Internationalization and Globalization in Human Resource Management

The concept of internationalization can be defined in many ways. According to a typical definition, this is a process through which the international presence of a company increases, while a local company extends its activities to foreign markets, and establishes new units in other countries that increases its ability to produce added value (Galbraith, 2000). In order for a company manufacturing solely for the local market to be a global corporation acting on a worldwide scale it has to go through several stages of development. Generally, the globalization of a company is a longer procedure. The socalled globally born companies can enter into foreign markets even if they did not have significant domestic sales activities, and did not go through the above mentioned process. Such companies try to organize the available resources and their sales in a way that instantly provides competitive advantage through their activities extended to various countries. For these companies domestic market is not that important. For them the whole world is one single market, they do not bind themselves to one country alone. A prerequisite of competitiveness is that companies should be present on a market not just through their products, but also directly (eg. with their own company or with a joint venture). However, this situation has significantly increased the headcount employed by foreign subsidiaries. Today in most multinational companies the number of employees working abroad exceeds the number of those working in the parent country to a great extent. Besides dealing with expatriates, these companies have to take even more care of the various places, and the regional and global aspects of human resource management. Human resource management (HRM) in this article is a group of functions mutually building on each other that enable the efficient utilization of human resources, with both the personal and the organizational objectives taken into consideration (Karoliny et al 2003). In this article we give an overview on the basics of international human resource management (IHRM), its typical orientations, the factors differentiating between Hungarian and international human resource management, and also on specific IHRM trends.