2. Literature Review
Different views on HRM and IHRM
So what is IHRM? Shen 2005: 83-102 explains it in terms of a system: “An IHRM
system is a set of distinct activities, functions and processes that are directed at
attracting, developing and maintaining the human resources of a MNC.” The
domestic based term of HRM covers “all the concepts, strategies, policies and
practices which organisations use to manage and develop the people who work
for them” Rudman, 2007: 4. According to literature, the major difference between
the two terms is the fact that one relates to MNCs as opposed to domestic based
firms. So in the last two decades there has been a move from personnel
management PM to HRM and recently to IHRM. More than a decade ago Lundy
1994:691 stated that the PM role lacked strategic relevance because it was
mainly an administrative type role. Whereas the modern concept of HRM is much
more ‘hands on’ with employees. Lundy 1994: 693 stated further that HRM came
about due to a “change in the functions, boundaries, substance and objectives”
of the original PM function.