain topics acceptable, and if so when can they be raised comfortably?

2. Body Language Issues

While in Western (North American and European) cultures, eye contact is often seen as a good thing (a sign of confidence,
honesty, etc.), even in those cultures, it can be misinterpreted. In other cultures, such as some aboriginal cultures and Japanese
culture, eye contact can be seen as rude or inappropriate or uncomfortable.

One must be careful in reading too much or too little into body language signals, as they can be so easy to misinterpret and so
dependant on personal history. As individuals, we are the product of many micro-cultures, all of which play a role in our
interactions with others. A Japanese businessperson, for example, is the product of his family upbringing, his education, his
gender, his religion, his work experience, his geographic history, his age, etc.

3. Language Issues

In certain circumstances, language differences will require interpretative services on one or all sides. It is worth exploring the
degree of language issues early on to prepare accordingly, before substantive discussions begin. Will there be a similar standard
for verbal and written communications?
Recognize that, when translation is required, you will need to at least double the time required to accomplish a goal.. In using
translation, you will want to ensure that you are getting accurate and timely translation, so set clear ground-rules for your
interpreters. Are they to summarize or to repeat word for word? Nothing is more disturbing than to hear a three minute speech
translated with one short sentence.
4. Relationship Issues
In Western culture, there may be varying degrees of comfort with personal relationships in a negotiation. Some people are
inherently relationship builders by nature and want to get to know the other party before getting down to business. Others are
more rational and “cut to the chase” by nature, and may see personal relationships as external to or even dangerous in a
business deal.

Other cultures can approach relationships in different ways. South Americans, for example, are more likely to want to get to
know you as a person before getting down to business. The same would be true of many Asian cultures.

5. Timing Issues
Different cultures deal with time in very different ways. In Western cultures, punctuality is generally seen as a positive, though in
the extreme it can actually be seen as nitpicky behaviour. In Japan and China, a failure to appear on time may be a serious breach
of etiquette. In the Caribbean, the Arctic, South America or the Middle East, however, time is often seen as more fluid. Many a
conflict at a hotel desk in the Bahamas has arisen because, “I am getting to it” in Nassau does not mean the same as it does in
New York City.

6. Trust and Information Issues

North American culture generally values a rational, analytical, straight-forward approach to information, but at the same time,
many North Americans typically keep their cards close to their chests and are reluctant to disclose. The adage of “I’ll show you
mine, if you show me yours first” would not be uncommon. The approach to information often varies with the parties’
personalities and their relationship at the time, as well as other factors. The greater the level of trust, the more likely that fuller
disclosure will occur.

7. Legal Issues
Where foreign law is an issue, advice from counsel adept in the appropriate jurisdiction is a must. The parties will need to
determine what law is to apply to any contract, both procedurally and substantively. Be aware that legislation in one or more
countries may trump what is written in the contract if there is a conflict. As a result, it is imperative to have someone who knows
the legal framework in the relevant jurisdictions. If contracts are drafted in more than one language, what will happen in the
event of a conflict?
.8 Authority Issues
Depending on the culture (and other issues), true authority for decision-making may rest in various hands. In North America, it
would be normal for a representative to attend with authority to make decisions, but there may be practical or strategic reasons
for them to attend with limited or no authority to commit their principal. The boss may be out of country, or unwilling to make a
final decision, for example.

9. Political/Procedural Issues

When dealing with a foreign culture, you need to educate yourself and be aware of the political and practical realities of getting
what you want in the applicable environment. Are there channels that must be followed? If so, what are they, and what is the
best route through them that is compatible with the ethical issues in both cultures. Gift giving (and receiving), for example, may
be the norm in China, but may run afoul of Government of Canada or company regulations on conflict of interest. This is a
political issue. On the practical and procedural side, if giving a gift, what would be appropriate, and how should it be done?

