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View metadata, citation and similar papers at core.ac.ukbrought to you byCOREprovided by University of Limerick Institutional RepositoryINTERNATIONAL HUMAN RESOURCE MANAGEMENT IN THE 21STCENTURY: EMERGING THEMES AND CONTEMPORARY DEBATESHugh Scullion, David G. Collings and Patrick GunnigleEary version of paper subsequently published in HRMJ (2007). The full citationis as follows:Scullion, H., Collings, D.G. & Gunnigle, P. (2007) “International human resourcemanagement in the 21st century: Emerging themes and contemporary debates”, HumanResource Management Journal, 17 (4), 309-319.
INTERNATIONAL HUMAN RESOURCE MANAGEMENT IN THE 21STCENTURY: EMERGING THEMES AND CONTEMPORARY DEBATESHugh Scullion David G. Collings and Patrick GunnigleINTRODUCTIONThere is little doubt that the empirical and theoretical foundations of internationalhuman resource management (IHRM), alongside their application in practice, havedeveloped significantly since the 1980s when Laurent (1986) described the field as inits infancy. Indeed, in a recent review of the field, Lazorova (2006: 43) optimisticallyargues: “As an area of research, IHRM is vibrant and diverse and has grown evenmore so in the past decade”. In a similar vein, Björkman and Stahl (2006) note thatnot only has the degree of research in the field increased, but so too has the scope ofthe studies undertaken (see also Schuler and Tarique, 2007). In this special issue, wehope to contribute to the vibrancy and diversity of the field. While a thoroughdiscussion of the state of the field of IHRM at the beginning of the 21st century isbeyond the scope of this introduction (cf. Lazarova, 2006; Bjorkman and Stahl, 2006;Schuler et al., 2002; Scullion, 2004 for a discussion in this regard) we instead focuson the future prospects for IHRM. We also introduce the five papers in this specialissue, each of which is written by leading figures in the field and each considering akey contemporary IHRM debate.INTERNATIONAL HUMAN RESOURCE MANAGEMENT IN PROSPECT:In this section we highlight some key aspects of the changing landscape ofinternational business and the key emergent issues for IHRM at the beginning of thetwenty-first century. This discussion is based on the notion that IHRM is “ a highlydynamic and constantly evolving field, with new themes emerging that transcendtraditional approaches” (Bjorkman and Stahl, 2006: 6). Thus, scholars in the field areencouraged to continue to expand their research in the field through exploring newideas through innovative theoretical and methodological approaches (see also Schulerand Tarique, 2007). While there are a wide range of influences which one coulddiscuss, we restrict ourselves to what we consider the most significant in the contextof IHRM. In particular we focus on the changing spatial landscape of internationalbusiness with the emergence of India, China and Central and Eastern Europe (CEE) as
increasingly important markets. Further, we point to the changing security landscapewhich MNCs must consider in the post 9/11 world. In terms of social trends, weidentify the changing nature of careers as a key factor impacting on managing humanresources on a global scale. Finally, at the organisational level, we explore thechanging nature of international assignments in the global firm. All of theaforementioned changes are likely to have a profound impact on the role of theinternational HR professional and thus merit consideration.Changing nature of global economic landscape: India, China, CEEThe first key contemporary trend which we identify as significant for IHRM at thebeginning of the twenty-first century is the changing landscape of internationalbusiness. This can be explained in part by the changing contours of foreign directinvestment (FDI) location in the global economy. While traditionally FDI flows havebeen concentrated in developed countries, recent years have heralded a shift in FDIlocation towards new destinations such as the EU accession countries, particularlythose in Central and Eastern European, while countries such India and China havealso become ‘hot spots’ for inward FDI (UNCTAD 2004; see also Dicken, 2007). Forexample, China recorded record inflows of US 79 billion in 2005 making it the mainrecipient of FDI in developing markets (Economic Intelligence Unit, 2006: 6).However, the most important single global shift of recent times has been theemergence of East Asia as a dynamic growth region, reflecting the spectacular recentgrowth rates achieved by the East Asian newly industrialising economies, as well asthe rapid growth of the Chinese economy (Dicken , 2007).The implications of the rapid growth of these emerging economics for IHRM researchare significant in various ways and their impact on the landscape of global businessfar exceeds their potential as locations for outsourced low-value aspects of MNCactivities. They also present unique challenges for western MNCs, in addition to thosefaced through operating in culturally and institutionally proximate contexts (Morleyand Collings, 2004). The distance between countries varies, not only spatially but alsoby culture.For example, it has been argued that the execution of cross-borderknowledge transmission between companies located in dissimilar cultural contexts ismore difficult than between companies in similar countries (Li and Scullion, 2006).
