Internationalhuman resourcemanagement: …

1 March fromtheDepartmentof HumanResourceManagement,SchoolofManageme ntandLabor Relations,94 RockafellerRoad,Rm 202,Piscataway,NJ08854, S. BudhwarisfromCardiffBusinessSchool,Colum Drive,Cardiff CF13EU, fromtheUniversity of Pittsburgh,KatzSchoolof Business,Pittsburgh, PA 15260, ,108 Cowley Road, Oxford OX41JF, UK and 350 Main Street,Malden, MA 02148, USAI nternational humanresource management :review and critiqueRandall S. Schuler, Pawan S. Budhwar andGary W. FlorkowskiThe research agenda for the field of international human resource management (IHRM) isclear.

2 For a better understanding and to benefit substantially, management scholars muststudyIHRM incontext(Jackson, , in the context of organizations and their Review ofPsychology,46:237^264; Geringer, , Frayne, and Milliman, 2002. In search of`best practices' in international human resource management : research design resource management , forthcoming). IHRM should be studiedwithin the context of changing economic and business conditions. The dynamics of boththe local/regional and international /global business context in which the firm operatesshould be given serious consideration.

3 Further, it could be beneficial to study IHRM withinthe context of the industry and the firm's strategy and its other functional areas andoperations. In taking these perspectives, one needs to use multiple levels of analysis whenstudying IHRM: the external social, political, cultural and economic environment; theindustry, the firm, the sub-unit, the group, and the individual. Research in contextualisolation is misleading: it fails to advance understanding in any significant way (Adler, , management in international : de Gruyter; Locke, R.)

4 AndThelen, K. 1995. Apples and oranges revisited: contextualized comparisons and the studyof comparative labor & Society,23, 337--367). In this paper, we attempt toreview the existing state of academic work in IHRM and illustrate how it incorporates thecontent and how it might be expanded to do human resource management (IHRM) is about the world-wide managementof human resources ( Adler and Ghadar1990; Brewster 2002; Cascio and Bailey 1995;Harris and Brewster 1999; Poole 1999;Punnett and Ricks 1992; Tung 1984).

5 Thepurpose of IHRM is to enable the firm, themultinational enterprise (MNE), to besuccessful globally. This entails being: (a)competitive throughout the world; (b) international Journal of management Reviews Volume 4 Issue 1 pp. 41 7041efficient;(c)locallyresponsive;(d)fl exibleandadaptablewithintheshortestoftim eperiods;and(e) ,andthemagnitudeoftherealityisindisputab le:forexample,asubstantialmajorityofindu striesintheworldareunderfull-scaleattack byglobalcompetitors(BartlettandGhoshal19 98).Ontheotherhand,mostoftheemergingmark etsarenowbombardedbyforeigndirectinvestm ents(FDIs)andbytheMNEsofdevelopednations (UNCTAD1999).

6 IHRM formanyfirmsislikelytobecriticaltotheirs uccess, ,forreasonsofcost,timeanddifficulty, ,including:(1)developingmodelsandframewo rkstoreflectthecomplexsetofenvironmental factorsthatimpingeupontheglobalmanagemen tofhumanresources(AdlerandGhadar1990;Bre wster1995;BudhwarandDebrah2001;LockeandT helen1995;Shenkar1995;SparrowandHiltrop1 997);(2)researchinginternationalhumanres ourceactivitiesinawaythatrecognizestheir systematicinteraction(Begin1997; ;PunnettandRicks1992);and(3)utilizingmor etheoreticalperspectivestopredictandexpl ainrelationships(BlackandMendenhall1990; DeCieriandDowling1999; ; ; ).

7 Inthispaper,wereviewwhatisbeingdoneinthe IHRM field(SchulerandFlorkowski1998). , (1993);itdrawsonSundaramandBlack s(1992,733)definitionofaMNEas:anyenterpr isethatcarriesouttransactionsinorbetween twosovereignentities,operatingunderasyst emofdecisionmakingthatpermitsinfluenceov erresourcesandcapabilities, ( ;BartlettandGhoshal1992,1998; ; ; ).AconsequenceofthisformostMNEsisahumanr esourcedepartmentthatdevelopsandadminist ersthefollowingpoliciesandpracticesbutac rossawidevarietyofnations,eachwithitsown social,cultural,legal,economic,political andhistoricalcharacteristics(Morgan1986) :Humanresourceplanning;staffing;performa nceevaluation;traininganddevelopment;com pensationandbenefits; ,evenalargeonesuchastheUSAorEurope( ;BuckleyandCasson1998).

8 Formanymultinationals, ,theyaresupersededbytheneedtomanagegloba lly,Internationalhumanresourcemanagement :reviewandcritiqueflBlackwellPublishersL td200242asiftheworldwereonevastmarket,an dsimultaneouslytomanagelocally,asifthewo rldwereavastnumberofseparateandlooselyco nnectedmarkets(BarlettandGhoshal1998;Cal igiuriandStroh1995;Merchant2000).Bartlet tandGhoshal s(1998)basicpremiseisthatMNEsarerepresen tedbyunitsthatneedtobeco-ordinatedorinte gratedinsomeformandtosomedegree, ,MNEsarefirmsthatneedtobeglobalandlocal( multidomestic) ,however,needtoachievedifferentlevelsofg lobalnessandlocalness(HamelandPrahalad19 86).

9 Therearevaryingwaystoattainsuchlevels( ;Wells1998).Simultaneousconcernsforbeing global,transferringlearning,andbeingmult idomestic(therebyfacilitatinglocalsensit ivity)generateimportantissuesrelevanttoI HRM(Brewster2002).Forexample,canMNEslink theirgloballydispersedunitsthroughhumanr esourcepoliciesandpractices?HowdoMNEsfac ilitateamultidomesticresponsethatissimul taneouslyconsistentwiththeneedforglobalc o-ordinationandthetransferoflearningandi nnovationacrossunitsthroughhumanresource policiesandpractices?Thegrowingimportanc eofMNEsanduseofcomplexglobalstrategicbus inessdecisionshavegeneratedasimilarpheno menonintheareaofIHRM, (GalbraithandKazanjian1986;WrightandSnel l1998).

10 Thus,amorestrategicperspectiveofIHRM hasdeveloped( ;BartlettandGhoshal1992;SchulerandJackso n1999; ; ).Furtherreasonsforthedevelopmentofamore strategicperspectiveofIHRM includetherecognitionthat:(a)HRMatanylev elisimportanttostrategyimplementation( ;SchulerandJackson2001;WrightandSnell199 8);(b)majorstrategiccomponentsofMNEshave asignificantinfluenceoninternationalmana gementissues,functions,policies,andpract ices(EdstromandGalbraith1977; );(c)manyofthesecharacteristicsofIHRM caninfluencetheattainmentoftheconcernsan dgoalsofMNEs(Kobrin1992);and(d)awidevari etyoffactorsmaketherelationshipbetweenMN EsandIHRM complex,therebymakingthestudyofIHRM challengingaswellasimportant(Bartlettand Ghoshal1998,2000; ;OddouandDerr1999).