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International Human
Resource Management


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second edition

International Human
Resource Management

edited by

A n n e - Wi l H a r z i n g
J o r i s Va n R u y s s e v e l d t

SAGE Publications
London

l

Thousand Oaks

l

New Delhi


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© Anne-Wil Harzing and Joris van Ruysseveldt, 2004
First published 2004
Apart from any fair dealing for the purposes of research
or private study, or criticism or review, as permitted
under the Copyright, Designs and Patents Act, 1988, this
publication may be reproduced, stored or transmitted
in any form, or by any means, only with the prior
permission in writing of the publishers, or in the case of
reprographic reproduction, in accordance with the terms

of licences issued by the Copyright Licensing Agency.
Enquiries concerning reproduction outside those terms
should be sent to the publishers.
SAGE Publications Ltd
1 Olivers Yard
London EC1Y 1SP
SAGE Publications Inc
2455 Teller Road
Thousand Oaks, California 91320
SAGE Publications India Pvt Ltd
B-42, Panchsheel Enclave
Post Box 4109
New Delhi 100 017
British Library Cataloguing in Publication data
A catalogue record for this book is available
from the British Library
ISBN 0 7619 4039 1
ISBN 0 7619 4040 5 (pbk)

Library of Congress Control Number available

Typeset by C&M Digitals (P) Ltd., Chennai, India
Printed in Great Britain by The Cromwell Press Ltd, Trowbridge, Wiltshire


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Contents

Acknowledgements

vii

Foreword by Nancy J. Adler

viii

Contributor Biographies
Abbreviations
Introduction
PART 1

INTERNATIONALIZATION: CONTEXT, STRATEGY,
STRUCTURE AND PROCESSES

1

Internationalization and the international division of labour
Anne-Wil Harzing

2

Strategy and structure of multinational companies
Anne-Wil Harzing

3

International human resource management: recent developments
in theory and empirical research
Hugh Scullion and Jaap Paauwe

4

Human resource management in cross-border mergers and acquisitions
Günter K. Stahl, Vladimir Pucik, Paul Evans
and Mark E. Mendenhall

Part 2

HRM FROM A COMPARATIVE PERSPECTIVE

x
xvi
1

7
9

33

65

89

115

5

Cross-national differences in human resources and organization
Arndt Sorge

117

6

Culture in management: the measurement of differences
Laurence Romani

141

7

HRM in Europe
Christine Communal and Chris Brewster

167

8

HRM in East Asia
Ying Zhu and Malcolm Warner

195


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Page vi

Contents

9 HRM in developing countries
Terence Jackson
PART 3

MANAGING AN INTERNATIONAL STAFF

221

249

10

Composing an international staff
Anne-Wil Harzing

251

11

Training and development of international staff
Ibraiz Tarique and Paula Caligiuri

283

12

International compensation and performance management
Marilyn Fenwick

307

13

Repatriation and knowledge management
Mila Lazarova and Paula Caligiuri

333

14

Women’s role in international management
Hilary Harris

357

PART 4

15

16

INDUSTRIAL RELATIONS: A COMPARATIVE
AND INTERNATIONAL PERSPECTIVE

387

The transfer of employment practices across borders in
multinational companies
Tony Edwards

389

Varieties of capitalism, national industrial relations systems
and transnational challenges
Richard Hyman

411

17

Industrial relations in Europe: a multi-level system in the making?
Keith Sisson

433

18

The Eurocompany and European works councils
Paul Marginson

457

Author Index

482

Subject Index

490


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Acknowledgements

So much has changed since the 1st edition. We cannot even begin to encompass
the changes which have occurred in our now ‘globalized’ world. However, the
nature of academic work has also changed considerably since the 1st edition of
this book was published in 1995. Internet access and email have transformed
our daily working lives. Internet access means having information at our
fingertips. However, it also means an increasing challenge in assessing the
relevance of all this information. The contributors of this book have done an
excellent job in sifting the wheat from the chaff. The use of email has made it
much easier to communicate with authors. While for the 1st edition, much of
our editorial work was done via fax or even personal meetings with the chapter
authors, the current edition was based on email contact alone (a lot of it!). This
has made it possible to involve authors from a far wider range of countries than