10. Gender Issues

One of the most common and deeply felt value clashes that can occur between cultures is triggered by gender issues. In Saudi
Arabia, for example, most Western companies will use male personnel in negotiations, out of concern that female negotiators
will not be heard and respected in the same way by the Saudi Negotiators. Companies do this despite (at least in some cases)
having their own internal codes of conduct which rule against gender discrimination. Important values and traditions on either
side of the negotiation come head to head with stressful results on both sides.

11. Expectation Issues

It may help to clarify the expectations of the parties early on. What one side sees as the logical goal of a negotiation (getting a
contract) may not be the goal of the other side (getting to know you/making contacts for future business). It never hurts to have
a shared understanding of the goals. Clarify the shared purpose of the negotiation early on.

 Communication Process in Cross-Cultural Communication and negotiation:

Effective communication is a critical component of cross-cultural communication and
negotiation. Cross-cultural communication refers to the exchange of information and ideas
between individuals from different cultural backgrounds. Here are the key components of the
communication process in cross-cultural communication and negotiation:

1. Sender: The sender is the person who initiates the communication process. In cross-
cultural communication, the sender needs to be aware of the cultural differences that may
exist and tailor their message accordingly.
 2. Message: The message is the information or ideas that the sender is trying to convey. In
cross-cultural communication, it is essential to use clear, concise language that is easily
understood by the receiver.
3. Channel: The channel is the medium through which the message is transmitted. In cross-
cultural communication, the choice of channel may vary depending on cultural preferences
and may include face-to-face meetings, telephone calls, email, or video conferencing.
4. Receiver: The receiver is the person who receives the message. In cross-cultural
communication, the receiver needs to be aware of the cultural differences that may exist
and interpret the message accordingly.
5. Feedback: Feedback is the response to the message that the receiver provides to the
sender. In cross-cultural communication, feedback may be different due to cultural
differences in communication styles.
6. Context: The context refers to the situational factors that may influence the
communication process. In cross-cultural communication, the context may include cultural
norms, values, beliefs, and social customs.

Effective cross-cultural communication and negotiation require an understanding of these

components and how they interact in different cultural contexts. It is essential to take the time to
learn about cultural differences and develop strategies to overcome any communication barriers
that may arise. This may include using interpreters, providing training on cultural differences,
and adapting communication styles to meet the needs of different cultures.

 Barriers in Cross-Cultural Communication:

In business, cross-cultural communication is crucial to successfully conduct business with teams and stakeholders from
around the world. Everyone benefits from greater bandwidth, institutional knowledge, and competitive advantage when
communication is effective. Ineffective communication, on the other hand, can offend, confuse, or deliver the wrong
message, resulting in strained relationships with customers, partners, vendors, and staff. The following are some of the
most common cross-cultural barriers:
1. Language
Those from different cultural and linguistic backgrounds confront communication obstacles because miscommunication
is widespread among people who speak the same language. Misunderstandings can result from anything from a
mispronunciation of a word to a lack of specificity. Despite the fact that English is the most widely used international
business language, not every company in the world utilizes it on a regular basis. Employees may struggle to
communicate in English, which can lead to misconceptions when it comes to receiving directions, determining the level
of urgency, and addressing difficulties or concerns.
2. Stereotypes
These are generalizations about a group of people that are ascribed to individuals regardless of their personal traits due
to their membership in that group. Positive, negative, or neutral stereotypes exist. Many stereotypes are negative or
even hostile, and they create a severe communication barrier in the workplace. The stereotype is a concept that is
utilized in a variety of situations. The uniqueness of Chinese cultural characteristics, for example, has been recognized
in various ways. Chinese people are frequently described as emotionally reserved, introspective, serene, exceedingly
courteous, socially cautious, self-restrained, and so on.
3. Body Language
Body language is a term that refers to all non-verbal communication. This includes how we welcome people, sit or
stand, our facial expressions, clothes, hairstyles, tone of voice, eye movements, how we listen, how we breathe, how
near we stand to others, and how we touch others. Body language exerts a strong influence in emotional situations,
where body language frequently takes precedence over words. Kinesics is the scientific study of body language.
Around the world, eye contact, posture, and facial expressions have distinct connotations.
4. Emotional Display
From culture to culture, what constitutes an appropriate display of emotion varies. In certain nations, expressing wrath,
fear, or irritation at work is deemed improper in the workplace. People from these cultures keep their feelings to
themselves and simply talk about the facts of the problem. Participants in various cultures are expected to disclose their
feelings during a talk. You can imagine the misconceptions that can occur when a businessperson expresses significant
emotion in the presence of coworkers who believe that such behavior is inappropriate.
5. Ethnocentrism
It is a tendency to criticize other groups based on one's own standards and ideals. Ethnocentric values not only operate
as a barrier to communication, but they can also affect a student's mood and productivity. Ethnocentrism is the belief
that one's own group's culture is good, right, and rational, whereas other civilizations are inferior.
6. Prejudice
Prejudice emerges when someone's characteristics are 'prejudged' simply because they are classified as belonging to a
certain group. It's frequently linked to negative attitudes about that particular group. This mental barrier can be
disastrous for organizational communication since it can prevent entire groups of employees from receiving critical
information.