China is clearly an example of a ‘distant’ country from a western perspective (Tungand Worm, 2001).Another research stream focuses on the institutional dimension of distance andexamines its effect on MNC’s strategic choice (Peng, 2002). A major challenge facingMNCs in emerging markets is the difficulty in recruiting and retaining managerialtalent with the requisite skills to operate in these environments and further to persuadequalified candidates to transfer to these locations (Bjorkman and Xiucheng, 2003;Collings and Scullion, 2006). This is compounded by the fact that countries, such asIndia and China, face shortages of suitably qualified and skilled employees for MNCsand local enterprises alike (Budhwar, 2004; Gupta and Wang, 2007). Schuler andTarique (2007) note the importance of employer branding and becoming an employerof global choice for MNCs in ensuring a supply of appropriate talent in thesecountries (see also Sparrow, 2007).Likewise, with a few notable exceptions, wehave limited insights on the effectiveness of western HRM practices in developingcountries. IHRM professionals would benefit from an understanding of the extent towhich these locations can accommodate a range of specific HRM practices (Gamble,2001; Schuler and Tarique, 2007). A relevant example is Li and Scullion’s (2006)study on MNCs’ execution of knowledge management initiatives in China. SimilarlyTung and Worm’s (2001) work has explored the importance of human resources toMNCs in penetrating the Chinese market.As Meyer (2006) notes, a further theme is the key role of MNCs in transmittingcapital, knowledge, ideas and value systems across borders and consequently linkingdeveloped and developing economies in the global landscape. This impact is howeverunder-explored and research in relation to IHRM practice would be useful here.Exploring the impact of MNC’s economic footprint on the communities in which theyoperate has become a key concern of the International Labor Organisation (Schulerand Traique, 2007) and, given the potential implications of negative publicity for theMNC, monitoring this economic footprint may represent a key challenge forinternational HR professionals. Further, study on the IHRM strategy, policy andpractices of MNCs headquartered in these countries would contribute to the diversityof research in the field. This would help to illuminate some of the HR challenges
faced by MNCs from less developed countries, particularly those operating indeveloped countries.Increasing Global TerrorismA second key theme which has the potential to impact on IHRM is the increasingeffect of global terrorism. While this is most clearly evident in high profile eventssuch as the 9/11 attacks in New York and the 7/7 London bombings, there are anumber of other trends in terrorism globally which have the potential to impact on therole and functions of the IHR profession. These include recent events in oil richNigeria where high profile companies such as Royal Dutch Shell, Italy’s Agip andFrance’s Total have been targeted by militant groups. Specifically, Royal Dutch Shellwas targeted when a car bomb was placed in one of their compounds and one ofTotal’s oil facilities was stormed by armed militants resulting in the death of threepolice officers. These events have resulted in Shell evacuating the some 400dependants of expatiate employees stationed in Nigeria (Guardian, 2006). Not only dosuch events have an impact on the immediate work experience of expatriateemployees but they may also make the recruitment of future expatriate employees forroles in these countries more difficult. They will also increasingly challengeinternational HR professionals to adequately assess the risks associated with sojournsin volatile countries for assignees and their families. It mayalso herald a re-evaluation of options with regard to staffing arrangements in these countries and theexploration of alternatives to the traditional parent country national expatriate (a topicto which we return below). The employment of locals in key positions in these highprofile operations may emerge as a viable alternative.On a wider scale the impact of events such as 9/11 are likely to impact significantlyon the IHR profession. Most notably Konopaske and Werner (2005) argue, withoutempirical support, that US managers may be more reluctant to accept internationalassignments in the wake of the 9/11 terrorist attacks. Likewise it is possible thatnationals from other countries may be reluctant to accept assignments in the UK andthe US- countries which are most visibly associated with the ‘war on terror’ and, asillustrated by the 9/11 and 7/7 attacks, vulnerable to terrorist attacks. Linked to thesedevelopments, the landscape of international travel has changed considerably inrecent years. A SHRM survey in the US immediately following the 9/11 attacks found
