International Human Resource Management

Running head: INTERNATIONAL HUMAN RESOURCE MANAGEMENT
International Human Resource Management
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1INTERNATIONAL HUMAN RESOURCE MANAGEMENT
As opined by Cooke (2016), the process of internationalization and the widespread
usage of different kinds of innovative technologies have significantly changed the nature of
the contemporary business world from that of the earlier times. Reiche, Harzing and Tenzer
(2018) are of the viewpoint that there are various factors which motivate the business firms to
undertake the process of international expansion like to opportunity to increase their customer
base and thereby profitability, opportunity to enhance the scope of their business and others.
In this regard, it needs to be said that there are various methods through which the firms enter
into the business markets of different host nations like merger and acquisition, foreign direct
investment (FDI), strategic alliances, franchising, licensing and others (Hajro 2015).
However, one of the most important problems that the diverse firms face for the process of
their business in the host nations is related to the effective management of their human
resources because of the fact that they are not sure regarding the kind of human resource
management (HRM) that they need to adopt in the host nation (Sarala et al. 2016). This can
be explained on the basis of the fact that national cultures of different nations, on which the
business style depends, vary from each other and the international firms are often in a
dilemma whether they should follow the HRM that they had been following in the parent
nation or should they modify it on the basis of the national culture of the host nation. This
essay will analyze the international human resource management issues that the business
firms during the process of cross-border mergers or acquisitions in the particular context of
Johnson & Johnson’s acquisition of Actelion.
Tarique, Briscoe and Schuler (2015) have articulated the viewpoint that the cross
border merger and acquisitions have become the recent trend within the framework of the
contemporary business world and its emergence can be attributed to the process of
internationalization or globalization. As opined by Yao (2016), cross border merger and
acquisitions can be defined as the process through which a firm either undergoes a merger

2INTERNATIONAL HUMAN RESOURCE MANAGEMENT
with some other business firm operational in another nation or acquire its. In this regard, it
needs to be said that the firms through the usage of this process either acquires a particular
section of the firms or completely acquires or for that matter forms a new firm by its merger
with the other concerned firm (Teerikangas et al. 2015). More importantly, there are various
benefits or rewards that the firms are likely to get by indulging in such a process like the
opportunity to use the resources of the other firm, their customer base, the product portfolio
offered by them and others. Furthermore, recent researches in a succinct manner reveal the
fact that this is one of the most commonly used modes of market entry into the business
markets of the other host nations (Xie, Reddy and Liang 2017). This is perhaps one of the
major reasons for the extensive usage of this process in the recent times by the different
business firms from all over the world and some of the most important examples in this
regard are Johnson & Johnson’s acquisition of Actelion, the merger between U.S.-based
chemicals firm Huntsman Corp (HUN.N) and European rival Swiss Clariant AG (CLN.S)
and others (CNBC 2019). As a matter of fact, an article of Forbes.com (2019) clearly reveals
the fact that the instances of cross border merger and acquisitions in the last decade between
the different US and European business firms have increased by more than 82% because of
the higher propensities shown by the firms to indulge in the process of global expansion.
However, despite the plethora of benefits offered by the concerned process there are various
issues like international human resource management (IHRM) issues, cross-cultural issues
and others that the firms need to take into account for indulging in the concerned process
(Reiche et al. 2016).
Johnson & Johnson in January 2017 made the offer to acquire the Swiss firm Actelion
for the creation of a new R & D firm, which is called by the name of Idorsia (Jnj.com 2019).
The Swiss firm was acquired by Johnson & Johnson for $30 billion or more particularly each
of the shareholders of the concerned firm were to receive around “$280 per Actelion share”

3INTERNATIONAL HUMAN RESOURCE MANAGEMENT
after the formation of the new firm in June 2017 (CNBC 2019). This move on the part of the
firm is not only considered as an initiative to enter into the pharmaceutical business market of
Switzerland but also as an initiative on the part of the concerned firm to reduce the business
competition that it had faced in the pharmaceutical business industry in the earlier times
(Forbes.com 2019). More importantly, Johnson & Johnson not only got the opportunity to use
the brand image of the firm Actelion for the process of their business in Switzerland but at
the same time was able to utilize the resources of the concerned firm for the development of
new line of products. On the other hand, the firm Actelion was also being able to gain in a
significant manner through the deal by the reinvigoration of its business and profitability
since in the recent times it had been seen that the performance as well as the profitability of
the concerned firm had gone down in significant manner (CNBC 2019). However, at the
same time it was seen that the new firm Idorsia, which was formed through the deal under
discussion faced various kinds of IHRM issues and also cross-cultural communication issues
that adversely affected the prospects of the concerned firm.
Francis, Huang and Khurana (2016) have articulated the viewpoint that one of the
major issues that the different firms undertaking the process of cross border merger and
acquisition face and which as a matter of fact significantly affects the stability of the new
firm that had been created can be ascribed to the IHRM issues. As opined by Humphery‐
Jenner, Sautner and Suchard (2017) one of the major IHRM dilemmas that the firms during
the process of cross border merger and acquisition is the fact that they are often confused
regarding which employees to offer important management designations and others for the
effective management of the business operations of the new firm that had been created on the
basis of the process of merger or acquisition. This can be explained on the basis of the fact
that the top-performing employees from both the firms involved in the concerned process had
expectations that they would be rewarded for the hard-work that they have done for the sake