5os04 people management in an international context helps people management practitioners working in international settings understand the key complexities involved. You will explore the main factors that affect managing people across different countries and assess why organisations employ people internationally, including the benefits this can bring.
You will also learn about convergent and divergent approaches to people policies and practices, and what to consider when selecting and resourcing staff for international roles. This includes common challenges, cultural differences, and how these influence decisions and outcomes. Finally, you will evaluate why organisations use expatriates, and how to create effective policies and processes for selecting, preparing, supporting, and repatriating employees who work overseas.
Table of Contents
Learning Outcome 1 – Understand People Practice From an International Perspective
AC 1.1 Examine the contextual factors of an international organisation.
International organisations operate within complex, multi-layered environments that differ significantly from domestic contexts. Understanding the contextual factors that shape these environments is essential for effective people management strategy and practice. These factors can be systematically examined using established analytical frameworks.
Political and Legal Factors
The political environment encompasses government stability, regulatory frameworks, employment legislation, and geopolitical relationships. International organisations must navigate diverse legal systems governing employment contracts, working time, dismissal procedures, collective bargaining rights, and data protection. For example, employment-at-will provisions common in the United States contrast sharply with the extensive dismissal protections prevalent in many European Union member states. Edwards and Rees (2023) note that multinational enterprises (MNEs) must balance the desire for consistent global policies with the legal necessity of local compliance. Political instability, corruption levels, and trade policy changes, such as Brexit’s impact on UK-EU workforce mobility, create additional complexity. The CIPD (2024) emphasises that people professionals in international contexts must develop strong relationships with local legal advisors and maintain current knowledge of regulatory developments across all operating jurisdictions.
Economic Factors
Economic contextual factors include labour market conditions, wage levels, inflation rates, currency fluctuations, and economic development stages. Labour markets vary dramatically in terms of skill availability, unemployment rates, and competition for talent. Wage differentials between countries create both opportunities, such as cost arbitrage through offshoring, and challenges, such as managing pay equity perceptions across borders. Brewster, Mayrhofer, and Farndale (2024) observe that economic volatility, exemplified by the global inflationary pressures following the COVID-19 pandemic and the energy crisis, requires international organisations to build flexibility into reward strategies and workforce planning. Exchange rate movements can significantly affect the real cost of expatriate compensation packages and the relative attractiveness of different locations for investment.
Socio-Cultural Factors
Cultural dimensions profoundly influence workplace expectations, communication styles, leadership preferences, and employee motivation. Hofstede’s cultural dimensions framework, while subject to critique, remains widely used to understand variations in power distance, individualism versus collectivism, uncertainty avoidance, and long-term orientation across national cultures (Hofstede Insights, 2024). For instance, high power distance cultures may expect more hierarchical management styles, while collectivist cultures may prioritise group harmony over individual recognition. Meyer (2024) extends this analysis through the Culture Map framework, which examines dimensions including communication style (low-context versus high-context), feedback directness, and attitudes to time. Socio-cultural factors also encompass religious practices affecting working patterns, gender role expectations, and attitudes towards diversity and inclusion. People professionals must develop cultural intelligence to navigate these differences effectively without resorting to stereotyping.
Technological Factors
Technological infrastructure varies considerably across countries, affecting the feasibility of digital HR systems, remote working arrangements, and technology-enabled learning. While some markets have advanced digital infrastructure enabling seamless virtual collaboration, others face limitations in internet reliability, bandwidth, and device availability. The acceleration of digital transformation following the pandemic has heightened the importance of technology readiness assessments when establishing operations in new markets. Simultaneously, advances in HR technology, including global HRIS platforms, AI-powered talent analytics, and virtual collaboration tools, are enabling greater integration of international people practices while raising questions about data sovereignty and cross-border data transfers (CIPD, 2024).
