Differences between HRM practices by MNCs while operating in different nations

International
Human Resource
Management
Running head: International Human Resource Management
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Student’s Name
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International Human Resource Management
1
Essay: - Differences between HRM practices by MNCs while
operating in different nations
Human Resource management (hereinafter referred to as HRM) is one of the main activities of
an organization. It is well known that employees are the most important assets for business;
hence, their management also keeps a significant place. In order to discuss the meaning of HRM,
this is to state that the same is a set of different practices that includes recruitment, hiring,
management, and deployment of organization’s employees (Searchhrsoftware.techtarget.com,
2019). The HR department of an organization is usually responsible for the application and
review of employment policies (Mayhew, 2019). An HRM system has many of the objectives
such as organizational objectives, functional objectives, personal objectives, and societal
objectives. As HRM is responsible for the hiring of new talent and development of the current
one, hence the same exist in almost every organization of a good size. The world is changing and
due to globalization, entities are expanding their business activities in different countries. It has
been reviewed that practices related to HRM are different according to the countries. Even a
single organization adopts different aspects and practices while functioning in different
countries. The practices of HRM adopted in the home country of a multinational corporation are
known as domestic HRM. In other words, this may be stated that domestic HRM is a process of
effectively utilizing human capital in local countries. Further, when an HRM system aimed to
manage the organizational personnel at international level in order to achieve competitive and
organizational advantages, then the same is known as international HRM. The presented report is
focused on the difference between domestic and international HRM. While discussing the topic,
the argument will be focused on various aspects that an MNC adheres in a different manner
while dealing in domestic countries and while dealing outside.
In domestic and International HRM (IHRM), some similarities are there, specifically in the area
of staffing and planning of human resources, selection, recruitment, development, and appraisal.
If to talk about the differences between them, this is to state that where domestic HRM deals
with employees of only one nation, IHRM deals with three countries. It means in IHRM, HR
managers have to look after home county provisions, a country in which subsidiary is established

International Human Resource Management
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and the country from where labor is hired (Whatishumanresource.com, 2019). Globalization
brought so many new challenges and increased complexity. This would not be wrong to state that
IHRM is all concerned about managing the employees and other personnel from different
countries and origins (Pudelko and Harzing, 2007). People are different in foreign subsidiaries and
they cannot be treated in a similar manner because they have different living background and
mentality. This is the reason that most of the foreign ventures experience failure when they use
the same HRM process and practices in foreign subsidiaries. In such a reason, HR managers in
IHRM need to be more careful.
Further, the area and scope of IHRM is wider than the domestic HRM (Th.jobsdb.com, 2019). It
includes a range of activities. Law is one of the important concerns when it comes to IHRM.
Many laws are there which are applicable to HRM practices. For instance, while selecting the
employees these laws determine the criteria. It is relevantly easy in case of domestic HRM and in
case of IHRM, managers have to consider the laws of different nations. Further managers also
face issues with foreign currency and taxation law while practicing HRM in the cross border
(Dickmann and Sparrow, 2008). In this manner, such a manager has to consider global laws not
similar to domestic HRM where manager only look two or three acts. As stated earlier, HRM is
all about the management of human resources hence addressing the issue of them is also an
important aspect of this system. In day-to-day business dealing, human resources face many
issues, such as issues related to the work environment, their safety, and payments. When
manages to perform their functions in IHRM they often feel unable to address these issues. It is a
very common problem in the sector of IHRM. Cross-culture, management is a very difficult
situation to deal with and for these reasons, HR managers have to develop different HRM system
for different countries and locations (Singh, 2010). Translation of various documents such as
contractors, regulations, disciplinary actions courses, and other facilities is also another aspect
and task in IHRM.
Here the question of discussion is to check whether the HR practices are different in cases of
foreign subsidiaries or not. To answer this query, the comparison between two of the HR system
is compulsory and required to be done. Firstly, this is to state that two of these HRM systems
have certain similarities in mutual. Domestic as well as IHRM both affect from political factors
in a common way. Both of such system encourages human resources in order to meet the