PGP I

Human Resource Management

International HRM
Prof. Prantika Ray
Organizational Behavior and Human Resources Management
Domestic HRM versus International HRM

Cultural

Labour
Political
relations
Factors Influencing
international HR
practices

Legal Economic

Prof. Prantika Ray 2

Organizational Behavior and Human Resources Management
Cultural distance (Hofstede’s cultural
dimensions)
Power distance: Individualism/ Collectivism Masculinity/ Feminism Uncertainty avoidance Long-term orientation Indulgence

•The extent to which the • On the individualist side
less powerful members of
organizations and
institutions (like the
family) accept and expect
that power is distributed
unequally.
•This represents inequality • On the collectivist side,
(more versus less), but
defined from below, not
from above. It suggests
that a society's level of
inequality is endorsed by
the followers as much as
by the leaders.
•Power and inequality, of
course, are extremely
fundamental facts of any
society and anybody with
some international
experience will be aware
that 'all societies are
unequal, but some are
more unequal than
others'.
•A high score (Masculine)
we find societies in which on this dimension
the ties between indicates that the society
individuals are loose: will be driven by
everyone is expected to competition, achievement
look after him/herself and and success, with success
his/her immediate family. being defined by the
winner/best in field – a
we find societies in which value system that starts in
people from birth school and continues
onwards are integrated throughout organisational
into strong, cohesive in- life.
groups, often extended
families (with uncles, •A low score (Feminine) on
aunts and grandparents) the dimension means that
which continue protecting the dominant values in
them in exchange for society are caring for
unquestioning loyalty others and quality of life.
A Feminine society is one
where quality of life is the
sign of success and
standing out from the
crowd is not admirable.
•The extent to which the
members of a culture feel
threatened by ambiguous
or unknown situations and
have created beliefs and
institutions that try to
avoid these.
•Defined as a society's
tolerance for uncertainty
and ambiguity; it
ultimately refers to man's
search for Truth.
•It indicates to what extent
a culture programs its
members to feel either
uncomfortable or
comfortable in
unstructured situations.
•how every society has to •This dimension is defined
maintain some links with as the extent to which
its own past while dealing people try to control their
with the challenges of the desires and impulses,
present and future, and based on the way they
societies prioritise these were raised. Relatively
two existential goals weak control is called
differently. “Indulgence” and
•Normative societies. relatively strong control is
which score low on this called “Restraint”.
dimension, for example, Cultures can, therefore, be
prefer to maintain time- described as Indulgent or
honoured traditions and Restrained.
norms while viewing
societal change with
suspicion.
•Those with a culture
which scores high, on the
other hand, take a more
pragmatic approach: they
encourage thrift and
efforts in modern
education as a way to
prepare for the future.

Prof. Prantika Ray 3

Organizational Behavior and Human Resources Management
Cultural dimensions

Prof. Prantika Ray 4

Organizational Behavior and Human Resources Management
Legal factors and economic factors

Legal aspects
• Market
• Work councils: formal,
economies
employee-elected groups
Economic • Planned
of worker representatives economies
systems
• Co-determination means • Mixed
that the employees have economies
the legal right to a voice in
setting company policies
Prof. Prantika Ray 5
Organizational Behavior and Human Resources Management
 Understanding International assignments
International • An international assignment is • Noncitizens of the countries in which the employees
assignments/ an overseas task set by a Expatriates
are working
Global company (mostly MNCs) to an
assignments employee.

Host country
• The country where the company’s • Individuals who are the citizens of the host country.
nationals
Home headquarters are primarily located, and is
country the place from where the assignees are sent
out for international assignments
Third country • Individual working is a citizen of a country apart
nationals from the parent or host country
• The country where the company’s
Host subsidiaries are primarily located, and is the
country place to where the assignees are sent out
for international assignments • Moving business processes such as manufacturing
Offshoring
or call-center operation abroad

Purpose of • Control • Groups of geographically dispersed workers who

international • Coordination Transnational/ interact using a combination of telecommunications
assignments • Knowledge transfer virtual teams and informational technology to accomplish an
organizational task

Prof. Prantika Ray 6

Organizational Behavior and Human Resources Management
Management Values and International
Staffing Policy
• The notion that home-country attitudes, management style, knowledge,
Ethnocentric evaluation criteria, and managers are superior to anything the host country
has to offer

Polycentric • A conscious belief that only the host-country managers can ever really
understand the culture and behavior of the host country market

• The belief that the firm’s whole management staff must be scoured on a
Geocentric global basis , on the assumption that the best manager of a specific position
anywhere may be in any of the countries in which the firm operates.

Prof. Prantika Ray 7

Organizational Behavior and Human Resources Management
High context versus Low context cultures

High context refers to societies or groups where people have close

connections over a long period of time. Many aspects of cultural behavior
are not made explicit because most members know what to do and what to
think from years of interaction with each other.

Low context refers to societies where people tend to have many

connections but of shorter duration or for some specific reason. In these
societies, cultural behavior and beliefs may need to be spelled out explicitly
so that those coming into the cultural environment know how to behave.

Prof. Prantika Ray 8

Organizational Behavior and Human Resources Management
International HR practices in brief
Selecting international managers
Testing Realistic Previews Adaptability screening

Training
(depends on the cultural distance between the countries and the level of interaction with the host country)

didactic training culture assimilator language training sensitivity training field experience.

Compensation
Balance sheet approach Split pay approach
•The expatriate enjoys the standard of living that s(he) enjoys back in home. •Half the person’s pay in local currency and half in home-country currency.

Repatriation

Prof. Prantika Ray 9

Organizational Behavior and Human Resources Management
Thank you!
Prof. Prantika Ray 10
Organizational Behavior and Human Resources Management