McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved.

CHAPTER
15
Global Human Resource
Management

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Slide
15-1

Key Issues
• What are the pros and cons of different approaches
to staffing policy in international business?
• Why do managers fail in foreign postings? How
can such managers be helped to succeed?
• What is the role of training, management
development, and compensation practices in
managing international human resources?

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15-2

Human Resource Management

• Activities carried out by a firm to use its human resource
effectively
– Staffing, management development, performance evaluation,
compensation
• Across national borders the process increases in
complexity
– Environmental differences of: labor markets, culture, legal
systems, economic systems
– HR differences: compensation practices, labor laws, motivation
issues

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Slide
15-3

Staffing and International Strategy

Staffing Strategy Fit Pros Cons
Philosophy (??)
Ethnocentric International  puts qualified  local manager
 key overseas managers in resentment
positions place  cultural myopia
staffed by  creates global  immigration
home culture barriers
managers  transfer of core  costly
competences
Polycentric Multidomestic  alleviates  limits career
 key overseas cultural myopia mobility
positions  inexpensive to  isolates HQ
staffed by local implement from overseas
managers subs
Geocentric Global and  uses HR  costly
 best for job Transnational efficiently  immigration
gets it  builds strong barriers
global culture
and informal
management
network

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15-4

Expatriate Managers
• Managers assigned to to unit in country other than
that of their national origin
• High failure rates for US MNCs (in order of
importance)
• Spouse cannot adjust culturally
• Manager cannot adjust culturally
• Other family adjustment problems
• Manager’s lack of personal or emotional maturity
• Manager’s inability to cope with broader
responsibility overseas

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15-5

Expatriate Managers

• High failure rates for Japanese firms (in order of

importance)
• Manager’s inability to cope with broader
responsibility overseas
• Manager cannot adjust culturally
• Manager’s lack of personal or emotional maturity
• Lack of technical competence
• Spouse cannot adjust culturally

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15-6
Expatriate Success Predictors
Mendenhall and Oddou
• Self-orientation
– Strengthen self-esteem, self-confidence, mental well-being
– Adapt to food, music, sport, outside interests
– Superior technical competency
• Others-orientation
– Enhance ability to interact effectively with host nationals
– Relationship development, willingness to communicate
• Perceptual ability
– Understand why people in other countries behave the way they do
– Non-judgmental, non-evaluative in interpreting others’ behavior
• Cultural toughness
– How tough is host culture to adjust to?

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Career Development for Expatriates

• Pre-departure, on-site training
– Cultural training
– Language training
– Practical training
• Repatriation
– Many repatriating expatriates lost to MNCs because
suitable positions not available at home
– Autonomy, span of control, compensation
– Repatriation strategy failure makes recruitment of
competent expatriates difficult

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15-8

Other Expatriate Issues

• Performance appraisal
– Two groups with conflicting perspectives/cultures
appraise the expatriate: home managers, host managers
• Compensation
– Different national standards
– Expatriate pay issues: base pay, cost-of-living, housing,
education, hardship, foreign-service-premium, double-
taxation, medical/pension benefits, home leave

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Other IHRM Issues

• International labor relations
– Concerns of organized labor: cultural and legal
differences affect attitudes towards ...
• Better pay, job security, working conditions
• Bargaining power with management
– Strategy of organized labor
• Establish international, cross-border labor organizations
• Lobby national governments to restrict MNC activities
– Approach to labor relations
• Degree to which MNC labor relations are centralized or
decentralized (integration vs responsiveness…)

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