Analyzing Challenges in International Human Resource Management (IHRM)

This report examines the challenges encountered in international human resource management (IHRM) within global and multinational organizations. It emphasizes the increasing expansion of organizations across borders and the associated complexities in managing a diverse, international workforce. The report highlights the importance of cultural awareness, effective communication, and trust-building in the international market. Key challenges discussed include compensation structures, leadership development, adaptation to technological changes, staffing policies, compliance with international laws and regulations, and managing diversity across multiple generations and cultures. The report concludes by stressing the need for organizations to address these challenges through training, innovation, and strategic IHRM practices to enhance efficiency and achieve success in the global environment. Desklib provides students with access to a variety of resources including similar reports and solved assignments to aid in their studies.

Human resources Management

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Table of Contents
Introduction................................................................................................................................2
Literature Review.......................................................................................................................2
Conclusion..................................................................................................................................6
References..................................................................................................................................7

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Introduction
In this report challenges are discussed that occur while working in a global landscape
or in multinational organisations related to international human resource management. Every
organisation is expanded beyond borders thus there are various problems associated with
international human resource management. Thus for making sure that business works
effectively a systematic approach is developed for working cultural awareness of an
organisation. This report will depict the advantages as well as challenges that need to be
enhanced for achieving the success of an organisation in global environment. Thus it is
important to resolve these challenges by adapting to technological changes and meeting all
the issues of globalization.
Literature Review
According to (Saravanan and Vasumathi, 2015), there are different dimensions in
which people work the reason could be their history, topology or climate. It is difficult to
explore the organisation at global level as every group have different cultural norms. From
the perception of international human resource helping an organisation to grow globally is
difficult as well as important. The major building block of an organisation is communication,
building trust in the international market, understanding the target audience and making
decision accordingly. To avoid such complication international human resources managers
are introduced to deal with the cultural as well as potential clashes. These issues need to be
resolved as they cause difficulty in understanding. The multinational companies design
innovative plans to resolve the negative issues. It was researched that many companies are
struggling the issue of compensation that is how to provide best structure of compensation to
every employee. Multinational organisation not only suffers in terms of companies’ size but
also in terms of big payrolls. Additionally, organisation need to offer additional benefits in
terms of training, taxes, accommodation and other expenses which is higher than employee’s
salary.
In the views of (Taylor, Beechler and Napier, 2016), some trends that affect the
global trends of international human resource management include increasing global trade by
expanding cross cultural workforce. To do this some concerns are that technology need
updated to resolve the problem of training and development. Most of the companies face the
challenge in change management thus a proper training need to be developed by

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understanding the needs of employees and developing a proper strategy for management. One
of the biggest challenge faced by multinational companies are leadership development as
proper structures, tools and strategies need to be initiative to make best possible selection and
progress by making future leaders. There are challenges associated in the transaction system,
staffing, learning and development sector and measuring the effectiveness of an organisation.
In today’s era the significant challenge is adapting to new innovation as technology changes
rapidly. While expanding the organisation at international level, businesses must be swift to
adapt to the innovation and risks associated in the competitors market. The challenge is to
make all employees learn about the new technologies.
In the perception of (Tayeb, 2014), staffing policy is a noteworthy challenge for
exploring the business in international market as the growth of company is directly related to
the retirement of employees that have talent. But recruitment process is difficult in
international market due to demographics changes. Apart from that there are cultural
differences associated with top members of an organisation and the new entities in the
company. These problems where very critical in past years but now a days these issues are
resolved as some frameworks are adopted such as catalytic learning. Other than that various
systems were designed including location planning, HR planning and relocation management
(Brewster, et. al, 2016). Also, to overcome from the issues in staffing plans a selection
process is decided to eliminate the conflicts additionally plans associated with training and
development are revised.
According to (Schuler, Dowling and De Cieri, 2010), the major challenge faced by
multinational companies is international compensation that deals with collecting all the
practices as well as identifying ideas from all the perception. The most common challenges
faced by IHRM department when expanded an organisation globally is compliance with laws
and regulations as changing employment laws act as a struggle for owners as they are not
able to access the audits or important information (Cron, 2018). Apart from that as business
tends to grow internationally the structure, strategy and various processes are associated with
it. Thus employees go through hardships in coping with the time during changes. It was
researched that many organisation experience downfall in productivity due to these changes.
In the view of (Geringer and Frayne, 2010), challenges faced by multinational
companies in terms of IHRM are performance management, managing the rewards and
appraisal system and managing the diversity. In an organisation there are multiple

