Institutional and Cultural Factors in International Human Resource Management

Human Resource Management

Comparative Human Resource Management 1
Introduction
International human resource management is the responsibility of HR manager to solve the
issues and problems arises in the international level. Due to globalisation, the economy has
been integrated around the world. There are many companies enter the new market into the
other nations for expansion and exploring the business. It is observed that there are many
issues and challenges face by the companies in other country and those are necessary to solve
for the effective operation. Human resource management is the major part in the organisation
in order to gain the competitive advantage in the new market by solving the issues. The HR
strategies and policies has been design by the company as per the external environment of the
company. The strategies and policies has been design by the companies in the context of
enhancement of organisation performance.
This paper brings the discussion on the institutional and cultural factor that shaped the
International human resource management. It also covers the topic of need for global
integration of HR strategies, policies and practices with the pressure to adapt to host country.
Globalisation
Globalisation is increasing day by day and the rise of globalisation brought the many changes
in the world. These changes directly impact the business of multinational companies. The
government support the trade system in order to achieve the international integration. It has
been seen that the function of the company is vary as per the condition of the nations and the
organisation themselves. Although, it is beneficial for the companies and well as for the
economy in the context of the growth but the issues arises and factors affects the business
across the world. The process of globalisation has their own advantage and disadvantage for
the companies. It has been seen that the companies also face the issues of HR strategies,

Comparative Human Resource Management 2
processes and practices with that of host country. Member of the companies are also from the
different background due to which the cultural and social factors also affects the business
(Krugman, 2017).
How can institutional factor impact the IHRM
As discussed above, the external and internal factors affect the IHRM practices, policies and
strategies. Internal factors are also called the institutional factors that impact the growth of
the business and the HR practices, strategies, and policies of international human resource
management. Internal institutional impact is at the top management level, corporate culture
and the strategies of the company. The expansion in the business in the different country
affects the strategies, and policies (Deuchars, 2017). Different countries have their own rules
and regulation to do the business that is why, the company also has to follow the rules as per
the nation. In this scenario, the HR policies have been design as per the laws and acts of the
nation so that the company can face the less number of challenges and gain the competitive
advantage. It is difficult for the company to survive for long time in the international level as
per their own rules and regulation (De Villa, Rajwani, Lawton, and Mellahi, 2018). It is also
observed that the HR policies of the company also have to design by the host company in
order to do the expansion of business in the other country because the existing policies does
not match with the political aspects of the nation. The host company has to set the code of
conduct as the expansion of the company in the different location that is why it has to adopt
the different laws. It is required for the organisation to maintain or frame the HR strategies
and policies so that it can operate smoothly in the market (Berger, 2017).
There are many other factors that affects the business and put the pressure to frame the HR
strategies and policies such as human capital, political system, economic system and the
culture. Economic system of the host country affects the business and affects the HR