International Hr Manag

8/6/2019 International Hr Manag

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CHAPTER 14:

INTERNATIONAL/

GLOBAL HUMAN

RESOURCEMANAGEMENT

Copyright 2005 South-Western. All rights reserved. footer


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Copyright 2005 South-Western. All rights reserved. 12

International ImperativeInternational Imperative

Why organizations expand internationallyWhy organizations expand internationally

To capture enhanced market opportunities that foreignTo capture enhanced market opportunities that foreign

countries may presentcountries may present

To achieve economies of scale in production andTo achieve economies of scale in production andadministration by expanding scope and volume of operationsadministration by expanding scope and volume of operations

to international marketsto international markets

Keeping up with industry leaders may require organization toKeeping up with industry leaders may require organization to

enter foreign marketsenter foreign markets

Acquiring ownership of foreignAcquiring ownership of foreign--based organization orbased organization or

subsidiarysubsidiary


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How International & Domestic HRM DifferHow International & Domestic HRM Differ

International HRM requiresInternational HRM requires

Managing broader range of functional areasManaging broader range of functional areas

Becoming more involved in employees personalBecoming more involved in employees personal

liveslives

Setting up several different HRM systems forSetting up several different HRM systems for

different geographic locationsdifferent geographic locations

Dealing with more complex external constituenciesDealing with more complex external constituencies Participating in international assignments that haveParticipating in international assignments that have

heightened exposure to personal riskheightened exposure to personal risk


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International ExpansionInternational Expansion

Strategies for expanding internationallyStrategies for expanding internationally

Exporting locally produced goods to host countryExporting locally produced goods to host country

Subcontracting or licensing production of certainSubcontracting or licensing production of certain

goods or services to foreign partnergoods or services to foreign partner

Entering into joint venture with foreign partnerEntering into joint venture with foreign partner

Setting up operations (making a direct investment) inSetting up operations (making a direct investment) in

form of foreign branch or subsidiaryform of foreign branch or subsidiary


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Assessing Culture:Assessing Culture:Hofstedes Cultural Differences DimensionsHofstedes Cultural Differences Dimensions

Individualism or collectivismIndividualism or collectivism

Individualistic societies value development of, and focus on individualIndividualistic societies value development of, and focus on individual

Collective societies value group relationshipsCollective societies value group relationships

Power distancePower distance

Extent to which society is hierarchical, and how power is distributedExtent to which society is hierarchical, and how power is distributed

among its membersamong its members

Uncertainty avoidanceUncertainty avoidance

Extent to which society feels comfortable with ambiguity, and values andExtent to which society feels comfortable with ambiguity, and values and

encourages riskencourages risk--takingtaking Quantity versus quality of life (masculinity/femininity)Quantity versus quality of life (masculinity/femininity)

Emphasis on assertiveness and achievement, as compared toEmphasis on assertiveness and achievement, as compared to

interpersonal relationshipsinterpersonal relationships


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Exhibit 14Exhibit 14--11

Assessing CultureAssessing Culture


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Strategic HR Issues in Global AssignmentsStrategic HR Issues in Global Assignments

Approaches to sending employees abroadApproaches to sending employees abroad

Administrative approachAdministrative approach

Assisting employee destined for international assignment withAssisting employee destined for international assignment with

paperwork and minor logisticspaperwork and minor logistics Tactical approachTactical approach

Managing risk or failure factor of overseas assignment byManaging risk or failure factor of overseas assignment by

providing paperwork assistance and modest amount of trainingproviding paperwork assistance and modest amount of training

Strategic approachStrategic approach Extensive support and coordination of internationalExtensive support and coordination of international

assignment, and strategized repatriation program at the end ofassignment, and strategized repatriation program at the end of

the assignmentthe assignment


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Strategic HR Issues in Global AssignmentsStrategic HR Issues in Global Assignments

Strategic management of global assignmentsStrategic management of global assignments

1.1. Establish specific purpose for assignmentEstablish specific purpose for assignment

2.2. Select appropriate employee for assignmentSelect appropriate employee for assignment

3.3. Organizational and individual purposes for assignmentOrganizational and individual purposes for assignmentmust be identified and matchedmust be identified and matched

4.4. Assess adaptability to host culture of both employee andAssess adaptability to host culture of both employee and

any family members who will be accompanying employeeany family members who will be accompanying employee

5.

5.

Provide appropriate training for employee and familyProvide appropriate training for employee and familymembersmembers

6.6. Simultaneous training should be conducted forSimultaneous training should be conducted for

headquarters staffheadquarters staff


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Strategic IssuesStrategic Issues


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Strategic HR IssuesStrategic HR Issues


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Determining Expatriate CompensationDetermining Expatriate Compensation

Balance sheetBalance sheet methodmethod

Expatriate salary basedExpatriate salary based

on home country payon home country pay

Additional expensesAdditional expensesassociated withassociated with

relocation andrelocation and

assignmentassignment

Hardship and incentivesHardship and incentivesto determine overallto determine overall

reimbursement andreimbursement and

compensation levelcompensation level

HigherHigher--ofof--homehome--oror--

hosthost methodmethod

Employees salary atEmployees salary at

home adjusted upwardhome adjusted upwardto account for higherto account for higher

cost of living (localizationcost of living (localization

approach)approach)

Salary converted to hostSalary converted to host

countrys equivalentcountrys equivalentwhen employee is onwhen employee is on

permanent assignmentpermanent assignment


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Four Approaches to IHRMFour Approaches to IHRM

