International Strategies in HR

Prepared By:
Ajit Dhawale
Nishu Chugh
Rahul Kothari
Rahul Ransure
Renu Makhijani
Swati Nikalje
your name
 International Imperative
• Why organizations expand internationally
– Market opportunities
– Economies of scale by expansion
– Keep up with industry leaders.
– Acquire ownership of foreign-based
organization or subsidiary

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 Major differences between domestic
HRM and IHRM
• Business activities

• Increased complexities

• Increased involvement in employee’s personal life

• Complex employee mix

• Increased risks

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Chris Chan
 Stages of Internationalization
• Stage 1: Domestic Operations
– Firms offer products or services that are designed to
primarily serve consumers in the domestic market (e.g.,
law firms)

• Stage 2: Export Operations

– Products and services are opened up to markets in other
countries, but production facilities remain in Canada
(e.g., McCain Foods).
– HRM: Provides sales force with skills and motivation to
succeed in these foreign markets.

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 Stages of Internationalization
Stage 3: Subsidiaries or Joint Ventures
• Some operational facilities (e.g., parts assembly) are
physically moved to other countries.
• Corporate headquarters in home country has high control
over foreign operations.
• HRM: Provides expatriates and local employees with
knowledge and skills to succeed in the foreign country.

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 Stages of Internationalization
Stage 4: Multinational Operations
• Much more prevalent international dispersion of production
and service provision facilities.
• Decentralization of decision-making more prevalent, but
“major” personnel decisions still made within home country.
• Expatriates still primarily manage foreign facilities.

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 Stages of Internationalization
Stage 5: Transnational Operations
• Little allegiance to the firm’s country of origin.
• Large-scale decentralization of decision-making.
• Dominant role of expatriates is removed.
• Each business unit across the globe has the freedom to make
and implement its own HRM policies and practices.

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 Four Approaches to IHRM
Make strategic decision as to level of standardization
desired across locations
– Ethnocentric approach
• Exporting organization’s home country practices
and policies to foreign locations
– Polycentric approach
• Allowing each location to develop own
practices and policies

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Copyright © 2005 South-Western. 1–8
 Four Approaches to IHRM
– 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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Copyright © 2005 South-Western. 1–9
 4 Basic Tasks

 Staffing policy
 Management training & development
 Performance appraisal
 Compensation policy

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 Staffing Policy
• Selection of employees for particular jobs

• Tool for developing and promoting corporate culture

(norms & value system) to attain higher performance
• Expatriate Managers

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 Training & Development
• Training for specific job & management development
• Job transfers
• Training expatriate manager & spouse
• Repatriation of Expats
• Management development as a strategic tool – especially
transnational

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 Performance Appraisal
• Two groups usually evaluate the performance of expats –
host nation & home office managers. Both are subject to
bias
– More weight should be given to on-site manager
appraisal than off-site (soft variables)
– Former expat who served in country could be involved in
the appraisal
– When on-site prepares, off-site should be consulted
before it is complete to balance

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 Compensation
• How should compensation be adjusted to reflect
national differences – according to prevailing
country standards or equalize pay on a global basis

• How should expatriate managers be paid ?

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 Strategies for managing a global
workforce
(1) Implement the aspatial career strategy
– Get people from everywhere (geocentric approach)
– Expats work in multiple countries during the course of
their career
– Gain a lot of knowledge about different cultures &
operations
– Develops in-depth knowledge
– Use previous knowledge for new assignment
– Extremely high cost
– Mainly managers, not technicians

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Chris Chan
 Strategies for managing a global
workforce
(2) Implement the awareness-building assignment strategy
– Expose a candidate to cultural training exercises
– Usually for short term (3 months to one year)
– Family members usually not required to relocate
– Usually used to train candidates for future assignments
– Learn from foreign assignment and bring experience
back to HQ

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Chris Chan
 Strategies for managing a global
workforce
(3) Implement the SWAT team strategy
– Highly mobile teams for short term assignments
– Deployed throughout the organization to different parts
of the world
– No development agenda, plain troubleshooting
– Transfer technical knowledge to locals as they fix
problems
– E.g. technical troubleshooters

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Chris Chan
 Strategies for managing a global
workforce
(4) Implement the virtual solutions strategy
– Collection of practices that exploit electronic
communication
– E.g. internet, intranet, videoconferencing, electronic
databases, email, electronic expert systems
– Low cost and very fast in terms of disseminating
knowledge
– Used by Xerox and Ford

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Chris Chan
 Main challenges in IHRM
• High failure rates of expatriation and repatriation
• Deployment – getting the right mix of skills in the
organization regardless of geographical location
• Knowledge and innovation dissemination – managing critical
knowledge and speed of information flow
• Talent identification and development – identify capable
people who are able to function effectively
• Barriers to women in IHRM
• International ethics
• Language (e.g. spoken, written, body)

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Chris Chan
 Thank You !!
Prepared By:
• Ajit Dhawale
• Nishu Chugh
• Rahul Kothari
• Rahul Ransure
• Renu Makhijani
• Swati Nikalje

your name