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Introduction ‘Why do companies like Wal-Mart, Proctor & Gamble, IBM, Nike, and Nestlé want to pursue a global ralogy despite fais and loses? The answer a fuily simple. They recognise that business is becoming {nied global arene as trade berriers fll, communication becomes fester and cheaper and consumer {ates n everything from clothing to cellule phones converge, Firms from across the globe ae entering ‘new mart, facing new challenges head on and forming glbel alliances with other firms to compete tmore effectively and succeed. As the president ofa German compaty remaried, "There are no German nd American companies (coday). There are only sucessful and ursuceesful companies! Ford Motor Co. isan exelent example of a multinational company (MIC). I ans design and production facilities found the word. Oneof its newest models, the Ford Contour, waajinty designed by European and US {team andi ald with only minor variations in dozens of foreign markets. Ford makes end sells other ‘ars the Burope that are never seen in the United States Ford cars are designed, produced, and sold for individual markets, wherever they are and without regard fr national boundaries, Box 30.4 ‘The world ie full of Stat 1 Corporations! “iat Svan Wasps Pe San apni wa pe so po aT IO wechalne name seen Nests pene etal GED ne Orman ban HU ale ecomomy see ‘etc gba son ta neon ae est nk ‘ees Sonon tr wat nds edeg ay goon oven tempt Neer moe peo + Cama trap ote pn ts nrg ae ova ee onmmnye et a fon peal Slat we + Onerconpmr arcane og oot ee spanner FerASo} ns anor spe! te wa avg ssn my pains me 60 re Pressures of Globalisation “Thelin of global companies that transcend national boundaries is growing steady. Asa reslt ofthis ‘Gobalitaton, companies ere compelled o integrate their production, finance, marketing, R&D activities ee tareful manner There is also en increasing need for creating organisation structures eapable of bancng centralised home-fice control with adequate local eutonomy. Globalisation demands that Tmanngers stay abreast ef economic, social ad political Lends around the world, and understand the {implication ofthese trends for their orgensstions, Organisations, oo, must learn seross borders, ifhey ‘have tosurrive and flourish in various countries wth dveredulturse and multifarious backgrounds Tis party ths emphasis on continuoue learning that has helped Matshita Blectrie master markets and {iverve cultures in 28 countries from Malaya to Brasil rom Austria to China, from Iran to Tanzania, noct Matsushita top lesaons for going gabal sta be a good corporate citizen in every country respecting ‘iltures, custom and languages. In countries with Muslim religion practises for example, Matoushita, ‘fers exclusive prayer rooms and permits two prayer sessions for shift? Global Assignments ean be Demanding Cobatisationaleo means that more employes are being sent overseas on temporary aasignments, When ‘Sent sbrond on such ascignment, expatriate fice unique challenges. Inrelationship-oriented societies ‘isi, Arab World and Latin America, they need to adopt a personalised approach with employees. The leadersare expected tobe more social, ix with workers, enquire stout their health and be extra cautious ‘thi passing negative remarks against workers. In Arab and African cultures workers expect the bosses to adopt a consultative approach while deciding things. This may not work in Mexieo, where employees donot understand participatory decision-making. In America, candid explanations about why a dessin hasbeen taken might be pereaved a sign of weakness Rewarding tar performers through individual incentive plans may not work in Japan, China or the former Vogolava Likewise, hire and fre policies (quite common in western world) may evoke rong negative reaction in Europe, Mexic, Indonesia, India ete, where workers ae protcted by strong labour laws and unie rues, mma as ee on in src compels he rreanabe he te Fat he ren acd ht ime and nt moe mace. The pate hot sgt has hese eens ny Eee Be enh ‘ports noes Agnin, there should be no attempt to contol the wrong things. As L. Daft reported, “A Sears manager in Hong Kang insated that employees come to work on time instead of 16 minutes at, The emplayess did exactly aa they were tad, but they also left on time instend of working into the evening se they had previously. Alot of work wat let unfinished. The manager eventuallytold the employees to go back to their old waye!” Managing ina foreign county, therefore, canbe very taxing and the challenges seem to ‘be mounting as companies try to expand thir operations and build networks across the globe. Box 30, ow ttoogean fntane Mor cl ees (wh carey een Srgtos, de, vats, tes an ays fg ings) ilennium, the traditionally concsived and practiced ladesship skills donot seem to produce results. Adler end her collegues have listed some ofthe transnatioral skills that are needed for the rewly emerging global economy: Summarised in Table 301, the conpetencis forthe trananaticnal ‘manager go wellteyond the traditional approsches used by inter tabte 30.1 | rensatonaty Competent anages Taser Si | Tamatoalycompmatmanaes | Tail aie aR Sratchomig [> Ya nant een fom eae |» We nin andere pope eho Sonam cauerunaonsicy | onoespeay esas | Sparassnasrareenen”™ 7 |" Sato gaceesona care ‘a Sea ces as ov | inc cen nc wt yo eh Giekaatectaae * [Bagmonnr Se ee eae | Eno rt an ee | Defining International HRM (IHRM) “Generally speaking thereare three sources of employes or an international assignment. The organisation might choot ta hire: «Host country nationals (HCN) Als calle local nationals, they are the employees from the {neal population. A worker from Bihar emplayed by an American frm opereting in India would be considered a host country national + Parent or home country nationals (PCNs): Also called expatriates, they are the people sent from the country in which the orgunsaton is eadqusrtered. An Amerian manager on assignment {nadia ison expatriate © Third country nationals (TCNs): TONs are (fom a country other than where the parent Grganianions headquarters or operations are located, Ifthe American fim employs a manager ftom Great Britain t faclities in India, he would be considered athird count national ‘According o PW Morgen, International HRM lathe result of an interplay among the three dimensions Human remurce ectiviie, types af employees and countrise of eperation® The complexities of operating in varigus counties and employing differnt national categories of workers isan important variable that Aieretites domestic and international HRM, rather than any major derences between FIRM activities performed. Broadly stated, IHR isthe prooser of precuring, allocating and eectively utilising human ‘esourees in a multinational corpartion’ When compared to domestic human resources management, {he scope of IHRM is very wide. Por example, while compensating people in India, the American MINC mist kenpin mind the expetations of locals, the competitar'scompenscin structure, taxation problems atepatrnies, TON'sacprations and act of other Irae that have a brarng onthe paycheof employees posnecrng diffrent lls and having differen ultra backgrounds (bts within and outside the county) HRM, thus, reqiresa much broader perspective encompass a greater scope of activities andi subject touch greater challenges than is domestic HRM, tiguere 30.1 [Pet ot rena RGAE EEE Ne rt aaron | Ce Cultural Differences and HRM ‘The important global pressures impacting HR practices in MNCs have grown in number, variety and Complenty in ecent times - thank tothe changes in information tachnology, dismantling of tarts Siferentated labour laws, cultural and language barriers, bargaining practices et. Getting the right Dovple with requisite ails, motivating Unem to ascept the challenger in a foreign locale and extending Family suport through culfural orientation, language training and wluction assistance have become truly demanding®, Let's examine these issues more closely.