that over 75 per cent of firms there allowed employees to cancel or curtail businesstrips, 45 per cent of firms cancelled events or meetings, while 56 per cent tightenedinternal security measures, including increased vetting of employees (SHRM, 2001).We know less however about the long-term effects of these attacks on IHRM policyand practice. However, some practitioner research in the US suggests that the longterm effects were minimal with the exception of attitudes towards travel and security(see Ryan et al, 2003; Korndrasuk, 2004).The 2006 terrorist threat in UK airports represented a further high profile recentexample of the impact of global terrorism on international business. The cumulativeeffect of these events means that international travel is now a more a stressfulexperience as a result of increased security restrictions and stricter hand baggagerestrictions which mean that business travellers routinely have to check luggage inand hence face further delays at the baggage belt. However, Collings et al (2007) notethat despite continued uncertainties and anxieties prevailing in the currentinternational climate, MNCs must, more than ever before, encourage staff to workabroad to better understand the global markets and to develop the skills required towork effectively across cultures. Thus IHRM professionals must come up withinnovative ways to staff strategic international positions, to encourage key staff toaccept vital international assignments and to facilitate international business travel(for a summary of the key HR issues see Collings et al., 2007).Changing Careers:A number of recent contributions to the IHRM field have noted the significance of thechanging nature of careers for MNCs (see Collings et al., 2007; Dickmann and Harris,2005; Stahl et al., 2002; Thomas et al., 2005). Key in this regard is the impact ofchanging attitudes towards careers and their influence on the willingness ofcandidates to accept international assignments, the conditions under whichassignments are accepted and retention after assignment (see Collings et al., 2007 fora discussion). This observation is based on two important factors. Firstly, in generalterms, we are witnessing a shift in how employees view their careers with increasingemphasis placed on career mobility and decreasing commitment to specificorganisations (DeFillippi & Arthur, 1996). Secondly, there is an emerging interest in
self-initiated international assignments or assignments initiated by individuals withoutorganisational support (cf. Inkson et al., 1997; Suutari and Brewster, 2000). Both ofthese trends are likely to impact significantly on IHRM policy and practice in theglobal firm and are likely to continue to represent key challenges for IHRMprofessionals in the future.In considering the former factor, there is a growing body of research which identifiesa disjuncture between international assignees’ perception of the value of internationalassignments from a career perspective and the perceived value from the organisationalpoint of view. Specifically, it is becoming increasingly apparent that individualassignees perceive the main value of the assignment asdeveloping individualcompetence which can be transferred across organizations and which is valued in theexternal labor market (DeFillippi & Arthur, 1996; Stahl and Chua, 2006; Stahl,Miller, & Tung, 2002). As Dickmann and Harris (2005: 400) note: “the link betweenan IA [international assignment] and the organization’s benefits in career capitalaugmentation is tenuous”, which further reflects the fact that internationalassignments may be more beneficial from an individual career perspective and inbuilding individual social capital than in building organizational capital. This isperhaps reflected in the fact that a significant percentage (estimates suggest 20 percent in first year and a further 20 per cent in the second) of employees leave theirorganizations within two years of their repatriation to the home country (see Lenihan,2006 for a summary). Suchturnover has obvious implications for both thedevelopment of managerial competence in the MNC and global leadershipdevelopment.Secondly, we point to the emergence of self-initiated international assignments asillustrative of the changing nature of careers in a global context (Thomas et al, 2005).By this we are referring to those whose international experience is not initiated by aninternational transfer within an organization but rather those who relocate abroadwithout organizational assistance and of their own accord (Inkson et al., 1997).Suutari and Brewster (2000) label these experiences self-initiated foreign workexperience (SFE). The key implication of the increasing number of SFEs who arejoining the global labour market is that MNCs can make use of these employees to fillkey positions in subsidiary operations at a lower cost than expatriates. However, there
is a dearth of empirical research both on the individual issues faced by SFEs andindeed issues around their re-entry to the home labour market and on the HR issuesfacing organizations who seek to employ them.Changing patterns of global staffingThe final contemporary theme which we explore in considering the changinglandscape of IHRM relates to emerging debates on the continued utility of thetraditional expatriate assignment in the face of a number of issues around increasingdemand for international assignees and a falling supply ofqualified candidates(Collings et al., 2007; Scullion and Collings, 2006). In relation to falling supply,Collings et al. (2007) point to four key trends- dual career issues, whereby potentialinternational assignees are no longer necessarily males, who are the sole breadwinners with spouses who are willing and able to relocate to support their husband’scareers; the limited participation of women in international assignments, which meansthat potential female assignees often fail to apply, or are overlooked, for internationalassignments despite their potential; issues around repatriation, which mean thatpotential assignees are likely to resist assignments due to concerns over theirreintegration into the home organisation on return; and weaknesses of talentmanagement at an international level, which constrainorganisational efforts toidentify and deploy high potential international assignees.The increasing demand for international assignees reflects the growth of emergingmarkets in countries such as those in Eastern Europe, India and China. This results ingrowing demand for expatriate employees who posses boththe desire and thespecific competences needed to manage in these markets. Further, there is increasingdemand for expatriate employees in a far wider range of organizations than thetraditional large MNC, partly due to the rapid growth of small and medium enterprise(SME) internationalization and international joint ventures (IJVs) (Scullion andBrewster, 2001).Organisations are currently re-evaluating their policies in relation to staffinginternational organisations due to a number of factors including those discussedabove. Further influences include the high costs associated with traditional
