436 – Global Human Resources

Management RAMARAJA INSTITUTE OF TECHNOLOGY & SCIENCE

UNIT - I In simple terms, IHRM is concerned about

Q::: What do you mean by International Human
Resource Management ?
managing human resources at Multinational
Companies (MNC) and it involves managing 3
types of employees namely,
1. Home Country Employees – Employees
belonging to home country of the firm where the
corporate head quarter is situated.
2. Host Country Employees – Employees
belonging to the nation in which the
subsidiary is situated.
3. Third Country Employees – These are the
employees who are not from home country/host
country but are employed at subsidiary or corporate
head quarters.

Prepared by: A Suma Latha, B.Sc., MBA. | Assistant Professor, RITS. 1

 436 – Global Human Resources
Management RAMARAJA INSTITUTE OF TECHNOLOGY & SCIENCE

UNIT II
Q::; What is Culture and explain about Hofstede’s
Model ?
Definitions of culture:
Culture is
• shared by all members of a social group
• passed on by older members to the younger
ones
• determined by the behaviour of the members
and characterized by the perceptions

Kluckhohn & Kroeber def. of culture:

• culture consists in patterned ways of:
thinking, feeling, reacting
• acquired and transmitted mainly by symbols
• constituting the distinctive achievements of
human groups including artefacts
• essential core: traditional ideas & attached
values

Hansen’s 4 elements of culture:

• Standardization of...
- communication
- thought
- feeling & behaviour
GLOBE’s 9 culture dimensions
-

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 436 – Global Human Resources
Management
1) Institutional collectivism
The degree to which organizational and societal
institutional practices encourage and reward
collective distribution of resources and collective
action
2) In-group collectivism
The degree to which individuals express pride,
loyalty, and cohesiveness in their organizations
or families
3) Uncertainty avoidance
The extent to which a society, organization, or group
relies on social norms, rules, and procedures to
alleviate the unpredictability of future events
4) Power distance
The extent to which the lower ranking individuals
accept and expect that power is distributed
unequally
5) Gender egalitarianism
The degree to which a collective minimizes gender
inequality
6) Assertiveness
The degree to which individuals are assertive,
confrontational, and aggressive in their
relationships with others
7) Performance orientation
The extent to which a community encourages and
rewards innovation, high standards, excellence,
and performance improvement
8) Humane orientation
The degree to which an organization or society
encourages and rewards individuals for being
fair, altruistic, friendly, generous, caring, and
kind to others
9) Future orientation
The degree to which a collectivity encourages and
rewards future-oriented behaviors such as
planning and delaying gratification.
Hofstede’s (Cultural Dimensions) Model
Hofstede is most well known for his work on
four dimensions of cultural variability, commonly
referred to as "Hofstede's Dimensions."
These dimensions were arrived in his 1980
publication, "Culture's Consequences: International
differences in Work-related Values."
Hofstede’s 6 culture dimensions:
1) Power Distance:
Extent to which less powerful members of a society
accept and expect that power is distributed unequally
(level of distance accepted)
low: Scandinavia high: Russia
2) Uncertainty Avoidance:
Extent to which the members of a society feel
Prepared by: A Suma Latha, B.Sc., MBA. | Assistant Professor, RITS.
RAMARAJA INSTITUTE OF TECHNOLOGY & SCIENCE
uncomfortable with uncertainty and ambiguity
low: US high: Germany
3) Feminity Vs. Masculinity:
Extent to which a society prefers masculine (e.g.
achievement, heroism, assertiveness) e.g.
arabic countries; US
or feminine (e.g. cooperation, modesty, care
taking) traits e.g. Scandinavia
4) Individualism Vs. Collectivism:
