International Human Resource Management: The Globalization Of Business

The word has been changing rapidly because liberalization, globalization and technology advancement has been coming along. The importance of human resource management has also been brought to the center of attention by the advent of globalization these days. The basic aim of human resource management is to deploy best human resources in order to maintain and sustain the quality across the culture and meet the needs of customers at both domestic and global level. Utilization of human resources has become vital for the competitive advantage of the organizations. For the improvement of production and functional efficiency organizations need to bring in the best human resources because it is the basic task of an effective human resource management.

It is also defined as the policies, strategies and practices of HRM followed by the firms that is operating globally. Globalization is the process of integrating markets, multinational companies investing in new foreign markets and integration of operation for producing goods and services across border. Profit maximization can also be achieved by applying the distinctive competencies of MNCs into foreign markets in order to compete globally and earn competitive advantage. The potential of human resource management is rapidly explored by organizations these days because of leveraging human resources to compete in foreign markets. With the help of this, HR policies and practices concerning global and local recruitment, learning and development internationally, reward and compensation and performance appraisal have been addressed (Farnham,

The HR activities includes acquiring, allocating and utilizing human resources which fulfills the general activities of HRM i.e. planning of HR, hiring of employees, training and development, compensation and performance management. The type of countries covered in IHRM activities are the host country nationals, home country and other country. The host country where subsidiary is located, home country is the one where the headquarters or head office of the organization is present and other countries include sources for labor and finance. Types of employees for and international business are defined as parent country nationals (PCNs), Host Country Nationals (HCNs) and Third Country Nationals (TCNs) (Sinha and Sinha, 2008). The basic purpose or the objective of IHRM to let the organization and multinational companies compete and achieve success globally. Being efficient, being responsive at local levels, being flexible, achieve competitive advantage throughout the world and able to transfer the knowledge and understanding globally (De SaaPerez and Garcia-Falcon, 2002). According to Farnham (2005), the process through which the function of HRM contributes to the process of globalization. It has also been explained that management of human resource activities such as recruitment, development and learning and the employee compensation and integration of activities in order to