before.
Much has stayed the same as well. First, our philosophy that the book be
developed as a research-based textbook has remained constant. The book
reflects the characteristics of the transnational MNC in that we think it combines the benefits of knowledge transfer (authors who are experts in their
field), integration (a coherent textbook) and local responsiveness (authors from
many different countries as well as chapters specific to Asia, Europe and Africa).
What never changes is the fact that for such an undertaking many people
deserve acknowledgements. First of all we would like to thank Arndt Sorge for
encouraging us to embark on a 2nd edition. If he had not spoken so convincingly about our duty to the field, this 2nd edition may never have materialized.
Second, we owe a big vote of thanks to our authors. Given the scale of the task
of coordinating the editing of 18 chapters from around the globe, Anne-Wil
would particularly like to acknowledge their wonderful responsiveness to the
repeated requests for text revision. Their cooperation in working within the
deadlines made the job so much easier. Anne-Wil’s research assistant, Sheila
Gowans, performed her job as proofreader with a perfect blend of commitment
and conscientiousness.
At Sage, Kiren Shoman was the first to believe in the book and convinced
the Sage board of the need for a 2nd edition. She was later joined by Keith Von
Tersch and together they made a perfect team. Seth Edwards then ensured that
the book moved through the production process smoothly, while Ben
Sherwood took care of the all important promotion of the book.
Anne-Wil Harzing
Joris Van Ruysseveldt


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Foreword by Nancy J. Adler1

Which is farther, the sun at sunrise or the sun at noon? The first sage argued,
‘At sunrise, of course, the sun is closest when it is largest.’ The second sage
vehemently disagreed, ‘No, at noon, of course! The sun is closest when it’s
warmest.’ Unable to resolve the dilemma, the two sages turned to
Confucius.com for help. Feeling the sun’s fading warmth as it lowered itself
into a blazing sunset, Confucius remained silent.2
Myth, misinformation, and silence have pervaded the field of international
human resource management (HRM) since its inception.3 Understanding the
dynamics of people in organizations has always been challenging. However,
never prior to the twenty-first century has the intensity of globalization interacted so profoundly with organizations and the people who lead them and
work in them. To understand the challenges of twenty-first century organizational efficacy is to address the myriad of dilemmas facing people who constantly work outside their native country with people from wider and wider
ranges of the world’s cultures.
Can we allow ourselves to continue to be guided by myth, misinformation,
and silence? No. Do we, as scholars, researchers, and executives, know how to
resolve the human dilemmas posed by extremely high levels of global interaction? No, not yet. Do we need to know? Yes. In International Human Resource
Management, the editors have brought together an eminent group of scholars
from around the world to report on state-of-the-art international HRM
research. Unlike Confucius, they have chosen not to remain silent in the face
of dilemmas that were heretofore unresolvable. They offer research results and
recommendations that can and should guide our scholarly and executive
appreciation of global diversity and its impact on human system functioning.
The book includes macro strategic perspectives along with micro individual-level

1

Nancy J. Adler is a professor of international management at McGill University, Montreal,
Canada.

2
Based on an ancient Chinese wisdom story as edited by Nancy J. Adler and Lew Yung-Chien
while artists in residence at the Banff Centre for the Arts, 2002.
3
For an in-depth discussion of the patterns of myths and errors undermining the field, see
A.W.K. Harzing’s ‘The Role of Culture in Entry Mode Studies: From Negligence to Myopia?’ in
Advances in International Management, Vol. 15, 2003, pp. 75–127; A.W.K. Harzing’s ‘Are Our
Referencing Errors Undermining our Scholarship and Credibility? The Case of Expatriate
Failure Rates,’ Journal of Organizational Behavior, Vol. 23, February, 2002, pp. 127–148; and
A.W.K Harzing’s ‘The Persistent Myth of High Expatriate Failure Rates,’ The International
Journal of Human Resource Management, May 1995, pp. 457–475.