 Effectiveness in Cross-Cultural Communication:

In today’s diverse workplace, communication issues can take on an added dimension of complexity. Every culture has
its own set of tacit assumptions and tendencies when it comes to face-to-face interactions, and trying to get your point
across effectively can sometimes be difficult. Even when a language barrier doesn’t exist, cross-cultural communication
can be challenging. Here are our top ten tips for effective cross-cultural communication:
1. Maintain etiquette
Many cultures have specific etiquette around the way they communicate. Before you meet, research the target culture,
or if time allows, do some cross cultural training. For example, many cultures expect a degree of formality at the
beginning of communication between individuals. Every culture has its own specific way of indicating this formality:
‘Herr’ and ‘Frau’ in Germany, reversing family and given names in China and the use of ‘san’ in Japan for men and
women etc. Be aware of these familiarity tokens and don’t jump straight to first name terms until you receive a cue
from the other person to do so.
2. Avoid slang
Not even the most educated non-native English speaker will have a comprehensive understanding of English slang,
idioms and sayings. They may understand the individual words you have said, but not the context or the meaning. As a
result you could end up confusing them or at worst, offending them.
3. Speak slowly
Even if English is the common language in a cross cultural situation it’s not a good idea to speak at your normal
conversational speed. Modulating your pace will help, as will speaking clearly and pronouncing your words properly.
Break your sentences into short, definable sections and give your listener time to translate and digest your words as you
go. But don’t slow down too much as it might seem patronising. If the person you’re speaking to is talking too quickly
or their accent is making it difficult for you to understand them, don’t be afraid to politely ask them to slow down too.
4. Keep it simple
In a cross cultural conversation there’s no need to make it harder for both of you by using big words. Just keep it
simple. Two syllable words are much easier to understand than three syllable words, and one syllable words are better
than two syllable words. Say “Please do this quickly” rather than “Please do this in an efficacious manner.”
5. Practice active listening
Active listening is a very effective strategy for improving cross cultural communication. Restate or summarise what the
other person has said, to ensure that you have understood them correctly, and ask frequent questions. This helps build
rapport and ensures that important information doesn’t get missed or misunderstood.
6. Take turns to talk
Make the conversation flow more freely by taking it in turns to speak. Make a point and then listen to the other person
respond. Particularly when people are speaking English as their second language it’s better to talk to them in short
exchanges rather than delivering a long monologue that might be difficult for them to follow.
7. Write things down
If you’re not sure whether the other person has understood you properly, write it down to make sure. This can be
particularly helpful when discussing large figures. For example, in the UK we write a billion as 1,000,000,000 but in
the USA, it’s written as 1,000,000,000,000.
8. Avoid closed questions
Don’t phrase a question that needs a ‘yes’ or ‘no’ answer. In many cultures it is difficult or embarrassing to answer in
the negative, so you will always get a ‘yes’ even if the real answer is ‘no’. Ask open-ended questions that require
information as a response instead.
9. Be careful with humour
Many cultures take business very seriously and believe in behaving professionally and following protocol at all times.
Consequently they don’t appreciate the use of humour and jokes in a business context. If you do decide to use humour
make sure it will be understood and appreciated in the other culture and not cause offence. Be aware that British
sarcasm usually has a negative effect abroad.
10. Be supportive
Effective cross cultural communication is about all parties feeling comfortable. In any conversation with a non-native
English speaker, treat them with respect, do your best to communicate clearly and give them encouragement when they
respond. This will help build their confidence and trust in you.

