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 subsidiary

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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: Hofstedes 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

Quantity versus quality of life (masculinity/femininity)

Emphasis on assertiveness and achievement, as compared to interpersonal relationships

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Assessing Culture

Exhibit 14-1

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Halls 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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Strategic Issues

Exhibit 14-2

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Strategic HR Issues

Exhibit 14-3

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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-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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Setting Strategic HR Standards

Exhibit 14-4

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Repatriation

Exhibit 14-5

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Managing Global Workforce: Challenges and Strategies

Reading 14.1 (Roberts et al.)

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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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 crosssensitivity in high potential employees in short time Utilize expert SWAT teams deployed on short-term basis for operational problems technical projects Adopt virtual solutions by using electronic communication technologies to connect local employees to distant problems

Reading 14.1

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Diagnosing Challenges Deployment challenge

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

Reading 14.1

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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Four Seasons Goes to Paris

Reading 14.2 (Hallowell et al.)

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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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 patterns of behavior Potential to enhance customer value and contribute to competitive advantage

Reading 14.2

Flexibility versus consistency

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Adapting to a Boundaryless 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

Reading 14.3 (Sanchez et al.)

Personality aspects that impede adaptation

Authoritarianism Rigidity

Ethnocentrism

Clarification of expectancies beforehand

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Adapting to a Boundaryless World Need to provide on-going, hands-on training, rather than just pre-departure awareness training 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 Boundaryless 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

Reading 14.3

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Adapting to a Boundaryless World

Reading 14.3

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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