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Foreword

ix

perspectives. It encompasses perspectives from Asia, Europe, and the Americas.
It takes in the point-of-view of management and labour. Whereas neither this
book nor any book can answer all our questions about people working globally,
International Human Resource Management goes a long way in separating myth
and misinformation from research-based fact. It fills some of the field’s silence
with perceptive dialogue. It is a book well worth reading.

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Contributor Biographies

Chris Brewster
Professor of International Human Resource Management at Henley
Management College, UK. He had substantial experience in trade unions,
Government, specialist journals, personnel management in construction and
air transport, and consultancy, before becoming an academic. Chris has consulted and taught on management programmes throughout the world and is a
frequent international conference speaker. He has conducted extensive
research in the field of international and comparative HRM; written some
dozen books and over a hundred articles. In 2002 Chris Brewster was awarded
the Georges Petitpas Memorial Award by the practitioner body, the World
Federation of Personnel Management Associations, in recognition of his outstanding contribution to international human resource management.
Paula Caligiuri
Director of the Center for Human Resource Strategy and an Associate Professor
of Human Resource Management at Rutgers University in the United States.
She researches, publishes, and consults in the area of international human
resource management – specifically on the topics of expatriate management,
women on global assignments, and global leadership. Her research on these topics has appeared in numerous journals and edited books. Dr Caligiuri is on the
editorial boards of Career Development International, Journal of Organizational
Behavior, Human Resources Planning Journal, and International Journal of Human
Resource Management and is an Associate Editor for Human Resource Management
Journal.
Christine Communal

Lecturer in International Management, Cranfield University, School of
Management, UK. Christine has the ability to enthuse people with her passion
for supporting individuals and organizations in the process of internationalization. She has developed a unique approach to personal, managerial and
organizational development, with a strong focus on intercultural awareness.
Her early work experience was in France and Germany and encompassed various industry sectors (petro-chemicals, mobile telephony and electricity distribution). She then moved to the UK to complete a Doctorate examining the
impact of national culture on managerial behaviour. Christine built on her
doctoral specialization to become the youngest Faculty member at Cranfield
School of Management, teaching on the MBA, Doctorate and Executive
programmes.


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Contributor Biographies

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Tony Edwards
Lecturer in Comparative Management at King’s College, London. His research is
in the area of employment relations in MNCs. One of the themes of this research
is the diffusion of employment practices across borders within MNCs, with a specific focus on the process of ‘reverse diffusion’ in which practices are diffused from
foreign subsidiaries back to the domestic operations of MNCs. Currently he is
working on two projects, one of which is concerned with the ‘country of origin’
effect in American MNCs in the UK, while the other is concerned with the management of employment relations following a cross-border merger or acquisition.
Paul Evans
The Shell Chaired Professor of Human Resources and Organizational

Development and Professor of Organizational Behaviour at INSEAD, where he
has led INSEAD’s activities in the field of human resource and organizational
management since the early 1980s. He is co-author of Must Success Cost So
Much?, a pioneering study on the professional and private lives of executives;
Human Resource Management in International Firms: Change, Globalization,
Innovation, and The Global Challenge: Frameworks for International Human
Resource Management. He has a degree in law from Cambridge University, an
INSEAD MBA, a Danish business diploma, and his PhD is from MIT.
Marilyn Fenwick
Senior Lecturer in the Department of Management at Monash University. She was
awarded her PhD on expatriate performance management by the University of
Melbourne. She has published journal articles and book chapters in the areas of
international human resource management and international management.
Marilyn convenes a special interest group in International HRM for the Australian
Human Resources Institute in Victoria. Her research interests concern: nonstandard and virtual international assignments; human resources development
and performance management in multinationals; strategic HRM in international
inter-organizational networks and international non-profit organizations.
Hilary Harris
Director of the Centre for Research into the Management of Expatriation
(CREME) at Cranfield School of Management. Dr Harris has had extensive
experience as an HR practitioner and has undertaken consultancy with a broad
range of organizations in the public and private sectors. Her specialist areas of
interest are International HRM, expatriate management, cross-cultural management and women in management. She teaches, consults and writes extensively in these areas. Hilary was one of the lead researchers on the CIPD
flagship research programme looking at the impact of globalization on the role
of the HR professional.
Anne-Wil Harzing
Associate Professor in the Department of Management at the University of
Melbourne. Her work on HQ-subsidiary relationships, staffing policies and

