1. International Human Resource Management
IHRM Chapter 3
International Human Resource Management
Managing people in a multinational context
The context of cross-border alliances and SMEs

2. Chapter Objectives We learn about:
Global perspective on IHRM with external partners
Cross-border alliances
Equity-based alliances (M&As, IJVs)
Globalizing SMEs
IHRM Chapter 3

3. Terms pre-M&A due diligence integration planning M&A IJV
SME
non-equity cross-border alliance
equity modes
merger
acquisition
born globals
boundary spanning positions
pre-M&A
due diligence
integration planning
implementation planning
resources
processes
values
M&A
IJV
UNCTAD
TNC
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4. Equity and non-equity modes of foreign operation
Figure 3-1
Equity and non-equity modes of foreign operation
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5. The formation processes of M&As and HR challenges
Figure 3-2
The formation processes of M&As and HR challenges
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6. Mergers and acquisitions in US billions
Figure 3-3
Mergers and acquisitions in US billions
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7. Typical cross-border M&A problems
Within first year of merger, up to 20% of executives may be lost. Over a longer time frame, this tends to increase even further.
Personnel issues are often neglected.
A high number of M&As fail or do not produce the intended results.
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8. Impact of the human integration and task acquisition on acquisition outcome
Figure 3-4
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9. HR activities in the phases of a cross-border M&A
Figure 3-5
HR activities in the phases of a cross-border M&A
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10. Post-acquisition trends in HRM practices
Table 3-1
Post-acquisition trends in HRM practices
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11. Formation of an international equity joint venture
Figure 3-6
Formation of an international equity joint venture
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12. The main reasons for engaging in an IJV
To gain knowledge and to transfer that knowledge
Host government insistence
Increased economies of scale
To gain local knowledge
To obtain vital raw materials
To spread the risks (e.g. share financial risks)
To improve competitive advantage in the face of increasing global competition
Provide a cost effective and efficient response forced by the globalization of markets
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13. IJV development stages and HR implications
Figure 3-7
IJV development stages and HR implications
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14. Table 3-2
SME definition
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15. Top 10 barriers to international markets by SMEs
Shortage of working capital to finance exports.
Identifying foreign business opportunities.
Limited information to locate/analyze markets.
Inability to contact potential overseas customers.
Obtaining reliable foreign representation.
Lack of managerial time to deal with internationalization.
Inadequate quantity of and/or untrained personnel for internationalization.
Difficulty in managing competitor’s prices.
Lack of home government assistance/incentives.
Excessive transportation/insurance costs. 1. 2. 3. 4. 5. 6. 7. 8. 9.
10.
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16. SME employer image and internationalization
Figure 3-8
SME employer image and internationalization
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17. Learning in small organizations
Figure 3-9
Learning in small organizations
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18. Discussion Questions
Describe the formation process of cross-border mergers, acquisitions and international joint ventures. What are the major differences?
Describe the development phases of an M&A and the respective HR implications.
Outline the development phases of an IJV and the respective HR implications.
In which ways do cultural and institutional differences impact the HR integration in M&As and in IJVs?
What are the barriers to internationalization for SMEs?
What are some of the typical challenges for HRM in internationalized SMEs?
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