CHAPTER 14: INTERNATIONAL/ GLOBAL HUMAN RESOURCE MANAGEMENT

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International Imperative
Why organizations expand internationally
To capture enhanced market opportunities that foreign countries may present To achieve economies of scale in production and administration by expanding scope and volume of operations to international markets Keeping up with industry leaders may require organization to enter foreign markets Acquiring ownership of foreign-based organization or foreignsubsidiary

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How International & Domestic HRM Differ International HRM requires

Managing broader range of functional areas Becoming more involved in employees personal lives Setting up several different HRM systems for different geographic locations Dealing with more complex external constituencies Participating in international assignments that have heightened exposure to personal risk
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International Expansion Strategies for expanding internationally

Exporting locally produced goods to host country Subcontracting or licensing production of certain goods or services to foreign partner Entering into joint venture with foreign partner Setting up operations (making a direct investment) in form of foreign branch or subsidiary

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Assessing Culture: Hofstede s Cultural Differences Dimensions

Individualism or collectivism
Individualistic societies value development of, and focus on individual Collective societies value group relationships

Power distance
Extent to which society is hierarchical, and how power is distributed among its members

Uncertainty avoidance
Extent to which society feels comfortable with ambiguity, and values and encourages risk-taking risk-

Quantity versus quality of life (masculinity/femininity)

Emphasis on assertiveness and achievement, as compared to interpersonal relationships

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Exhibit 14-1 14-

Assessing Culture

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Hall s Model of Cultural Differences

Time
Importance or sense of time in daily activities

Space (distance)
Amount of physical distance individuals attempt to maintain between themselves & others

Material goods
Emphasis or inferences on possession of goods to signify power, success and status

Friendships
Importance of friendships in conferring status

Agreements
Considers how agreements are reached

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Strategic HR Issues in Global Assignments

Approaches to sending employees abroad
Administrative approach
Assisting employee destined for international assignment with paperwork and minor logistics

Tactical approach
Managing risk or failure factor of overseas assignment by providing paperwork assistance and modest amount of training

Strategic approach
Extensive support and coordination of international assignment, and strategized repatriation program at the end of the assignment

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Strategic HR Issues in Global Assignments

Strategic management of global assignments
1. Establish specific purpose for assignment 2. Select appropriate employee for assignment 3. Organizational and individual purposes for assignment must be identified and matched 4. Assess adaptability to host culture of both employee and any family members who will be accompanying employee 5. Provide appropriate training for employee and family members 6. Simultaneous training should be conducted for headquarters staff
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Exhibit 14-2 14-

Strategic Issues

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Exhibit 14-3 14-

Strategic HR Issues

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Determining Expatriate Compensation

Balance sheet method
Expatriate salary based on home country pay Additional expenses associated with relocation and assignment Hardship and incentives to determine overall reimbursement and compensation level
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Higher-of-home-orHigher-of-home-orhost method
Employees salary at home adjusted upward to account for higher cost of living (localization approach) Salary converted to host countrys equivalent when employee is on permanent assignment

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Four Approaches to IHRM

Make strategic decision as to level of standardization desired across locations
Ethnocentric approach
Exporting organizations home country practices and policies to foreign locations

Polycentric approach
Allowing each location to develop own practices and policies

Regiocentric approach
Developing standardized practices and policies by geographic region

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

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Exhibit 14-4 14-

Setting Strategic HR Standards

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Exhibit 14-5 14-

Repatriation

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Reading 14.1 (Roberts et al.)

Managing Global Workforce: Challenges and Strategies

Challenges:
Deployment in getting right skills to right place in organization, regardless of geographic location Knowledge and innovation dissemination and transfer, where all business units concurrently receive and provide information Talent identification and development of those employees with abilities and skills to function effectively in global organization
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Reading 14.1

Managing Global Workforce: Challenges and Strategies Strategies for managing global workforce
Develop aspatial careers for employees to provide rich contextual knowledge of environments and cultures. Provide specific awareness building assignments that develop crosscrosssensitivity in high potential employees in short time Utilize expert SWAT teams deployed on short-term basis for shortoperational problems technical projects Adopt virtual solutions by using electronic communication technologies to connect local employees to distant problems

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Reading 14.1

Diagnosing Challenges Deployment challenge

Contact time required Extent to which skills can be applied out of cultural context

Knowledge and innovation dissemination challenge

Choosing among four strategies depends on technical complexity of information to be shared, and extent to which it must be culturally embedded

Talent identification and development challenge

Organizations should select well, then develop
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Reading 14.2 (Hallowell et al.)

Four Seasons Goes to Paris

Model of corporate culture consists of four components

Underlying assumptions, such as subordinates should fulfill job requirements Values
Espoused values Enacted values

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Reading 14.2

Four Seasons Goes to Paris

Employee perceptions of management practices culture is what employees perceive management believes Cultural artifacts
If espoused values are enacted, culture may emerge in which senior management and employees share similar service-relevant thoughts, feelings, and servicepatterns of behavior Potential to enhance customer value and contribute to competitive advantage

Flexibility versus consistency

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Reading 14.3 (Sanchez et al.)

Adapting to a Boundary less World 90% of companies base international selections on technical expertise, downplaying other areas Openness to profound personal transformation is most fundamental sign of expatriate readiness Personality aspects that impede adaptation
Authoritarianism Rigidity Ethnocentrism

Clarification of expectancies beforehand

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Reading 14.3

Adapting to a Boundary less World Need to provide on-going, hands-on training, onhandsrather than just pre-departure awareness training pre Training is opportunity to provide social support Executives should learn to view identification with host as compatible with identification with parent culture Expatriates need to become aware of consequences that old repertoire of coping responses has in host culture
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Reading 14.3

Adapting to a Boundary less World Employer should facilitate integration into a local or regional network of other expatriates Delicate equilibrium among multiple stakeholders calls for skills similar to those possessed by political diplomats Parent organization should not create additional role conflict for the expatriate with policies that are insensitive to cultural differences

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Reading 14.3

Adapting to a Boundary less World

Repatriation
Feeling that others do not share multicultural identification can create sense of isolation Frequent loss of autonomy Unrealistic expectations about being promoted upon return

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