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international management has been published in journals such as Journal of
International Business Studies, Strategic Management Journal, Journal of Organizational Behavior and Organization Studies. She also published Managing the
Multinationals (Edward Elgar, 1999). Her current research interests include the
role of language in international business, the transfer of HRM practices across
borders, the interaction between language and culture in international
research, expatriates and knowledge transfer, and HQ-subsidiary relationships.
Richard Hyman
Professor of Industrial Relations at the London School of Economics and
Political Science (LSE) and is founding editor of the European Journal of
Industrial Relations. He has written extensively on the themes of industrial relations, collective bargaining, trade unionism, industrial conflict and labour market policy, and is author of a dozen books as well as numerous journal articles
and book chapters. His most recent book, Understanding European Trade
Unionism: Between Market, Class and Society, was published by Sage in 2001 and
is already widely cited by scholars working in this field.
Terence Jackson
Holds a bachelors degree in Social Anthropology, a masters in Education, and
a PhD in Management Psychology. He is Director of the Centre for Cross
Cultural Management Research at ESCP-EAP European School of Management
(Oxford-Paris-Berlin-Madrid). He edits, with Dr Zeynep Aycan, the International
Journal of Cross Cultural Management (Sage Publications) and has recently published his sixth book International HRM: A Cross Cultural Approach. He has published numerous articles on cross-cultural management ethics, management
learning and management in developing countries in such journals as Human

Resource Management, Human Relations, Journal of Management Studies, and Asian
Pacific Journal of Management. He is currently directing a major research project
on Management and Change in Sub-Saharan Africa.
Mila Lazarova
Recently joined the International Management Department of the Faculty of
Business Administration at Simon Fraser University in Canada. Mila’s primary
research interests are in the area of international human resource management
and, more specifically, management of global assignees. Her recent research has
been focused on issues related to retention upon repatriation and the changing
notions of international careers. She has also done research on other related
topics such as cross-cultural adjustment and the expatriate experience of
female assignees. Mila has published in the Journal of International Human
Resource Management and the Journal of World Business and her work has been
presented at conferences in North America and Europe.
Paul Marginson
Professor of Industrial Relations and Director of the Industrial Relations
Research Unit at Warwick Business School, University of Warwick. He has


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researched and published extensively on the management of employment

relations in MNCs and on the Europeanization of industrial relations. Major recent
projects include studies of the agreements establishing, and the practice and
impact of, European Works Councils; the industrial relations implications of
Economic and Monetary Union; and European dimensions to sector and company collective bargaining. A book with Keith Sisson – European Integration and
Industrial Relations: Multi-level Governance in the Making – is due to be published
by Palgrave-Macmillan in 2004.
Mark E. Mendenhall
Holds the J. Burton Frierson Chair of Excellence in Business Leadership at the
University of Tennessee, Chattanooga. He is past president of the International
Division of the Academy of Management, and has authored numerous journal articles in international human resource management. His most recent book is Developing
Global Business Leaders: Policies, Processes, and Innovations (Quorum Books).
Jaap Paauwe
(PhD, Erasmus University) is Professor of Business and Organization at the
Rotterdam School of Economics, Erasmus University Rotterdam. He has written and co-authored eleven books on human resource management and published numerous papers on HRM, industrial relations and organizational
change. Twice (1997 and 2001) he was in charge of the editing of a special issue
on HRM and Performance for the International Journal of HRM. He is research
fellow and coordinator for the research programme on ‘Organizing for
Performance’ of the Erasmus Research Institute for Management (ERIM). Fields
of interest include human resource management, industrial relations, organizational change, new organizational forms and corporate strategy.
Vladimir Pucik
Professor of International Human Resources and Strategy at IMD, Lausanne,
Switzerland. Born in Prague, he received his PhD in business administration
from Columbia University in New York and previously taught at Cornell
University and the University of Michigan. He also spent three years as a visiting scholar at Keio and Hitotsubashi University in Tokyo. Dr Pucik teaches regularly on executive development programmes in Europe, the US and Asia, and
has consulted and conducted workshops for major corporations worldwide. His
major works include The Global Challenge: Frameworks for International HRM,
Accelerating International Growth and Globalizing Management: Creating and Leading
the Competitive Organization.
Laurence Romani
Research Associate at the Institute of International Business (IIB) of the