Extent to which individual initiative and caring for
oneself is preferred by society as opposed to caring
for others (I vs. We)
5) Confucianism Or Long-Term Orientation:
Reflects a basic orientation in the life of people
which can be either long-term or short-term
6) Indulgence Vs. Restraint:
Extent to which a society allows free gratification
or suppresses it
Steps in Organizational Culture Change
There are three major steps involved in changing an
organization’s culture.
 Understand the Current Culture –It must
first understand the current culture, or the
way things are now. Mission, vision, and
values provide a framework for the
assessment and evaluation of the current
organizational culture, the organization
needs to develop a picture of its desired
future
 Decide on New Culture – Understanding
the current organizational culture, the
organization must then, and decide what the
organizational culture should look like to
support success.
 Make Individuals Understand – Finally, the
individuals in the organization must decide
to change their behaviour to create the
desired organizational culture. This is the
hardest step in culture change.
Q::: What is cross Culture, how do you
manage across culture?
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The term “cross-cultural” emerged in the social Level - 5: Manipulative: These people prefer
sciences in the 1930s, largely as a result of the Cross- materialistic gains, seek status and manipulate others.
K Beliefs Level - 6: Socio-metric: These people prefer to go
N along with others rather than differently from others.
O
W Level - 7: Existential: These people tolerate
Values Culture
L ambiguity and also people with different values than
E Behaviour those they possess to a greater extent. They prefer
D flexible policies. They don't emphasise on status
G Attitudes symbols and use of power.
E cultural Survey. Cross-cultural may refer to -
Attitude: Attitude is defined as, "a learned
predisposition to respond in a consistently favourable or
Fig. 1.4: Influence of Cultural Factors on unfavourable manner with respect to a given object."
Attitudes are evaluative statements – either favourable or
Formation of Culture unfavourable – concerning objects, people or events.
Cross-cultural studies which is essentially a They reflect how one feels about something. Thus,
comparative tendency in various fields of cultural components of attitudes include:
analysis
Unit III
Cultural factors influence the cultural formation and thereby
Q:: Explain about Recruitment and Selection
behaviour as presented in Fig. 1.4.
in IHRM?
Knowledge: People gain knowledge from the influence
of environmental factors as well as interaction with A truly international HR department would insist on
the environment. hiring people from all over the world and place them
Eg; readings of various books, journals, magazines throughout the international business operations of
and news papers and interaction with the people at work the organization.
as well as social spheres.
Approaches to Recruitment in IHRM
Beliefs: Belief is a cognitive representation of one's
relevant environment may be right or wrong, good or
bad and cause and effect relationships.
Value: Value is an "enduring belief that a specific mode
of conduct or end state of existence is personally or
socially preferable to an opposite or converse model of
conduct or end-state of existence.” Some studies have
categorized values in the following hierarchy:
Level - 1: Reactive: These people react only to
basic physiological needs. Therefore, they are not
really aware of themselves or others as human
beings.
Level - 2: Tribalistic: These people are strongly
influenced by tradition and are dependent upon
others.
Level - 3: Egocentrism: These people are aggressive,
selfish and power- responsive.
Level - 4: Conformity: These people can't tolerate
ambiguity and are uncomfortable with people
possessing values that are different those of them.