international assignments, combined with continued concerns over expatriateadjustment and failure and the difficulty of managing the performance of suchassignees. As a result of these factors we are witnessing the emergence of a portfolioof international assignments including- short-term assignments, international businesstravellers, rotational assignments and international commuter assignments, and virtualassignments (Collings et al., 2007; Fenwick, 2005; Hertel et al, 2005; Tahvanainen etal., 2005; Welch and Worm, 2006). The emergence of these alternative, more flexible,forms of global staffing and issues around their management and administration arelikely to represent a key challenge for IHRM professionals and academics in thetwenty-first century.As should be clear from the proceeding discussion, we agree with Lazarova’s (2006)assessment of the field of IHRM as being vibrant and diverse, and we predict a verysanguine future for IHRM research in the early decades of the twenty-first century.In contributing to this field, we feel the five papers in this special issue representimportant contributions and we now summarily review them.CONTENT OF THE SPECIAL ISSUE:Our first paper by Ingmar Björkman and Jon Lervik address a key issues in the IHRMliterature, namely the transfer of HRM policies and practices in MNCs. Theircontribution is grounded in recent debates around why there are differences betweenMNC subsidiaries in the extent to which they adopt HRM practices that MNCheadquarters attempt to diffuse world-wide. The paper draws on related research onsocial capital, knowledge transfer and change management and develops a model offactors influencing the transfer of HRM practices to MNCs units abroad. A maincontribution of the paper is to develop a more comprehensive and holisticunderstanding of the outcome of HRM practice transfer as encompassing threedimensions: implementation, internalisation and integration. This is significant asprevious research has mainly focuses on implementation in terms of surface adoptionof particular practices or comparisons of the extent to which local practices are similarto HQ practices.A second contribution of the paper is the development of current explanations of theprocess of transfer of HR practices to foreign units. Previous research on this question
has paid much attention to cultural and institutional differences. While the paperrecognises the importance of these factors, it is argued that the transfer of HRMpractices is a social process where organization-internal factors deserve moreattention. It is suggested that the governance mechanisms used by the MNC,characteristics of subsidiary HRM systems, the social relationship between thesubsidiary and MNC headquarters, and the transfer approach adopted by HQmanagement will all influence the outcome of the process. Finally, the paperhighlights a fruitful agenda for future research regarding the transfer of HRMpractices in MNCs through an approach integrating social capital, knowledge transferand change management.Our second paper by Sully Taylor highlights the critical role played by social capitalin the successful implementation of global strategy for MNCs , and in particular addsto our knowledge of the ways in which the international human resource managementsystem influences the creation and utilization of social capital in MNCs. The paperprovides a framework which is useful both for researchers and practitioners on how toapproach the cultural influences on the definitions and behavioural expressions ofsocial capital, and draws on this analysis to critically assess the recommendations thathave been made regarding developing social capital in MNCs. In addition the paperexamines what competencies are most critical in managers with the ability to developsocial capital in multiple cultural settings.The paper argues that while the development of social capital in MNCs is seen as akey task of IHRM, less attention has been paid to the diverse ways in which socialcapital is perceived and operationalised in different cultures. Recognising thatprevious research has not attended to the question of how developing social capitaldiffers across cultures, Taylor seeks to address this research gap by creating atheoretical framework to help understand how the IHRM function can help buildsocial capital in the complex global network economy. Finally, the paper recognisesthe growing importance of IHRM to the effective implementation of MNC strategyand the challenge of how to effectively manage the cultural and institutional diversityfacing the MNC.Our next contribution by Elaine Farndale and Japp Paauwe revisits some of thethemes explored in the first contribution. However Farndale and Paauwe focus on the
