Internationalisation of firms is another challenge of Human Resource Management in a global context. A typical definition of internationalisation, according to Galbraith (2000, in Poor, 2005) is that, it is a process through which a firm increases its international presence, while a local firm spreads its activities abroad (foreign markets) and starts new units abroad which increase its ability to yield added value. More and more Cyprus-based firms are operating their business in other countries.

A company that seeks to act on a worldwide basis and not merely produce for the local market, is obliged to get through a number of stages of development. The company can enter into foreign markets even if it has low domestic sales and even if it didn’t get through the above mentioned procedure. This kind of companies try to organize their resources and sales in order to have competitive advantage through their activities which are extended abroad.
These firms are not interested for the domestic market, since they consider that the whole world is one single market. Competitiveness requires that firms should be present on a market directly not just through their products, for instance, with their own firm or with joint ventures. However, this led to the increase of number of employees working at the foreign subsidiaries. Nowadays, the number of employees working at the subsidiaries abroad, is much bigger than the number of employees working for the company in the parent country. In addition, because of the fact that these companies deal with expatriates, have to take into consideration the different places, as well as the local and global features of human resource management (Poor, 2005).
When firms must be managed globally, managers have to deal with numerous challenges. First, the number of the employees working abroad has increased and for that reason the human