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International Human Resource

Management (IHRM)

International Management:
an Overview (Master 1)

Yohan Bernard

2009 / 2010

Human Resource Management (HRM)

HR planning Staffing

Performance
Labor relations
management

Compensation Training and


and benefits development

2009 / 2010

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International HRM (Morgan, 1986)

2009 / 2010

International assignments create


expatriates (Dowling and al., 2004)

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Staffing: Ethnocentric approach

Country B
Country A Country C

Country H
Headquarter Country D
(Parent-country)

Country G Country E
Country F

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Staffing: Polycentric approach

Country B
Country A Country C

Country H
Headquarter Country D
(Parent-country)

Country G Country E
Country F

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Staffing: Geocentric approach

Country B
Country A Country C

Country H
Headquarter Country D
(Parent-country)

Country G Country E
Country F

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Staffing: Regiocentric approach

Country B
Country A Country C

Country H
Headquarter Country D
(Parent-country)

Country G Country E
Country F

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Expatriation problems

The job The local insertion

• Responsibilities / Autonomy • Preparation


• Visibility and recognition • Culture shock
• Learning • Local acculturation

• Criticality of the function • Political / social skills

• Global networking

• Support from headquarters

The career The family

• Selection • Adaptation
• Rotation • Education
• Re-entry

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Expatriate Failure Rates


Recall Rate Percent Percent of Companies
US Multinationals
20 - 40% 7%
10 - 20% 69%
< 10 24%
European Multinationals
11 - 15% 3%
6 – 10% 38%
<5% 59%
Japanese Multinationals
11 - 19% 14%
6 – 10% 10%
<5% 76%
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Expatriates’ acculturation (‘the four Fs’)
Expatriate culture shock

Physical differences Cultural differences


Level of
disorientation
Stress
Unease

FLIGHT FIGHT FIT FOLLOW


• Reject • Hostility • Interested • Enthusiast
• Retreat • Disgust • Look for contacts • Adapt local practices
• Insulate • Disapprove • Learn about culture • Local companion

The isolated The militant The cosmopolitan The assimilated


expatriate expatriate expatriate expatriate

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Source: Lasserre (2007)

The six major components of


the expatriation policy

Selection and
Strategic vision
preparation

Career follow up Compensation

Support Tenure

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Source: Lasserre (2007)

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Three modes of transfer policy (Edstrom and
Galbraith, 1977)

 Filling position: the classic policy of expatriation


for key managers and technical support transfer
 Develop manager: a policy designed to utilize
international postings as an instrument of
developing management talents and skill
developments
 Develop organization: the main objective is to
develop the global strategic capabilities of the
company

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Key success factors in international work


assignment (Stahl, 2001)

 Tolerance of ambiguity
 Behavioral flexibility
 Goal orientation
 Sociability and interest in other people
 Empathy
 Non-judgementalness
 Meta-communication skills

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Relative Cost of Living in Selected Cities
Tokyo Frankfurt
Oslo Beijing
Zurich Moscow
Hong Kong Rome
Copenhagen Tel Aviv
Paris Mexico City
London Toronto
New York Prague
Singapore Jakarta
Stockholm Warsaw
Seoul Kuala Lumpur

New York = 100 2009 / 2010 New York = 100

A Typical Balance Sheet


Home and
Host-
Country
Income Income
Taxes Taxes Premiums
and
Incentives
Income Housing Income
Taxes Housing Taxes
Housing Housing
Goods and
Goods and Goods and Goods and
Services Services Services Services
Reserve Reserve Reserve Reserve

Home-country Host-country Host-country Home-country


salary costs costs paid by equivalent
company and
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Source: Deresky (2006) from salary power

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The length of expatriate assignments

 The time needed to learn the rules of business in


the country and to build the relationships
 The importance of personal relationships in the job
and the required continuity of the task
 The contextual hardship of the country
 The company's policy with regard to career
development.

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Repatriation of expatriates

Didn’t know what position they hold upon return.

Firm vague about return, role and career


progression.

Took lower level job.

Leave firm
within one year.

Leave firm within three years

10 20 30 40
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50 60 70 %

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Repatriation of expatriates

Over there, you are the big fish


in the small pond. Back home,
you return to being the small
fish in a big pond.

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The managerial issues in localization

Retention and
Recruitment career
management

Cultural
differences

Reward Performance
practices evaluation

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