 MANAGING CROSS CROSS-CULTURAL NEGOTIATIONS:

MANAGING CROSS CROSS-CULTURAL NEGOTIATIONS have always wondered what it is that makes cultures
different. As a Venezuelan-Greek, with strong British education, I consider myself blessed with the ability to adapt to
others. However, in pressured times like the present, cross-cultural negotiations are fraught with difficulty. The pressure
to sign the deal or act in a way to impress urgency, can really throw a negotiation off the rails.
1.Build rapport
Take time to build the relationship and understand the other parties; not only what they are looking for in interacting
with you, but also their relative cultural drivers (the leading indicator is Hofstede’s index on cultural variations.
2.Communication – be respectful of symbols or associations
Be aware of etiquette in terms of actions as well as symbolisms, which can both inadvertendly impact your discussions
negatively . For example, binding documents in a purple folder, may not go down too well in Italy where it is
associated with bad luck…
3.Learn from what we call Cultural Ambassadors
If you work in a multinational corporation track people from the country that you are likely to be engaging with, and
discuss how things are done in their countries, the real dos and don’ts in their business culture.
4.How are decisions made?
Be aware of the relative importance (or not) of hierarchy and power distances. Autocratic behaviour is acceptable in
high power-distance countries, such as the Middle East or Africa but clashes with the more equitable Anglo-Saxon
cultures.
5.Negotiation lengths
Timeframes for agreements and negotiations vary; generally, the further east from Europe, the longer the negotiation
timeframes. Do not push for quick responses or exert pressure for agreements in China or the Middle East.
6.Demonstrate sensitivity to gender issues
This is particularly relevant for women in male-dominated culture. A lead female negotiator may face resistance in
what are more “masculine” cultures. Whilst in a lot of countries the traditional role of women is changing, best to err on
the side of caution and split the chairing of the negotiation with by both a man and a woman.

 Repatriation:
Repatriation is a process of returning back from a international assignment to a home country after completing the
assignment or some other issues. Repatriation is the last step in the expatriation cycle and it involves readjustment and
re-entry of international managers and their families back to their home country. Expatriation and repatriation are not
two separated processes, rather the former is a beginning and the latter the closure. The term may also refer to the
process of converting a foreign currency into the currency of one’s own country.
 There are a many successful international assignments which are very important to the employee career as well
as for the company’s growth. So many companies send expatriate to other countries for doing business
internationally.

 The employees who are send to abroad for international assignment are expatriates those employees who
learned many things that would be useful to those who will be sent to that same country if some means could be
identified as to how they might be mentors to future expatriate employees.

 Expatriates can bring new and unusual approaches to cultural environment, information gathering, analysis of
data, and problem-solving as a result of having work cross-culturally in an effective manner.
  Expatriates may have been more flexible, or less rigid, in changing circumstances. In that different approaches
have been tried in other contexts, they may be able to bring insights and innovation to the planning process that
may not have been considered previously.

 The repatriate who have performed at a high level in a HCN may bring a dimension of confidence and
competence that will enhance his or her value to the company as it competes in a changing world market.

