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Management CH 16
Strategic Role of HR
4 Basic Tasks
Staffing policy
Management training & development
Performance appraisal
Compensation policy
1967 International Division to coordinate exporting – 1970 Japanese plant – 1971 Irish plant
2003 61% of business from international sales of $1.84 b – 50 plants in 21 countries – 16,000
people worldwide (1/3 in US)
Strategy =
Low cost & excellent customer service
Plants are located where conditions are favorable & major customers are close
Truly global company - at home wherever in world they operate that proactively shares
valuable knowledge across operations in different countries
Committed to globally minded managers, multilingual competency & creation of common
company culture
Types
Ethnocentric
Polycentric
Geocentric
Types of Staffing Policy
Ethnocentric
Ethnocentric - all key management positions are filled by
parent company nationals
May believe the host country lacks qualified individuals
May see this as the best way to maintain a unified corporate
culture
May believe it is the best way to transfer core competencies
to a foreign operation
Disadvantages
Limits advancement opportunities for host-country nationals
-> resentment, lower productivity & increased turnover
Can lead to “cultural myopia” – failure to understand host
country cultural differences that require different approaches
to management & marketing
Disadvantages
Host country nationals have limited opportunities to gain experience
outside their own country & can’t progress to senior positions ->
resentment
Gap can form between host country managers & parent country – isolating
HQ staff from various foreign subsidiaries (Unilever’s little kingdoms &
transnational)
Lack of management transfers can lead to lack of integration -> a
federation of largely independent national units with only nominal links to H
Difficult to transfer core competencies or realize experience curve &
location economies
Disadvantages
Immigration laws can require the employment of host-country nationals
Expensive to implement – training & relocation costs
Need a compensation structure with a standardized international base pay
level higher than national levels in most countries
Only 10% of 50 Fortune 500 firms tested for important traits such as cultural
sensitivity, interpersonal skills, adaptability & flexibility