MGT-351

Human Resource Management

Chapter-17

Managing Global HR
HR and the Internationalization of Business
• The Global Challenges
• Coordinating market, product, and production plans on a worldwide basis.
• Creating organization structures capable of balancing centralized home-office
control with adequate local autonomy.
• Extending HR policies and systems to service staffing needs abroad.

17–2
Challenges of International HRM
• Deployment
• Easily getting the right skills to where they are needed, regardless of
geographic location.
• Knowledge and Innovation Dissemination
• Spreading state-of-the-art knowledge and practices throughout the
organization regardless of their origin.
• Identifying and Developing Talent on a Global Basis
• Identifying those who can function effectively in a global organization and
developing their abilities.

17–3
 Cultural Economic
Factors Systems

International
Human
Three Inter-country Resource
Management
Differences Affecting
Legal and
HRM Industrial
Relations
Factors

17–4
17–5
2. The Economic Environment
‘17,000 tons of Parmesan cheese, with an estimated value of $187
million, are being held in the vaults of the Italian bank Credito
Emiliano. The cheese is collateral from Italian cheese makers
struggling through the recession’

• Free Market Economy - an economic system in which

resources are primarily owned and controlled by the
private sector.

• Planned Economy - an economic system in which

economic decisions are planned by a central
government.

6
3. Political / Legal/ IR Environment
• Risk of operating businesses in nations like Afghanistan,
Congo DRC, Iran, Iraq, North Korea, Somalia, Sudan,
Venezuela, Yemen, and Zimbabwe, risk imposed to
employees.
• Keep in mind that a country’s political/legal environment
doesn’t have to be risky or unstable to be a concern to
managers.
• Just the fact that it differs from that of the home country is
important.
• Issues of legal aspects of labor union.

7
An HR Manager’s Management Values:
• Ethnocentric Attitude - the parochialistic belief that the
best work approaches and practices are those of the
home country, so hire people from home.
• Polycentric Attitude - the view that the managers in the
host country know the best work approaches and
practices for running their business. So hire people from
host nation.
• Geocentric Attitude - a world-oriented view that focuses
on using the best approaches and people from around
the globe. Hire best people regardless of their origin or
culture. The best view to survive today.
© 2008 Prentice Hall, Inc. All rights reserved. 17–8
Staffing the Global Organization: Expats!
• International staffing: Home or local?
• Expatriates (expats)
• Home-country nationals
• Third-country nationals
• Offshoring
• Having local employees abroad do jobs that the firm’s domestic employees
previously did in-house
• Offshoring Issues
• Effective local supervisory/management structure
• Screening and required training for locals
• Local compensation policies and working conditions

17–9
Staffing the Global Organization (cont’d)
Inability of Spouse
Personality
to Adjust

Inability to Cope
Personal Why Expatriate with Overseas
Intentions
Assignments Fail Responsibilities

Family Lack of
Pressures Cultural Skills

17–10
Staffing the Global Organization (cont’d)

Realistic Previews

Careful Screening

Helping Expatriate
Improved Orientation
Assignments Succeed

Cultural and Language Training

Improved Benefits Packages

17–11
Trends in Expatriate Training
• Rotating assignments that permit overseas managers to grow professionally.
• Management development centers around the world where executives hone
their skills.
• Classroom programs provide overseas executives with educational opportunities
similar to stateside programs.
• Continuing, in-country cross-cultural training.
• Use of returning managers as resources to cultivate the “global mind-sets” of
their home-office staff.
• Use of software and the Internet for cross-cultural training.

17–12
Compensating Expatriates
• The “Balance Sheet Approach”
• Home-country groups of expenses—
income taxes,
housing,
goods and services,
discretionary expenses—are the focus of attention.
• The employer estimates what each of these four expenses is in the
expatriate’s home country, and what each will be in the host country.
• The employer then pays any differences such as additional income taxes or
housing expenses.
17–13
Incentives for International Assignments
• Foreign Service Premiums
• Financial payments over and above regular base pay, and typically range
between 10% and 30% of base pay.
• Hardship Allowances
• Payments to compensate expatriates for exceptionally hard living and working
conditions at certain foreign locations.
• Mobility Premiums
• Lump-sum payments to reward employees for moving from one assignment
to another.

17–14
Appraising Expatriate Managers
• Challenges
• Determining who should appraise the manager.
• Deciding on which factors to base the appraisal.
• Improving the Expatriate Appraisal Process
• Stipulate the assignment’s difficulty level, and adapt the performance criteria
to the situation.
• Weigh evaluation more toward the on-site manager’s appraisal than toward
the home-site manager’s.
• If the home-office manager does the actual written appraisal, use a former
expatriate from the same overseas location for advice.

17–15
Repatriation: Problems and Solutions
• Problem
• Making sure that the expatriate and his or her family don’t feel that the
company has left them adrift.
• Solutions
• Match the expat and his or her family with a psychologist trained in
repatriation issues.
• Make sure that the employee always feels “in the loop” with what’s
happening back at the home office.
• Provide formal repatriation services when the expat returns home.

17–16