 Repatriation challenges:

Repatriation refers to the process of returning an employee who has been working in a foreign
country back to their home country. While repatriation is often seen as a positive and exciting
experience, it can also be challenging for employees. Here are some of the challenges that
employees may face during repatriation:

1. Reverse culture shock: Reverse culture shock is the psychological and emotional
adjustment that occurs when an individual returns to their home country after an extended
period abroad. This can lead to feelings of disorientation, frustration, and even depression
as the individual adjusts to life in their home country.
2. Career challenges: Employees who have been working abroad may face challenges when
trying to reintegrate into their home organization. This may include difficulty finding a
suitable position within the company or difficulty adapting to changes that have occurred
in the organization during their absence.
 3. Loss of status: Employees who have been working abroad may have enjoyed a certain level
of status and recognition within the organization. Upon returning home, they may find
that their status has diminished, and they are no longer considered as valuable as they
once were.
4. Financial issues: Repatriation can be expensive, and employees may face financial
challenges when returning home. They may need to find a new home, purchase a new
vehicle, or pay for children's education. Additionally, they may need to adjust to a lower
salary than what they were earning abroad.
5. Difficulty maintaining relationships: Employees who have been working abroad may have
established close relationships with colleagues, clients, and others in the host country.
Upon returning home, they may find it difficult to maintain these relationships, which can
be emotionally challenging.
6. Lack of support: Employees who have been working abroad may feel that they do not
receive adequate support from their organization or colleagues upon returning home. This
can lead to feelings of isolation and frustration.

To address these challenges, organizations can take several steps to support employees during
the repatriation process. This may include providing financial support, offering career counseling,
and facilitating re-entry training and cultural adjustment programs. By providing support to
employees during the repatriation process, organizations can help ensure a smooth transition
and reduce the negative impact of repatriation challenges.

 Repatriation Benefits:
Repatriation is when an expatriate employee returns to their country of origin after working in a different country. It is
common for repatriation benefits to be overlooked when putting together relocation packages.
When your employee needs to move back to their home country, it can be costly. To help offset these costs and help
your employee navigate this transition, you should consider including repatriation benefits in your company’s
relocation packages.
 Departure Services

Many companies will assist their employees with lease termination, utility termination, de-registration from the local
government and schools, dilapidation negotiations, and final billing when dealing with global mobility.
 Move Management

Your company could help to coordinate the shipment of household goods from the departure location to your
employee’s returning location with the help of a relocation specialist.
 Cross-Cultural Training
Cross-cultural training is also a great way to help your employee get used to the culture back in their home country.
Cross-cultural training programs typically get started around six weeks after the employee has settled into their new
location. This training will help identify any issues your employee may be experiencing due to changing countries.
 Career Development

When your employee has been living in a different country for an extended period, it is essential for them to feel that
their time in the other country was worth it.
Your employee will want to use the experience they gained overseas and use that experience in their career when they
return home. Career development will help your returning employee learn how to utilize their experience from overseas
in their new job role when they return home and begin their new job position.
 Emotional Counseling

Many companies offer emotional counseling for both the returning employee and the employee’s family. Emotional
counseling can help your employee feel confident about returning to a new career path in their home country and help
them feel more comfortable with their new role.

 Repatriation Process:
Repatriation refers to the process of sending an item, commodity, asset, or individual from a foreign nation to a
homeland. The process process applies to anyone returning from a foreign country to their origin. It also includes the
conversion of foreign currency into domestic currency.
Under the repatriation process, an individual residing in a foreign country can go back voluntarily or even be forced out
of a nation. The homeland is responsible for the transport of its citizens. This process applies to refugees, deportees,
and foreign nationals as well. In the U.S., citizens must pay a repatriation tax – the transition cost of converting money
earned overseas into US dollars.