Prepared by: A Suma Latha, B.Sc., MBA. | Assistant Professor, RITS. 4

 436 – Global Human Resources
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Recruitment Methods
 Head Hunting – is recruiting the top
management executives, who are highly skilled and
resourceful and whose contribution to the
organization leads to success or these employees are
the competitive advantage of the organization.
 Cross National Advertising – Now world is
a global village and as part of globalization, labour
migration is more common and accepted all over the
world. At present many companies seek to carry out
cross border when they are recruiting staff.
 E-Recruitment – Is the process of personnel
recruitment using electronic resources, in particular the
internet. Using database technologies, and online job
advertising boards and search engines, employers can
now fill posts in a fraction of the time.
International Selection
The selection criteria for international jobs usually
revolve around the five core areas of behaviour,
attitudes, skills, motivation and personality.
International firms, while choosing employees for
overseas operations, usually prefer people with
Technical Ability
 Person‘s ability to perform the required tasks
 Research has indicated that MNC‘s give
highest importance to technical and
managerial skills
 Candidates past performance is checked
Prepared by: A Suma Latha, B.Sc., MBA. | Assistant Professor, RITS.
RAMARAJA INSTITUTE OF TECHNOLOGY & SCIENCE
Cross-Cultural Suitability
 Ability to operate in new environment
 Cultural empathy, adaptability, diplomacy,
language ability, positive attitude, emotional stability
and maturity are important factors
 Big five model can be used to test personality
Family Requirements
 It ia accepted that the contribution of family
especially the spouse, makes to the success
of overseas assignment
 Settlement of family into new home and
environment
 Leaving of friends, relatives and social
networks
 Wellbeing of education of children
 Accompanying partner‘s career
 Problems of ageing parents
Country / Cultural Requirements
 International firms may have to demonstrate
that an HCN is not available before the host
government will issue the necessary work
permit and entry visa for the desired PCN or
TCN
 Expatriate selection may be needed when host
country blocks transfers
 Some countries may give work permit to
expatriate only
 Some regions may be considered ―hardship
postings‖
Language
 Ability to speak the local language
 Important for non-English speaking countries,
knowledge transfer is critical
 Common corporate language may be the
selection criteria
Q:::What will be the issues for Repatriation in
career and Re – Entry?
Repatriation:
 Process that the returned
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employee goes through, when he/she
returns from being in a foreign country to
home country
 private and occupationally-related dimensions of
this process have influence
danger of second culture-shock
Process Model of Reintegration by Hirsch (2002):
 Phase A: naive integration (< 6 months):
- happy to be home, exciting, doesn’t
recognize problems
- willingness and openness for new
experiences, euphoria
 Phase B: reintegration shock (6-12 months):
- find ways to connect to home
culture, situation in company
doesn’t feel like home
anymore as everything
changed
- feeling of not being understood
 Phase C: real integration (> 12 months):
- developing realistic expectations,
adjustment
- recognition of old behavior
Repatriation activities & practices:
 recruitment & selection
 pre-departure training
 on assignment
 reassignment
training to overcome shocks
Pre-departure:
- assignment
- communication
protocols
- web and media
contacts for context
- training and
orientation
Prepared by: A Suma Latha, B.Sc., MBA. | Assistant Professor, RITS.
RAMARAJA INSTITUTE OF TECHNOLOGY & SCIENCE
During assignment:
home leave
work-related information
exchange
ongoing information with
sponsor (HQ to stay
updated)
pre-return orientation
Upon return:
new assignment (job)
organizational
reconnection
assistance with non- work
factors
share experience
 new balanced integrated
global perspective
Re-entry and repatriation problems:
 „out-of-sight – out of mind“ during the stay
in a foreign country
insufficient career- planning
 negative influences of foreign
assignments on the career (most
in US-MNEs, less in Europe)
 expertise of the returner is obsolete due to
technological advances in the headquarters
Turnover rates of repatriates:
 22% expats leave company during an
assignment (not always fault of company,
dissatisfaction, new job etc.)
 28% left within 1 year of returning from an
assignment
another company can benefit from investment
Individual reactions to re-entry:
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Repatriation from MNE’s perspective:
Linking repatriation process to outcomes:
Knowledge & skills acquired from international
assignment:
1. Market specific knowledge:
- local systems (political, social,
economic)
- language
- customs
2. Personal skills:
- intercultural knowledge
- self-confidence
- tolerance
leaving comfort-zone
3. Job-related management skills:
- communication
- project management
- problem solving (different cultural
context)
4. Network knowledge:
- meeting diverse people (contacts)
5. General management capacity:
- broader job responsibilities
- exposure to other parts of the
organization (higher career level)
Designing a repatriation program:
Topics covered by a repatriation program:
 preparation, physical relocation and
transition information
 financial and tax assistance
 re-entry position and career path assistance
Prepared by: A Suma Latha, B.Sc., MBA. | Assistant Professor, RITS.
RAMARAJA INSTITUTE OF TECHNOLOGY & SCIENCE
 reverse cultural shock
 school systems and education (children)
 stress management, communication-related
training
 establishing networking opportunities
 help forming new social contacts
Strategies for smooth re-entry:
 pre-departure briefings on what to expect
 multiple career planning sessions
 written agreements clarifying available
assignment upon return
 extended home visits to keep up with social,
family and organizational changes
 personalized financial and tax advice
 providing an adjustment period upon return
 visible and concrete expression of
repatriate’s value to firm
Unit IV
Q:::What is International Compensation
Management ?
Compensation is increasingly seen as:
 mechanism to develop & reinforce a global
corporate culture
 primary source of corporate control
 explicitly linking performance outcomes
with associated costs
Types of foreign assignments:
(most: 1 to 5 years more complicated, someone else
in charge of salary)
Objectives of international compensation policies:
 Should be consistent with overall strategy,
structure and business needs of the MNE
 Must attract and retain staff in areas where
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the MNE hast he greatest needs & opportunities
 Should facilitate the transfer of
international employees in the
most cost- effective way for the
firm
 Must give due consideration to equity & ease of
administration
International employee expectations:
 financial protection in terms of benefits,
social security & living costs in the foreign
location (same or better standard of living)
 opportunities for financial advancement
through income & savings
 housing, children’s education & recreation
will be addressed (comparable to home)
 career will be advanced
Expenditures of expatriates and their families:
 Products and Services:
- expenditures for things like groceries,
hygiene products, clothes, household
furnishings, transportation or medical
provisions
 Living:
most important connected to main place of
residence
 Income Tax:
payments to the government/administration
 Reserve:
contributions to savings, payment of
benefits, contribution to pension plan,
investments, social security, children’s
education
 Shipment and Storage:
- shipping and storing personal and
household objects (relocation)
Components of international compensation for
expatriates:
Key components for expatriates:
1) Base salary:
amount of cash compensation serving as
benchmark for other compensation elements (e.g.
bonuses)
may be paid in local or home currency
2) Foreign service inducement & hardship
allowance:
compensation for challenging locations
Prepared by: A Suma Latha, B.Sc., MBA. | Assistant Professor, RITS.
RAMARAJA INSTITUTE OF TECHNOLOGY & SCIENCE
(the more difficulties, the higher to bonus)
- more commonly paid to PCNs
3) other allowances:
- cost-of-living (BigMac), housing, home leave
(visits to home country), education, relocation,
spouse assistance (income loss by partner)
4) Benefits/premium:
- health care
- pension plans
- life insurance
- child allowances (money from state)
- profit sharing
Q::: Explain about International Industrial
Relations.
Factors underlying historical differences in trade
unions between countries:
 Mode of technology & industrial
organization at critical stages of union
development
 methods of government union regulation
 ideological divisions withing the trade union
movement
 influence of religious organizations on trade
union development
 managerial strategies for labor relations in
large corporations
Factors underlying differences in trade unions
between companies:
 industrial relations policies & practices of
MNEs
 degree of inter-subsidiary production
integration
 nationality of ownership of the subsidiary
 international HRM approach
 MNE prior experience in industrial relations
 subsidiary characteristics (role of
subsidiary)
 characteristics of the home product market
 management attitudes towards unions
Trade unions & international industrial relations:
Trade unions limit MNE strategies:
 influence wage levels
 constrain the ability of MNEs to vary
employment level at will
 hinder or prevent global
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integration of operations of
multinationals
Trade unions concerns about MNEs:
 MNEs ...
have formidable financial resources
- have alternative sources of supply
 Can move production facilities to other
countries
 Have a remote locus of authority
 Have production facilities in many industries
 Have superior knowledge & expertise in
industrial relations
 Have the capacity to stage an „investment
strike“
bad one, can just move to new market (lot
of power) etc.
work counsil only concerned about
employee rights, security conflicts!
good or bad (work counsils, trade
unions)?
 Need of regulations fight for rights of
employees
 But members of work counsil can
also betray and only fight for their
own benefits (not all behave in
ethical manner, also management
need for control)
 Without decisions could be taken faster
Three trade union responses:
1) International trade secretariats (ITSs) want
to achieve transformational bargaining by:
- research & information
- calling company conferences
- establishing company councils
- companywide union-management
discussions
- coordinated bargaining
sometimes too short term
agreement of company in real threat
2) Lobbying for restrictive national legislation
3) Regulation of MNEs by international
organizations (OECD, EU)
UNIT V
Q:::: What are IHRM Trends and Challenges in
future?
IHRM Trends & future challenges:
Topics that are not emphasized in the general IHRM
Prepared by: A Suma Latha, B.Sc., MBA. | Assistant Professor, RITS.
RAMARAJA INSTITUTE OF TECHNOLOGY & SCIENCE
literature:
 international business ethics
 mode of operation (ecological footprint,
renewable resources, fair wage level
corporate social responsibility etc.)
 NGOs
 emerging role of IHRM in contributing to
safety & security and dealing with terrorism
International business ethics & HRM:
 Ethical relativism:
- no universal or international rights
or wrongs
 Ethical absolutism (only country with high
standards):
- one should do what one would do at
home
 Ethical universalism (most choose, depends
on local conditions):
- there are principles of right &
wrong which transcend cultural
boundaries
e.g. fair trade union etc.
Bribery & corruption in international business:
 paying agents to do things
inconsistent with the
purpose of their position so
as to obtain an unfair
advantage (Bestechung)
 different acts & conventions OECD,
FCPA (US foreign corrupt practices act)
but leeway of what is corruption
lowest corruption rates: Denmark, New
Zealand, Singapore, Finland
Non-Governmental organizations (NGOs):
 globalization has increased the scale &
importance of NGOs continues
 examples: Red Cross, Medecins Sans
Frontieres
Safety, security & counterterrorism:
5 MNE corporate risk areas:
 in-facility emergency & disaster
preparedness
 in-facility security
 industrial espionage (competitors)
 cyber terrorism
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 fire & travel risks

prepare employees (world gets more
insecure)
Q::: Explain the Strategic International Human
Resource Management?
Strategic IHRM is defined as “Human
Resources, management issues, functions and policies
and practices that result from the strategic activities of
the Multinational Enterprise and in impact it has on the
international concerns and goals of that organization.

Prepared by: A Suma Latha, B.Sc., MBA. | Assistant Professor, RITS. 10