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CHAPTER 13

GLOBAL2 PENG

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CHAPTER 13 LEARNING OBJECTIVES

After studying this chapter, you should be able to:

1. Explain staffing decisions, with a focus on expatriates.

2. Identify training and development needs for expatriates and host-country nationals.

3. Identify and discuss compensation and performance appraisal issues.

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CHAPTER 13 LEARNING OBJECTIVES

After studying this chapter, you should be able to:

4. List factors that affect labor relations in both home and host countries.

5. Discuss how the institution-based and resource-based views shed additional light on human resource management.

6. Identify the five Cs of human resource management.

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LO1: EXPLAIN STAFFING DECISIONS

Terms to know: Human resources management Staffing Host country nationals

(HCNs) Expatriates

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LO1: TYPES OF EXPATRIATES

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LO1: THREE APPROACHES TO STAFFING

Ethnocentric approach:

Emphasizes norms and practices of parent company.

Relies on PCNs. Perceived lack of talent among HCNs often

necessitates this approach.

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LO1: THREE APPROACHES TO STAFFING

Polycentric approach: Focuses on norms and practices of host

country. Relies on HCNs. “When in Rome…” HCNs have no language or cultural

barriers. Placing HCNs in top roles

may send a morale-boosting signal to other HCNs.

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LO1: THREE APPROACHES TO STAFFING

Geocentric approach:

Focuses on finding most suitable managers, disregarding nationality.

For geographically dispersed MNE, this approach can help create corporate-wide culture and identity.

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LO1: STRATEGY AND STAFFING

Systematic link between strategic posture of an MNE

and its staffing approach

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LO1: THE ROLE OF EXPATRIATES

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Strategists – represent interests of the MNE’s headquarters Daily managers – run operations and build local capabilities Ambassadors – represent headquarter’s interests, build relationship with host-country stakeholders; represent subsidiary to headquarters Trainers – for their replacements

LO1: THE ROLE OF EXPATRIATES

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LO1: FACTORS IN EXPATRIATE SELECTION

Expatriate failure rates are high… premature (earlier than expected) return unmet business objectives unfulfilled career development objectives

Causes for failure: Family’s inability to adjust to culture Usually a combination of work-related and

family-related problems

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LO1: FACTORS IN EXPATRIATE SELECTION

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LO2: TRAINING FOR EXPATRIATES

Length and rigor should correspond to expected length of stay

Extensive language training Sensitivity training, with immersion

approach

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LO2: DEVELOPMENT FOR EXPATRIATES/REPATRIATES

Psychological contract Career anxiety Loss of status Cultural re-adjustment

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LO2: TRAINING AND DEVELOPMENT FOR HCNS

In China, for example, a key factor in retaining or losing talent is which employer can offer better training and development opportunities.

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LO3: COMPENSATION FOR EXPATRIATES

Going Rate versus Balance Sheet

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LO3: BALANCE SHEET APPROACH

Hypothetical Compensation Package Using Balance Sheet Approach

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LO3: COMPENSATION FOR HCNS

Low-level HCNs have relatively little bargaining power.

HCNs in management and professional positions gaining more bargaining power.

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LO3: PERFORMANCE APPRASIAL

Cultural differences may create problems in appraising HCNs.

Expatriates need to be evaluated by their own supervisors.

Compensation and performance appraisal are even more important during difficult economic times.

Performance appraisal helps managers make decisions about pay and promotion, development,

documentation, and subordinate expression.

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LO4: LABOR RELATIONS AT HOME

Firms’ key concern – cut costs, enhance competitiveness.

Unions’ concern – higher wages and more benefits.

Threat of job loss vs. threat of strike.

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LO4: LABOR RELATIONS ABROAD

MNEs prefer to deal with non-unionized labor.

In many developing countries, governments welcome MNEs and at the same time silence unions.

However, high profile strikes at plants run by Taiwan’s Foxconn and Japan’s Honda in China suggest that government stances may be changing.

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LO5: INSTITUTIONS AND HUMAN RESOURCE MANAGEMENT

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LO5: FORMAL INSTITUTIONS AND HUMAN RESOURCE MANAGEMENT

Formal institutions:Every country has

rules and regulations governing human

resource management.

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LO5: INFORMAL INSTITUTIONS AND HUMAN RESOURCE MANAGEMENT

Informal institutions: •MNEs from different countries have different norms in staffing. •Must avoid stereotyping.•Extra compensation required to attract high-caliber expats.

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LO5: RESOURCES AND HUMAN RESOURCE MANAGEMENT

Are particular HR activities rare?

Does a particular HR activity add value?

How imitable are certain HR activities?

Do HR practices support organizational capabilities?

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LO6: THE FIVE Cs OF HRM

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DEBATE: ACROSS-THE-BOARD PAY CUT vs. REDUCTION IN FORCE

Across-the-board: With US firms, results tend to be

very negative. May clash with individualistic culture.

Reduction in force: “Corporate cannibalism” Often viewed as unethical outside

the Anglo-American world. When managed correctly, impacted employees

are able to separate with dignity.