Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall International HRM Challenge...

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

International HRM

Challenge

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Chapter 17


Chapter 17 Objectives

Specify the HRM strategies that are most appropriate for firms at different stages of internationalization.

Identify the best mix of host-country and expatriate employees given the conditions facing the firm.

Explain why international assignments often fail and the steps a firm can take to ensure success in this area.

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Chapter 17 Objectives

Reintegrate returning employees into the firm after they complete an international assignment.

Develop HRM policies and procedures that match the needs and values of different cultures.

Consider ethical implications of HRM policies and procedures on a global basis.

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Stages of International Involvement

Expatriate—citizen of one country and lives and works in another country

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Multinational corporation (MNC) Firm with assembly and production

facilities in several regions of the world

Transnational corporation Firm with highly decentralized

operations in many countries Has little allegiance to its country of

origin and weak ties to any country



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Outsourcing Used extensively by firms in stages 3 to 5 Challenges include

Online security Safety issues Client complaints

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Falling Barriers Trade, production, services, and finances

barriers largely disappeared


The Mix of Host-Country and Expatriate Employees

Wholly owned subsidiary and joint ventures Must decide who will manage overseas unit

Three approaches Ethnocentric approach Polycentric approach Geocentric approach

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The Mix of Host-Country and Expatriate Employees

Reliance on expatriates increases when:

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Sufficient local talent is not available

Part of firm’s overall business strategy is to create a corporate-wide global vision

International units and domestic operations are highly interdependent

The political situation is unstable Are significant cultural differences

between the host and home countries


Challenges of Expatriate Assignments

20–40% failure rate for U.S. expatriates 3–4 times higher than Europeans or Asians

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Many reasons assignments end in failure Career blockage Culture shock Lack of pre-departure cross-culture

training Overemphasis on technical

qualifications Getting rid of a troublesome

employee Family problems


Challenges of Expatriate Assignments

Difficulties on Return

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Lack of respect of acquired skills

Loss of status Poor planning for return

position Reverse culture shock


Using HRM to Effectively Manage Expatriates

Selection Emphasize cultural sensitivity as a

selection criterion Establish a selection board of

expatriates Require previous international

experience Consider hiring foreign-born employees

who can serve as future expatriates Screen candidates’ spouses and

families

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Training

9–12 months before assignment At least some training should go to

the expatriate’s family Three approaches to training:

Information-giving approach Affective approach Impression approach

Local managers need to be prepared to train incoming expatriates

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Career Development

Position the international assignment as a step toward advancement within the firm

Provide support for expatriates Provide career support for

spouse

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Compensation Provide a disposable income

equivalent to what the expatriate would receive at home

Provide an explicit “add-on” incentive for accepting an international posting

Don’t put expatriates in the same jobs held by locals or lower-ranking jobs

Calculating compensation for expatriates is very difficult Fluctuating exchange rates Cost of living varies tremendously

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Using HRM to Effectively Manage Expatriates

Role of HR Department

Women and International Assignments

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Developing HRM Policies in a Global Context

Western-style management likely to clash with foreign norms and values

Must mold practices to culture

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Hofstede’s 5 Dimensions of Culture Power distance Individualism Uncertainty avoidance Masculinity/femininity Long-term/short-term orientation


EEO in the International Context

EEO prohibition of discrimination based on age, sex, race, etc. apply to international assignments too

Foreign national employees of U.S. companies working outside the US are not covered by U.S. employment law

Immigration and Control Act (1986) Non-U.S. citizens living and working

in the U.S. May not be discriminated against

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Developing HRM Policies: Caveats

“National culture” may be an elusive concept

Culture changes over time Companies sometimes blame

international personnel problems on culture without study

Virtually no data on the success/failure of HRM practices as a function of culture

Different cultures often have very different notions of right and wrong

The business laws of other countries often force companies to change their practices

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Human Resource Management and Exporting Firms

Key impediments to exporting: Lack of knowledge about

international markets, business practices, and competition

Lack of management commitment to generating international sales

Impediments can be attributed to lack of utilization of human resources

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Other International HR Considerations

Ethics and Social Responsibility Many ethical dilemmas face

expatriates Ethical and legal are not the same

Foreign Corrupt Practices Act (1977)

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Political Risk Government pressures can

impact operations negatively. Expatriates often get caught in

the middle


Summary and Conclusions

Five stages of international involvement Three approaches to managing foreign

operations Ethnocentric, polycentric and geocentric

Emphasize cultural sensitivity when selecting people for international assignments

Position international assignments as step towards advancement in the firm

Don’t transfer home HRM practices abroad Reinforce export activities with HR practices

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Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall 17-22

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Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall International HRM Challenge...

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