Make strategic decision as to level ofMake strategic decision as to level of

standardization desired across locationsstandardization desired across locations

Ethnocentric approachEthnocentric approach

Exporting organizations home country practices and policies toExporting organizations home country practices and policies toforeign locationsforeign locations

Polycentric approachPolycentric approach Allowing each location to develop own practices and policiesAllowing each location to develop own practices and policies

Regiocentric approachRegiocentric approach

Developing standardized practices and policies by geographic regionDeveloping standardized practices and policies by geographic region

Geocentric approachGeocentric approach Developing one set of global practices and policies applied at allDeveloping one set of global practices and policies applied at all

locationslocations


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Setting Strategic HRStandardsSetting Strategic HRStandards


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RepatriationRepatriation


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Reading 14.1 (Roberts et al.)Reading 14.1 (Roberts et al.)

Managing Global Workforce:Managing Global Workforce:

Challenges andStrategiesChallenges and

Strategies

Challenges:Challenges:

Deployment in getting right skills to right place inDeployment in getting right skills to right place in

organization, regardless of geographic locationorganization, regardless of geographic location Knowledge and innovation dissemination andKnowledge and innovation dissemination and

transfer, where all business units concurrentlytransfer, where all business units concurrently

receive and provide informationreceive and provide information

Talent identification and development of thoseTalent identification and development of thoseemployees with abilities and skills to functionemployees with abilities and skills to function

effectively in global organizationeffectively in global organization


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Reading 14.1Reading 14.1

Managing Global Workforce:Managing Global Workforce:

Challenges and StrategiesChallenges and Strategies

Strategies for managing global workforceStrategies for managing global workforce

Develop aspatial careers for employees to provide richDevelop aspatial careers for employees to provide rich

contextual knowledge of environments and cultures.

Providecontextual knowledge of environments and cultures.

Providespecific awareness building assignments that develop crossspecific awareness building assignments that develop cross--

sensitivity in high potential employees in short timesensitivity in high potential employees in short time

Utilize expert SWAT teams deployed on shortUtilize expert SWAT teams deployed on short--term basis forterm basis for

operational problems technical projectsoperational problems technical projects

Adopt virtual solutions by using electronic communicationAdopt virtual solutions by using electronic communication

technologies to connect local employees to distant problemstechnologies to connect local employees to distant problems


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Reading 14.2 (Hallowell et al.)Reading 14.2 (Hallowell et al.)

Four Seasons Goes to ParisFour Seasons Goes to Paris

Model of corporate culture consists ofModel of corporate culture consists of

four componentsfour components

Underlying assumptions, such asUnderlying assumptions, such assubordinates should fulfill job requirementssubordinates should fulfill job requirements

ValuesValues

Espoused valuesEspoused values

Enacted valuesEnacted values


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Four Seasons Goes to ParisFour Seasons Goes to Paris

Employee perceptions of management practicesEmployee perceptions of management practices

culture is what employees perceive managementculture is what employees perceive management

believesbelieves

Cultural artifactsCultural artifacts If espoused values are enacted, culture may emergeIf espoused values are enacted, culture may emerge

in which senior management and employees sharein which senior management and employees share

similar servicesimilar service--relevant thoughts, feelings, andrelevant thoughts, feelings, and

patterns of behaviorpatterns of behavior Potential to enhance customer value and contributePotential to enhance customer value and contribute

to competitive advantageto competitive advantage

Flexibility versus consistencyFlexibility versus consistency


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Reading 14.3 (Sanchez et al.)Reading 14.3 (Sanchez et al.)

Adapting to a Boundary less WorldAdapting to a Boundary less World

90% of companies base international selections on90% of companies base international selections on

technical expertise, downplaying other areastechnical expertise, downplaying other areas

Openness to profound personal transformation isOpenness to profound personal transformation is

most fundamental sign of expatriate readinessmost fundamental sign of expatriate readiness

Personality aspects that impede adaptationPersonality aspects that impede adaptation

AuthoritarianismAuthoritarianism

RigidityRigidity EthnocentrismEthnocentrism

Clarification of expectancies beforehandClarification of expectancies beforehand


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Need to provide onNeed to provide on--going, handsgoing, hands--on training,on training,

rather than just prerather than just pre--departure awareness trainingdeparture awareness training

Training is opportunity to provide social supportTraining is opportunity to provide social support

Executives should learn to view identificationExecutives should learn to view identification

with host as compatible with identification withwith host as compatible with identification with

parent cultureparent culture

Expatriates need to become aware ofExpatriates need to become aware ofconsequences that old repertoire of copingconsequences that old repertoire of coping

responses has in host cultureresponses has in host culture


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Employer should facilitate integration into a localEmployer should facilitate integration into a local

or regional network of other expatriatesor regional network of other expatriates

Delicate equilibrium among multiple stakeholdersDelicate equilibrium among multiple stakeholders

calls for skills similar to those possessed bycalls for skills similar to those possessed by

political diplomatspolitical diplomats

Parent organization should not create additionalParent organization should not create additional

role conflict for the expatriate with policies thatrole conflict for the expatriate with policies thatare insensitive to cultural differencesare insensitive to cultural differences


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RepatriationRepatriation

Feeling that others do not share multiculturalFeeling that others do not share multicultural

identification can create sense of isolationidentification can create sense of isolation

Frequent loss of autonomyFrequent loss of autonomy

Unrealistic expectations about beingUnrealistic expectations about being

promoted upon returnpromoted upon return

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