International Developments That Have Critical Implication for Essay

International Developments That Have Critical Implication for International HRM - Essay Example A number of important international developments are presently taking place that has critical implication for international HRM. They include; (a) the growth of multinationals in the emerging markets, (b) constant increment levels of foreign direct investments, (c) the growing power of cross-border alliances (M&As) that involve companies from the emerging markets, (d) a growing trend in business process outsourcing, and (e) the challenges posed by the current financial crisis and the way to manage effectively in difficult times. The emerging international economic scenario characterized by the rise of economically stronger emerging markets is creating serious challenges for the IHRM policymakers; however, the same scenario lays immense opportunities for the IHRM researchers. The model of strategic international HRM (SIHRM) is based on the earliest and most famous article by Schuler, Dowling and De Cieri. The model describes endogenous and exogenous factors and strategic components th at have an effect on SIHRM policies, issues, functions, and practices. They, in turn, affect the MNC goals such as efficiency, learning, flexibility, effectiveness, responsiveness, and transfer. According to the model, the external factors (industry characteristics, country-regional characteristics and inter-organizational networks) have an effect on the internal organizational factors, strategic HRM and MNE (multinational enterprise) concerns and goals. The internal organizational factors, strategic HRM and MNE concerns and goals affect each other. The internal organizational factors include; (a) MNE structure – structure of the international operations, intra-organizational networks, mechanisms of coordination, and modes of operations, (b) MNE strategy – corporative level strategy and business level strategy, (c) experience in the management of international operations, and (d) headquarters international orientation. Strategic HRM entails HR function strategy and HR practices. MNE concerns and goals entail competitiveness, efficiency, the balance of local responsiveness and international integration, and flexibility.