Stockholm School of Economics (Sweden). She studied social anthropology
and sociology at the Sorbonne in Paris. Her research interests are in the field of
cross-cultural management. She is currently preparing her dissertation, which
focuses on quantitative studies of culture and management. She addresses their


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xiv C o n t r i b u t o r B i o g r a p h i e s

issues and limitations with the endeavour of improving the current theoretical
models. Her research is inspired by an interpretative approach.
Hugh Scullion
Professor of International HRM at Strathclyde University. He previously worked
at Nottingham and Warwick Business Schools. Hugh is a Visiting Professor at
the Business Schools of Toulouse and Grenoble and also at Limerick University.
He consults with leading international firms such as Rolls Royce and Bank of
Ireland. Hugh researches on international strategy and international HRM in
European multinationals and has developed a strong network of HR directors
in Europe. He has written several books and over fifty specialist articles in
International HRM. Hugh’s latest books are International HRM: A Critical Text
(Palgrave, 2004) and Global Staff ing (Routledge, 2004).
Keith Sisson
Head of Strategy Development at the UK’s Advisory, Conciliation and
Arbitration Service and Emeritus Professor of Industrial Relations in the
Warwick Business School’s Industrial Relations Research Unit (IRRU), having

previously been its Director. In recent years, he has been extensively involved
in cross-national comparative research involving projects funded by the UK’s
Economic and Science Research Council and the European Foundation for the
Improvement of Living and Working Conditions, including those on the role
of direct participation in organizational change, the impact of EMU and the
handling of restructuring. A book with Paul Marginson summarising many of
the results of this work (European Integration and Industrial Relations: Multi-level
Governance in the Making) is due to be published by Palgrave in 2004.
Günter K. Stahl
Assistant Professor of Asian Business and Comparative Management at INSEAD.
Prior to joining INSEAD, he was Assistant Professor of Leadership and Human
Resource Management at the University of Bayreuth, Germany. He also held visiting positions at the Fuqua School of Business and the Wharton School of the
University of Pennsylvania. Günter has (co-) authored several books as well as
numerous journal articles in the areas of leadership and leadership development,
cross-cultural management, and international human resource management. His
current research interests also include international careers, trust within and
between organizations, and the management of mergers and acquisitions.
Arndt Sorge
Professor of Organization Studies at the Faculty of Management and
Organization, University of Groningen, The Netherlands. He has mainly
worked in international comparisons of work, organization, human resources,
technical change and industrial relations. This has implied uninterrupted expatriation through a succession of positions at several universities and research
institutes in Germany, his native country, The Netherlands, Britain and France.
Next to writing more specialist publications, based on field research in three


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different societal contexts, he has also edited standard Organization volumes
in the series of the International Encyclopedia of Management and Organization,
most recently Organization (London: Thomson Learning, 2002), and he was
formerly editor-in-chief of Organization Studies.
Ibraiz Tarique
PhD Candidate at the School of Management and Labor Relations, Rutgers
University, New Jersey, USA. His research interests include human resource
management issues in cross-border alliances and training and development
issues in transnational enterprises. His teaching interests include strategic
human resource management, international human resource management,
and developing human capital. His research has been presented at the Annual
Academy of Management Meetings and at the Society of Industrial and
Organizational Psychologist Conferences and has been published in the
International Journal of Human Resource Management.
Joris Van Ruysseveldt
Associate Professor at the Open University of The Netherlands. He studied
Sociology at The Catholic University of Leuven. His dissertation (2000) focused
on collective bargaining structures in Belgium and The Netherlands. As research
manager at the Higher Institute of Labour Studies (University of Leuven), he
conducted research on topics like quality of working life, European works
councils, organizational learning and teamwork. He presently develops courses
in the field of human resource management. He has published articles and
books on industrial relations in Europe, comparative employment relations,
quality of working life and sociology of work.

