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INTRODUCTION
Chapter 1
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
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INTRODUCTION
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Vocabulary
Objectives
Scope of book
Defining IHRM
Domestic vs. international
Variables that moderate the differences
The cultural environment
Industry type
Extent of MNE reliance on HC market
Senior mgmt. attitudes to international ops.
Chapter 1
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
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Vocabulary
HRM, IHRM
PCN, HCN, TCN
MNE
expatriate = international assignee, inpatriate
repatriation
equity issues
psychological contract
culture shock
convergence/divergence hypotheses
Porter’s value chain model
index of transnationality
global mindset
asymmetric events
environmental dynamics
Chapter 1
organizational culture
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
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Objectives
1. Define IHRM and key terms
2. Introduce & review expatriate assignment mgmt.
3. Outline differences between domestic & IHRM
4. Detail a model that captures these differences
5. Discover complexity & increasing challenges to
existing IHRM practices and models
Chapter 1
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
4 of 32
Figure 1.1
Inter-relationships between approaches to the field
Chapter 1
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
5 of 32
Defining international HRM
Refers to those activities undertaken by an
organization to effectively utilize its human
resources.
Chapter 1
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
6 of 32
HRM activities
1. Human resource planning
2. Staffing: recruitment, selection, placement
3. Performance management
4. Training & development
5. Compensation & benefits
6. Industrial relations
Chapter 1
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
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Morgan’s “3-D” definition of IHRM
1. The HR activities of
procurement, allocation & utilization
2. The countries where IHRM occurs:
» Host-country where subsidiary may be located
» Parent-country where firm is headquartered
» Other-countries that may be
source of labor, finance & other inputs
3. The employees of an international firm:
» HCNs (host country nationals)
» PCNs (parent .. .. )
» TCNs (host .. .. )
Chapter 1
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
8 of 32
Figure 1.2
International assignments create expatriates
Chapter 1
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
9 of 32
Stahl-Björkman-Morris def. of IHRM
The field of IHRM covers
All issues related to managing the global
workforce and firm outcomes
A wide range of HR issues facing MNEs in
different parts of their organizations
Chapter 1
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
10 of 32
IHRM is more complex than
domestic HRM
IHRM has …
1. more HR activities
2. a need for a broader perspective
3. more involvement in employees’ personal lives
4. changes of emphasis as
the mix of expatriates & locals varies
5. more risk exposure
6. broader external influences
Chapter 1
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
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IHRM has international HR activities
■ International taxation
■ International relocation & orientation
■ Administrative services for expatriates
■ Host-government relations
■ Language translation services
Chapter 1
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
12 of 32
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International Taxation
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Chapter 1
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
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International relocation involves:
■ Arranging for pre-departure training
■ Providing immigration & travel details
■ Providing housing, shopping, medical care,
recreation & schooling information
■ Finalizing compensation details such as:
Delivery of salary overseas
Determination of overseas allowances
Taxation treatment
Chapter 1
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
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• Administration Services for Expatriates
Services in host countries
Ethical question arise
Host Govt Relations
Host govt relations help resolve potential
problems.
Language Translation Services
Role of translation group in HR dept is often
expanded to provide translation services
Chapter 1
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
15 of 32
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Chapter 1
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
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Changes in emphasis as the workforce START
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Chapter 1
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
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Chapter 1
Terrorism
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
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Type of government
State of the economy
Generally accepted practices of doing
business
Chapter 1
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
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Four more moderators
in addition to IHRM complexity
1. The cultural environment
2. The industry(ies) with which the MNE is
primarily involved
3. The extent to which the MNE relies on
its HC domestic market
4. The attitudes of senior management
Chapter 1
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
20 of 32
Figure 1.3
A model of all 5 variables that moderate the differences
between domestic and international HRM
Chapter 1
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
21 of 32
Culture matters
■ Culture shock
■ Emic ≠ etic
■ Emic refers to culture specific aspects of behaviors and
etic refers to culture common aspects
■ Convergence hypothesis(Etic)
■ Research tends to focus on macro level
■ There were principles of sound mgt that held regardless of the
national environment.
■ Universality of the sound mgt practices would lead to societies
becoming more and more alike in future
■ Divergence hypothesis(emic)
■ Research tends to focus on micro level.
Chapter 1
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
22 of 32
The MNE industry type continuum
An MNE performs somewhere in this range:
Multidomestic Industries Global Industries
Examples
retailing, distribution, insurance airlines, semiconductors, copiers
International strategy
Collapses to a Must integrate activities on a
series of domestic strategies. worldwide basis.
Chapter 1
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
23 of 32
The value chain also known as Porter’s Value Chain Analysis is a business
management concept that was developed by Michael Porter
According to Porter (1985), the primary activities are:
Operations - are all the activities required to transform inputs into outputs
(products and services).
Chapter 1
Service - includes all the activities required to keep the product or service
working effectively for the buyer after it is sold and delivered.
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
24 of 32
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Chapter 1
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
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Laurent’s steps for true IHRM:
1. Parent org. recognizes that its HRM reflects
some assumptions & values of own home culture.
2. Parent org. recognizes that its own peculiar ways are
neither universally better nor worse than others –
just different & likely to exhibit strengths & weaknesses,
particularly abroad.
3. Parent org. recognizes that its foreign subsidiaries may prefer
other ways to manage people – ways that are neither
intrinsically better nor worse, but possibly more effective locally.
4. Headquarters is willing to acknowledge cultural differences &
take steps to make them discussable & therefore usable.
5. All parties build belief that cross-cultural learning invites
more creative & effective ways of managing people.
Chapter 1
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
26 of 32
Reliance on Domestic Market
Small Domestic Market
One of the key drivers for seeking new international
markets
Chapter 1
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
27 of 32
Table 1.1
The world’s top 10 non-financial TNC, ranked by TNI, 2008a
1
Chapter 2
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
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What does senior mgmt. think?
Chapter 1
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
29 of 32
An MNE case study result
MNEs fail primarily because of
a lack of understanding of
the
differences
Chapter 1
For use with International Human Resource Management 6e ISBN-10: 1408032090
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. © Cengage Learning
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