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IHRM incross-border M&As, international alliances,and SMEs# of 23Chapter 4For use with International Human Resource Management 6eBy Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.ISBN-10: 1408032090 Cengage LearningCross-border alliances # of 23Chapter 4For use with International Human Resource Management 6eBy Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.ISBN-10: 1408032090 Cengage LearningEquity & non-equity modes of foreign operationFigure 4.1

# of 23Chapter 4For use with International Human Resource Management 6eBy Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.ISBN-10: 1408032090 Cengage Learning4Cross-Border mergers & acquisitions # of 23Chapter 4For use with International Human Resource Management 6eBy Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.ISBN-10: 1408032090 Cengage LearningThe formation processes of M&As and HR challengesFigure 4.2

# of 23Chapter 4For use with International Human Resource Management 6eBy Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.ISBN-10: 1408032090 Cengage Learning6Typical cross-border M&A problemsWithin the first year of a merger,up to 20% of executives may be lostThe percentage lost gets worse over more than one year after a mergerPersonnel issues are often neglectedA large number of M&As fail or do not produce the intended results

# of 23Chapter 4For use with International Human Resource Management 6eBy Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.ISBN-10: 1408032090 Cengage LearningHR activities in the phases of a cross-border M&AFigure 4.4

# of 23Chapter 4For use with International Human Resource Management 6eBy Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.ISBN-10: 1408032090 Cengage Learning8You want to understand how these relate to IHRM:Cross-border alliancesEquity-based alliances (M&As, IJVs)Globalizing SMEsObjectives# of 23Chapter 4For use with International Human Resource Management 6eBy Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.ISBN-10: 1408032090 Cengage LearningComparing HRM in M&AsPerformance-related pay is more popular in US than in Japan or GermanyRecruitment in US is more short-term than in Germany, France, & UKJapan still has longest-term focusUS training & career planning is the most extensiveFrench still favor French managersGermans are the most anxious to adoptinternational practices for their M&As

# of 23Chapter 4For use with International Human Resource Management 6eBy Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.ISBN-10: 1408032090 Cengage LearningInternational equity joint ventures # of 23Chapter 4For use with International Human Resource Management 6eBy Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.ISBN-10: 1408032090 Cengage LearningIJV challenges includeHR must manage relations at the interfaces between IJV & parent companies

Different rules can create critical dualities

HR must develop appropriate HRM practices & strategies for the IJV itself.

HR must recruit, develop, motivate,retain human resources at IJV level# of 23Chapter 4For use with International Human Resource Management 6eBy Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.ISBN-10: 1408032090 Cengage LearningFormation of an international equity joint ventureFigure 4.5

# of 23Chapter 4For use with International Human Resource Management 6eBy Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.ISBN-10: 1408032090 Cengage Learning13The main reasons for an IJVTo gain knowledge & transfer that knowledgeThe host government insistsIncreased economies of scaleTo gain local knowledgeTo obtain vital raw materialsTo share risks (e.g., financial)To improve global competitive advantageProvide an efficient & cost effective responserequired by market globalization

# of 23Chapter 4For use with International Human Resource Management 6eBy Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.ISBN-10: 1408032090 Cengage LearningIJV development stagesPartnership roleChange facilitator & strategy implementerInnovatorCollaborator

# of 23Chapter 4For use with International Human Resource Management 6eBy Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.ISBN-10: 1408032090 Cengage LearningInternational SMEs # of 23Chapter 4For use with International Human Resource Management 6eBy Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.ISBN-10: 1408032090 Cengage LearningSMEs are very importantIn EEA & Sweden:99+% of 16 million enterprises in EEA & Sweden are SMEsTwo thirds of jobs are in SMEsIn Asia Pacific region:SMEs are 90% of all enterprises32-48% employment is by SMEsIn US:80+% employment is by SMEswith less than 20 employees# of 23Chapter 4For use with International Human Resource Management 6eBy Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.ISBN-10: 1408032090 Cengage LearningBarriers to international markets by SMEs1. Not enough working capital to finance exports 2. Inability to identify foreign business opportunitiesLimited information to locate/analyze marketsInability to contact potential overseas customersInability to obtain reliable foreign representationLack of managerial time to handle internationalizationUntrained or not enough personnel to go internationalDifficulty in managing competitors pricesLack of home government assistance & incentivesExcessive transportation & insurance costs

TOP10# of 23Chapter 4For use with International Human Resource Management 6eBy Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.ISBN-10: 1408032090 Cengage LearningIHRM features in SMEsThe founder or owner has large impactRecruitment, selection, & retention:SMEs struggle because of perceptionsYet SME requirements are similar to those of large organizationsHuman resource development learningExpatriate managementLimited HR dept resources& outsourcing# of 23Chapter 4For use with International Human Resource Management 6eBy Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.ISBN-10: 1408032090 Cengage Learning