Malcolm Warner
Professor and Fellow, Wolfson College and Judge Institute of Management,
University of Cambridge. He is the Editor of the International Encyclopedia of Business
and Management (London: Thomson, 6 volumes, 1996; second edition, 8 volumes,
2002) and Co-Editor of the Asia-Pacific Business Review. Professor Warner has written
and edited over 25 books and over 200 articles on management. His most recent
book, Culture and Management in Asia, is published by Routledge Curzon, 2003.
Ying Zhu
Senior Lecturer in the Department of Management, the University of
Melbourne. He graduated from International Economics Department at Peking
University and worked as an economist in the Shenzhen Special Economic
Zone in China. He completed his PhD at The University of Melbourne in 1992.
He was invited to be a visiting scholar at International Labour Organization in
Geneva in 1997. His research interests are international human resource management, industrial development and employment relations in East Asia,
including China, Japan, Korea, Taiwan and Vietnam. He has published a number of books and journal articles covering Asian economies, labour, industry
and human resource management.


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Abbreviations

APEC
CCC
CCP
CCT

CEE
CFL
COEs
CSAs
DPEs
ECB
EEA
EEC
EMU
ETUC
EU
EWC
FDI
FOEs
FSAs
HCN
HQ
HR
HRD
HRM
IHRM
IR
JVs
KMT
LDCs
LEs
M&A
MNCs
MOL
NAFTA

OJT
PCN
PRC
QCC

Asia Pacific Economic Cooperation
Chinese Culture Connection
Chinese Communist Party
Cross-Cultural Training
Central and Eastern Europe
Chinese Federation of Labour (Taiwan)
Collective-owned Enterprises
Country-specific Advantages
Domestic Private Enterprises
European Central Bank
European Economic Area
European Economic Community
Economic and Monetary Union
European Trade Union Confederation
European Union
European Works Council
Foreign Direct Investment
Foreign-owned Enterprises
Firm-specific Advantages
Host Country National
Headquarters
Human Resources
Human Resource Development
Human Resource Management
International Human Resource Management

Industrial Relations
Joint Ventures
Kumintang (Nationalist Party in Taiwan)
Less Developed Countries
Large-sized Enterprises
Mergers and Acquisitions
Multinational Corporations
Ministry of Labour (Japan)
North American Free Trade Agreement
on the job training
Parent Country National
People’s Republic of China
Quality Control Circles


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Page xvii

Abbreviations

SHRM
SIRHM
SMEs
SOEs
TCN
TQM
UNICE

VFTU
WTO

Strategic Human Resource Management
Strategic International Human Resource Management
Small- and Medium-sized Enterprises
State-owned Enterprises
Third Country National
Total Quality Management
Union of Industrial and Employers’ Confederations of Europe
Vietnam Federation of Trade Unions
World Trade Organization

xvii


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Introduction

WHAT MAKES THIS BOOK DIFFERENT?