The repatriation process refers to the process of returning an employee who has been working
in a foreign country back to their home country. The process can be complex and challenging,
and it is essential for organizations to develop a comprehensive plan to support employees
during the transition. Here are the key steps in the repatriation process:
1. Pre-departure preparation: Before the employee leaves the host country, the organization
should begin preparing for their return. This may include reviewing the employee's job
description and responsibilities, identifying potential challenges that may arise during the
repatriation process, and developing a plan to address these challenges.
2. Communication and coordination: Communication and coordination are critical during the
repatriation process. The organization should communicate regularly with the employee to
keep them informed of any changes that may affect their return, and coordinate with
relevant departments (such as HR, finance, and IT) to ensure a smooth transition.
3. Cultural adjustment: Cultural adjustment is an important part of the repatriation process.
The employee may have become accustomed to the culture and way of life in the host
country, and it may take some time for them to readjust to life in their home country.
Organizations should provide support and resources to help employees navigate this
transition, such as language training and cultural adjustment programs.
4. Career development: Organizations should work with employees to identify potential
career opportunities upon their return. This may include discussing potential job
opportunities within the organization, providing career counseling and training, and
identifying opportunities for professional development.
5. Re-entry support: Re-entry support is essential to help employees reintegrate into the
organization and their home country. This may include providing support for finding
 housing, transportation, and other practical matters, as well as social support to help the
employee reconnect with colleagues and friends.
6. Evaluation and feedback: Organizations should evaluate the effectiveness of their
repatriation process and seek feedback from employees to identify areas for improvement.
This can help ensure that the process is effective and that employees feel supported
during the transition.

Overall, the repatriation process can be complex and challenging, but with the right planning
and support, organizations can help employees make a smooth transition back to their home
country and successfully reintegrate into the organization.
 Managing Repatriation:
• Make sure you’re sending the right people abroad.Carefully assess who will be successful. Don’t just look at their
technical skills; consider the employee and his family’s ability to adapt to a new culture.
• Clearly define the expat’s career goals before the overseas assignment begins and make sure the goals reflect
your company’s overall objectives. If the purpose of overseas assignments, for example, is to give your company
global reach, then view the trip as a stepping-stone toward that goal. Have a strong sense of where the assignment will
lead next for the employee.
• Discuss the challenges of repatriation before the employee leaves. Let the expatriate know that coming home can
be difficult, and stress the importance of staying connected to the home office.
• Create a mentor program. Assign mentors before employees go abroad so they’re involved from the start. The
mentor should continue to help throughout the stay and for six months after employees return home. If possible,
mentors should be previous expats who worked in the same region as the employees they are mentoring.
• Encourage expats to make regular visits to the home office through a home-leave policy. They can reconnect
with colleagues and new employees, and help prevent feeling “out of sight, out of mind.” Help expats stay in the loop
by including them in companywide e-mails and newsletters. Managers at home can serve as advocates by looking for
job openings and mentioning their names in discussions.
• Understand and educate management on the challenges of repatriation. Recognize that when returning home,
repats can experience reverse culture shock. Look for symptoms, which include boredom, withdrawal, feelings of
frustration, and distancing from coworkers. Help repats by letting them know they’re not alone and their feelings are
normal.
• Find positions and activities that use repats’ new skills. Allow them to act as mentors, put them on assignments in
which they can interact with overseas colleagues, and encourage them to continue to learn a foreign language or join a
community organization related to the country where they lived.
• Provide support to the entire family. Help the repat’s spouse find a new job, and offer counseling to the parents and
children on readjusting to life after living abroad.
• Encourage repats to approach repatriation similarly to relocating overseas. Many people are well prepared for
their move abroad and expect that life will be different. Repats should have a similar mind-set when they return home.
They should approach it as another new adventure. Make sure that repats set realistic goals, are aware of changes in
their home offices, and reflect on personal changes and new priorities.
• Once repats have returned home, offer a counseling program. Review their international experience and discuss
the challenges of repatriation both personally and professionally. Discuss with the repats how their business has
changed and how to capitalize on their global experience.