drivers behind the similarities and differences in IHRM practice. Specifically, thestudy seeks to examine the influence of both competitive and institutional drivers onthe adoption of HRM practices in MNCs using Paauwe’s ( 2004) contextually basedHR theory as a theoretical framework.Based on a world-wide sample of 14 high profile and high performing MNCs thestudy explored the ways in which different firms react to both institutional andcompetitive pressures in deciding their approach to HRM. The study found that at theglobal level, similarities are largely driven by external competitive factors (such as theadoption of universal “best” practices and benchmarking), and the availability of ICTsystems and tools. The paper suggests that similarities in approach at the nationallevel largely come from external institutional sources (e.g. legislation, national cultureand local expectations)In contrast, differences in approach between MNCs at both global and national levelare mainly influenced by internal competitive processes (e.g corporate strategy andcorporate culture). The authors conclude, external institutional and competitivedrivers are likely to lead to isomorphism, while internal drivers are more likely to leadto differentiation. Finally, the study suggested that MNCs face all three drivers ofHRM at the same time, leading to different patterns of practice adoption, adaptationand innovation.Our fourth paper by Majid Ghorbani and Rosalie Tung considers the role of womenin the labour market in a major Islamic country (Iran). This paper is significant aswhile there has been a considerable growth in research about women in the labourmarket and women in management in the western world, very little is known aboutthe position and role of women in the labour market in Islamic countries. The generalperception in the west is that in Islamic societies women’s participation in the labourmarket is marginal and that their career prospects are limited.Starting from this base, the authors highlights some of the myths and realities relatingto women in the labour market in a major Islamic country, through qualitativeresearch with Iranian women. The research shows that attitudes towards women in theworkplace have undergone considerable changes and are still evolving. Currently,women in Iran can work in most occupations of choice and appear to be fairly well
represented in the workplace in managerial and professional positions compared toother Islamic nations. This reality appears to run contrary to the popular perceptionthat women in these countries are fully veiled and prevented from active participationin society.Due to talent shortages women in Iran have been induced to return to the workforce,and in order to do this some of the benefits and status they enjoyed in the prerevolutionary era had to be restored highlighting the importance of human capitaldevelopment in Islamic as well as western countries. A key implication of the studyfor IHRM relates to Iran’s success in attracting foreign direct investment from a widevariety of countries and the recognition that as part of the government’s efforts toattract foreign investment, the climate for foreign women working there is becomingmore favourable. Also, more generally, the paper highlights the importance forwestern MNCs operating in Islamic countries to have an accurate understanding of therole of women in the workplace and also a good understanding of society’s attitudetoward women in these countries.Our final paper by Paula Caliguri and S* Colakoglu engages with expatriateassignment management, a topic which remains central to the IHRM literature despitea significant degree of study. However, while many models have examined thecontingencies between the stage of a firm’s internationalisation and correspondingexpatriate management practices, few empirical studies have examined thecontingencies between international management strategy of the MNCs and theirexpatriation policies. This exploratory paper seeks to begin to bridge this gap byexamining the congruence between MNCs’ strategies, categories of expatriateassignments used and expatriate management practices (selection, performancemanagement and repatriation)The authors’ exploratory study looks at how expatriate management practices differwith respect to local, centralised or global international strategies. A particular focusof the study, which draws on evidence from 27 MNCs, is the categories of expatriateassignments, the strategic integration of expatriate assignments into leadershipdevelopment, and the types of human resource practices firms use to manageexpatriates.
The results of the study increase our understanding of expatriate assignments as theyrelate to MNC international strategy. The empirical findings indicate thatorganizations differentially assign expatriates based on the firm’s respectiveinternational management strategy partially supports the contingency approach. Firmsadopting a global management strategy which made more use of developmentalassignments and had a stronger focus on leadership development through expatriation.Also, such firms tended to have a greater number of senior managers with expatriateexperience.Finally, the authors argue that despite the previous theoretical arguments proposingthat management strategies and expatriate strategies should be aligned, their studyfound no evidence for such an alignment among the firms participating in the studyand points to the need for both theoretical refinement and further empirical research inorder to more fully understand the nature of alignment in the international HRMcontext.
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accept vital international assignments and to facilitate international business travel (for a summary of the key HR issues see Collings et al., 2007). Changing Careers: A number of recent contributions to the IHRM field have noted the significance of the changing nature of careers for MNCs (see Collings et al., 2007; Dickmann and Harris, 2005; Stahl et al., 2002; Thomas et al., 2005). Key in .