This book provides a comprehensive, research-based, integrated and international
perspective of the consequences of internationalization for the management of
people across borders. The book’s comprehensiveness is evidenced by its wide
coverage. Although we will pay due attention to expatriate management in this
book, we will also look at the role of HRM in internationalization, the link
between strategy, structure and HRM in multinational companies (MNCs) and
the role of HRM in mergers and acquisitions. In addition, a discussion of
comparative HRM, which focuses on the extent to which HRM differs between
countries and the underlying reasons for these differences, will form a major
part of this book. Finally, the book offers a detailed treatment of the collective
aspects of the employment relation by looking at industrial relations from an
international and comparative perspective.
A second distinctive feature of this book is its solid research base. All chapters
have been specifically commissioned for this book and all authors are experts
and active researchers in their respective fields. Rather than having a final
chapter with ‘recent developments and challenges in IHRM’, we have given all
authors the clear brief to supplement classic theories and models with cuttingedge research and developments. The chapter on cross-cultural training for
instance includes a discussion on recent development in electronic CCT and in
many chapters over two thirds of the references are less than five years old.
Although the book consists of 18 chapters written by a total of 23 authors,
it has been very carefully edited to provide an integrated perspective. Even
though the book is research-based, it is not a disparate collection of research
essays. All chapters are part of a carefully constructed framework and together
provide a coherent picture of the field of International HRM.
A fourth and final distinctive characteristic of this book is that it is truly
international, both in its outlook and in its author base. Authors use examples

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International Human Resource Management

from all over the world and their research base extends beyond the traditional
American research literature. Although many authors are currently working at
American or British universities, virtually all have extensive international
experience and their countries of origin include: the Netherlands (2 authors),
France (2 authors), Germany (2 authors), Bulgaria, Slovakia, Pakistan, Australia
and China.

WHO IS THIS BOOK FOR?

As a textbook this book will appeal to advanced undergraduate students and
Master’s students wanting a comprehensive and integrated treatment of
International HRM that includes the most recent theoretical developments. As
a research book, it provides PhD students and other researchers with a very
good introduction to the field and an extensive list of references that will allow
them to get an up-to-date overview of the area. Finally, practitioners looking
for solutions to their international HR problems might find some useful frameworks in Parts 1 and 3, while the chapters in Parts 2 and 4 will allow them to
get a better understanding of country differences in managing people.

WHAT IS NEW IN THE 2ND EDITION?

The underlying philosophy of this book – presenting a comprehensive,
research-based, integrated and international perspective on managing people
across borders – has not changed. However, the 2nd edition has reinforced
these four characteristics in the following ways:

• Since several reviewers commented that the comparative aspect of the
1st edition left room for improvement, Part 2 of the book has been
completely revised and the current edition includes three new chapters
on comparative HRM, covering Europe, Asia and developing countries.
Two new chapters on the role of HRM in mergers and acquisitions in
Part 1 and on repatriation in Part 3 reflect the increasing importance of
these phenomena. Part 4 features a new chapter on transfer of employment practices across borders, as well as a revised treatment of the most
important aspects of industrial relations.
• The research base has been further reinforced by attracting new authors
who are experts and active researchers in their field. This means that


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Introduction

3

most chapters have been written from scratch, while the remaining
chapters (Chapters 1, 5 and 14) have been updated. In doing so, the

authors have focused even more strongly on theoretical models and
frameworks, cutting down on factual information that can easily be
retrieved from other sources, including other textbooks.
• The integrated perspective has been strengthened by even more careful
editing. Most authors went through three versions of their chapters and
many read chapters of other authors in order to avoid overlap and conflicting evidence. Links have been provided between chapters to further
clarify the overall structure of the book, and in order to help instructors,
discussion questions and suggestions for further reading are now provided with each chapter.
• The book has moved from a predominantly Dutch author base in the 1st
edition to a truly international group of authors, coming from or working
in more than ten different countries, in this edition. The book has maintained its distinctive European focus (especially in Part 4), but with new
chapters on Asia and developing countries and new authors from the
US, China and Australia, it has now reached out to other areas of the
world as well.

WHAT IS INCLUDED IN THIS BOOK?

