In the era of globalization business organizations do not confine themselves in one
country .In order to explore new markets and opportunities, organizations expand
their international operations. In managing subsidiaries across different countries, the
approach to marketing, finance, operations, production and above all human resource
management functions has to be tailored according to the local environment where the
subsidiary has to operate. Organizations are not strategy, structures or systems rather
they are about people. In order to survive and grow in international markets
organizations adapt their HRM practices for successful execution of strategies.
International human resource management is defined as ‘the human resource
management issues and problems arising from internationalization of business, and
the human resource management strategies, policies and practices which firm pursue
in response to the internationalization of business’ (Scullion 1995). The field of
international human resource management has been a focus of all business
organizations and its importance will grow in the years to come. Multinational
Companies (MNC’S) use three types of strategies for transfer of HR practices across
different nations; Ethnocentric strategy uses same HR practices of parent company in
host nations, Polycentric strategy employ local people as workforce and adapts the
HR practices of host nation, Geocentric strategy only focuses on skills of the
employee and adopts HR practices which are most effective and efficient irrespective
of the nationality. All strategies have their pros and cons, they are applied as per the
type of business, the strategy of the organization, the leadership, and the past
experiences of the organization regarding different strategies. The international
organizations can use culturally sensitive and adaptive HRM practices for creating
competitive advantage in overseas operations. In attempt to explore new markets and
opportunities multinational companies are adapting to HRM practices across different
borders.