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generations with different ethnic and cultural factors. Thus it is important to create a unique
culture that emphasis the rules and standards of an organisation (Harzing and Pinnington,
2010). IHRM need to be carried out to facilitate effective communication between
employees, and eliminating the uncertainty. It is also important to maintain the talented
employees in the company for a longer run so that issue of international human capital
doesn’t arrive.
According to (Long, Ajagbe and Kowang, 2014), one of the major challenges faced
by companies in terms of international human resource management is to recognize the basic
culture so that business policies can be set accordingly. As many organisation do not adaptive
to changes in the modern world as they need to deal with the challenges like customers
demand, implication of new technologies, information sharing as well as dealing with job
security. The biggest problem is poor response to innovation which leads to low productivity
and decrease the effectiveness of an organisation. Thus to overcome with this problem it is
necessary to introduce western technology as well as new management skills to achieve by
equity ventures in an organisation.
In the perception of (Saunders, Gray and Bristow, 2017), a business face
complications in terms of global marketplace as they recruit employees from different
geographical area and cultural background, so whenever changes occur in the laws it is very
difficult to adapt to changes especially in terms of taxes and liabilities. For example while
hiring employees who are not from international market are required to pay additional taxes
which are very difficult to implement. Hence for an HR department it becomes difficult for
working with the economic data. Also whenever businesses start to expand an international
market, they occupy a global marketplace because they have employees from every
geographic background (Altlas, 2018). The other challenges involve legal and political
regulations as they changes according to the external regulations and laws. These factors are
the major concerns in the implication of business at international market and manage the
normal functioning of a company without any breakdown due to human resource
management.
In the concern of (Nasir, 2017), it is important to know about the ethic associated with
the companies in the history. Thus in present it is the task of human resource team to take
ethical decisions to offer high level of efficiency by conducting conferences regarding the
diversities and giving knowledge about the international market. Apart from that it was stated

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by (Ellmer and Reichel, 2018), to overcome from all these challenges the human resource
team need to educate the employees along with managers for mitigating the challenges. This
could be done by promoting all the workers in a workplace to communicate with each other
to remove the diversity between the countries. Apart from that development of technologies
affect the performance of an organisation and helps in competing with the other organisation.
One of the challenges which cannot be ignored is human capital and requires lot of efforts to
manage the human capital of an organisation. Once the company is globally explored if any
employees leave an organisation in initially period, it will be a loss for the company as they
have spent lot of time and money in their training and development.

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Conclusion
Thus it can be concluded from the report that there are various issues regarding the
human resource department in an organisation. Especially when an organisation is expanded
to global market various factors affect company like the organisational structure along with
different interpersonal skills of employees. It can be stated that when an organisation enters a
global landscape, conducting training sessions for an employees is a challenge to attain better
globalization. Other than that there are various challenges include leadership, diversity, e-
commerce policies, selection of recruitment policies, managing the empowerment, innovation
of new technologies. These are some challenges that are caused by human resource
management and hence measures need to be taken to improve and enhance the efficiency of
an organisation.

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References
Altlas, S. ,2018. 10 of Today’s Common Human Resource Challenges. Available from
https://www.atlasstaffing.net/blog/10-todays-common-human-resource-challenges Accessed
on 03 April 2018.
Brewster, C., Houldsworth, E., Sparrow, P. and Vernon, G., 2016. International human
resource management. Kogan Page Publishers.
Cron, 2018. International HR Issues. Available from
http://smallbusiness.chron.com/international-hr-issues-61937.html Accessed on 03 April
2018.
Ellmer, M. and Reichel, A., 2018. Crowdwork from an IHRM Perspective–integrating
Organizational Performance and Employee Welfare.
Geringer, J.M. and Frayne, C.A., 2010. Human resource management and international joint
venture control: A parent company perspective. Management International Review, 30,
p.103.
Harzing, A.W. and Pinnington, A. eds., 2010. International human resource management.
Sage.
Long, C.S., Ajagbe, M.A. and Kowang, T.O., 2014. Addressing the issues on employees’
turnover intention in the perspective of IHRM practices in SME. Procedia-Social and
Behavioral Sciences, 129, pp.99-104.
Nasir, S.Z., 2017. Emerging Challenges of IHRM in 21st Century: A Theoretical
Analysis. International Journal of Academic Research in Business and Social Sciences, 7(3),
pp.216-223.
Saravanan, P. and Vasumathi, A., 2015. The Impact of Demographic Profile on Strategic
IHRM Practices and Its Challenges Faced by HR Managers in IT Firm, India: An Empirical
Study. World Academy of Science, Engineering and Technology, International Journal of
Social, Behavioral, Educational, Economic, Business and Industrial Engineering, 9(9),
pp.3214-3223.

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Saunders, M.N., Gray, D.E. and Bristow, A., 2017. Beyond the Single Organization: Inside
Insights From Gaining Access for Large Multiorganization Survey HRD Research. Human
Resource Development Quarterly, 28(3), pp.401-425.
Schuler, R.S., Dowling, P.J. and De Cieri, H., 2010. An integrative framework of strategic
international human resource management. Journal of management, 19(2), pp.419-459.
Tayeb, M., 2014. International human resource management: A multinational company
perspective. OUP Catalogue.
Taylor, S., Beechler, S. and Napier, N., 2016. Toward an integrative model of strategic
international human resource management. Academy of Management review, 21(4), pp.959-
985.