This book consists of four clearly delineated parts. Each part can be studied as
an independent unit, so that readers may choose to study the parts most interesting to them, if they so desire. Taken together, however, the four parts
present a consistent picture of the way in which international HRM can be
approached as a discipline.
In Part 1 (Internationalization: Context, Strategy, Structure and Processes)
we first place International HRM in a wider context. Chapter 1 touches upon
recent developments in the field of internationalization and offers various theoretical models which explain the existence of international trade and multinational companies. We also look at the social consequences of the increasing
internationalization of the global economy. Chapter 2 then discusses the
different options that MNCs have in terms of strategy and structure in some
detail and shows that these can be combined into a typology of MNCs that
stands up to empirical verification. We also provide a preview of the link between
strategy, structure and HRM, an issue that is further explored in Chapter 3. That
chapter also traces the development of IHRM as a research field and examines the

role of the corporate HR function in the international firm, global management
development and the roles and responsibilities of transnational managers.


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International Human Resource Management

Finally, Chapter 4 focuses on integration processes in cross-border mergers and
acquisitions (M&A), examining the potentially critical role that cultural differences
and human resources play in the M&A process. It also systematically reviews the
key HRM challenges at different stages in the M&A process.
Part 2 (HRM from a Comparative Perspective) starts with two chapters
offering two different approaches – institutionalist and culturalist – to explain
differences in human resource management across borders. Chapter 5 introduces these two approaches and explains the way in which comparative
research differs between them. The chapter then reviews the institutionalist
approach in some detail before proposing a framework – termed societal
analysis – to integrate the two approaches. Chapter 6 then focuses on the study
of cultural differences across countries that influence people in a work environment. It presents the achieved knowledge on cultural dimensions which helps
understanding and managing people from different cultural backgrounds and
reviews three major and distinctive contributions to this debate. Subsequently,
Chapters 7 to 9 discuss how HRM practices differ across countries by focusing
respectively on Europe, Asia and developing countries. All three chapters come
to the conclusion that there are no ‘one-size-fits-all best HRM practices’ and

that Anglo-American HRM models need to be adapted to be effective in other
countries. The focus in these chapters is on acquiring an analytical
understanding of cross-national differences, since any factual description of
such differences would soon be out of date.
In Part 3 (Managing an International Staff) we return to the perspective of
the MNC and discuss the issues that an international HR manager encounters
in managing people across borders. Although this part of the book has a clear
focus on the management of expatriates, many chapters explicitly broaden
their scope to include all managerial personnel. First, Chapter 10 discusses the
challenges associated with building an international workforce. It reviews
different staffing policies and the factors influencing the choice between host
country and parent country nationals as well as the underlying motives for
international transfers. It also covers recruitment and selection issues and
expatriate adjustment and failure. Chapter 11 looks at the preparation of expatriates
for their international assignments and proposes a systematic five-phase
process for designing effective cross-cultural training programmes. Chapter 12
then deals with the compensation and performance management of staff in
MNCs. It reviews the variables influencing international compensation strategy;
options for compensating staff on international transfer within MNCs; and
problems and enduring issues associated with international compensation and
integrated performance management. Chapter 13 then closes the international
transfer cycle with a look at the challenges associated with repatriation following global assignments from both an individual and an organizational point of
view. Finally, Chapter 14 looks at the role of women in international management, taking into account individual, organizational and socio-cultural
perspectives.


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The fourth and final part of this book (Industrial Relations: a Comparative
and International Perspective) looks at the collective aspects of the employment relationship. First, Chapter 15 links back to Chapters 2 and 3 by
discussing the transfer of HR practices – or more generally employment practices as they are called in this chapter – within MNCs. It provides explanations
for variations between MNCs in terms of the extent of transfer and a discussion
of the likely nature of the relations between different groups within MNCs in
the transfer process. Chapter 16 then draws on the recent literature on ‘varieties of capitalism’ to show that national economies can be structured in many
different ways, and that these differences are associated with different industrial relations systems. It also disentangles the challenges inherent in globalization, and considers whether they imply convergence towards a more
market-driven model, or whether distinctive forms of social regulation are
likely to persist. In Chapter 17, we take this analysis of convergence and divergence one step further by moving to the regional level of analysis and reflecting
about the prospects for the ‘Europeanization’ of industrial relations. In the
final chapter of this book – Chapter 18 – we take our analysis back to the
company level by examining the relevance of the concept of the Eurocompany
and the role of European Works Councils within European industrial relations.


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