Differences between international and domestic HRM

key differences between international and domestic HRM

1. TOPIC : DIFFERENCES BETWEEN INTERNATIONAL & DOMESTIC HRM

2. WHAT IS INTERNATIONAL HRM? IHRM can be defined as set of activities aimed managing organisational human resources at international level to achieve organisational objectives and achieve competitive advantage over competitors at national and international level.

3. What is domestic hrm? Domestic HRM is the process of procuring, allocating and effectively utilising the human resources in local countries. By the name itself,you should already have an idea that IHRMs work internationally or beyond national borders,whereas its domestic counterpart works within the set,local,national borders.

4. Domestic & international activities of the HRM function The cultural environment The industry within which the multinational is primarily involved Complexity involved in operating in different countries and employing different national categories of employees Attitudes of senior management Extent of reliance of the multinational on its home- country domestic markets

5. DIFFERENCE BETWEEN INTERNATIONAL & DOMESTIC HRM INTERNATIONAL HRM IHRM is done at international level. DOMESTIC HRM Domestic HRM is done at national level

6. IHRM is concerned with managing employees belonging to many nations. Domestic HRM is concerned with managing employees belonging to one nation.

7. IHRM has concerned with managing additional activities such as expatriate management. IHRM is very complicated as it is affected heavily by external factors such as cultural differences and institutional factors. Domestic HRM is concerned with managing limited number of HRM activities at national level. Domestic HRM is less complicated due to influence from the external environment.

8. Human resource managers working in an international environment face the problem of addressing HR issues of employees belonging to more than one nationality. Hence, these HR managers need to set up different HRM systems for different locations. Human resource managers in domestic environment administer HR programmes to employees belonging to a single nationality.

9. International HRM requires greater involvement in the personal life of employees. The HR manager of an MNC must ensure that an executive posted to a foreign country understands all aspects of the compensation package provide in the foreign assignment, such as cost of living, taxes, etc. In the domestic environment, the involvement of the HR manager or department with an employee’s family is limited to providing family insurance programmes or transport facilities in case of a domestic transfer.

10. International HRM has to deal with more external factors than domestic HRM. Domestic HRM has to deal with less external than IHRM. There are more risks involved in IHRM than in the domestic HRM. There are fewer risks involved in domestic HRM than in international HRM.