Copyright ©2014 Pearson Education, Inc.

9-1
 Chapter Learning Goals

1. Understand the strategic importance to

the firm of the IHRM function and its
various responsibilities.
2. Learn about the major staffing options
for global operations and the factors
involved in those choices.
3. To appreciate the challenges involved in
staffing operations in emerging market
countries

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 Chapter Learning Goals

4. Emphasize the need for managing

the performance of expatriates
through careful selection, training,
and compensation.
5. Discuss the role of host country managers
and the need for their training and
appropriate compensation package.
6. Distinguish among various IHRM
practices around the world.

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 Opening Profile: Staffing Company
Operations in Emerging Markets

BRIC Countries

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 Chapter Learning Goals

Understand the strategic

importance to the firm of the
IHRM function and its various
responsibilities.

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 Opening Profile: BRIC—The Shortage of
Mid/Upper-Level Managers

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 Opening Profile: What Attracts the
Potential Recruits in Emerging Markets?

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 Major Challenges in IHRM

1. Enhancing global business strategy

2. Aligning HR issues with business strategy
3. Designing and leading change
4. Building global corporate cultures
5. Staffing organizations with global leaders

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 IHRM Functions

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 Chapter Learning Goals

Learn about the major staffing

options for global operations and
the factors involved in those
choices.

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 Staffing for Global Operations

Ethnocentric Approach Polycentric Approach

Used at Often used with
internationalization multinational
stage of strategic strategy
expansion, with Host-country
centralized structure nationals (HCNs)
Parent-country
nationals (PCNs)

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 Staffing for Global Operations

Global Staffing Approach Regiocentric Approach

Third country Can produce a mix

nationals (TCNs) of PCNs, HCNs, and
Transpatriates TCNs
Inpatriates: managers
with global experience
who are transferred to
the organization’s
headquarters country
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 Strategic Mode, Organizational Variables,
and Staffing Orientation
Aspect of
Ethnocentric Polycentric Regiocentric Global
enterprise
Strategic
International Multidomestic Regional Transnational
orientation
Locals used
Expatriates Regional Best people
for key
Perpetuation used for key people used used
positions
positions regionally anywhere
locally
Home
Evaluation Determined Determined Globally
standards
and control locally regionally integrated
applied
Based on
Based on
High at home; contribution to
contribution to
Rewards low in Wide variation local and
regional
subsidiaries worldwide
objectives
objectives

9-10 Copyright ©2014 Pearson Education, Inc.

 Chapter Learning Goals

To appreciate the challenges

involved in staffing operations in
emerging market countries

Copyright ©2014 Pearson Education, Inc.

9-14 publishing as Prentice Hall
 MNC Staffing

 Most MNCs start from their own pool of

managers  polycentric or regiocentric policy:
Increasing pressure from local governments to hire
locals
The greater cost of expatriate staffing
Improvement in managerial and technical
competence
“all things being equal, a local national who speaks
the language, understands the culture and the
political system, and is often a member of the local
elite should be more effective than an expatriate
alien”

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 Global Mind-set Attributes for Successful
Expatriates
Intellectual capital
Psychological capital
Social capital

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 Chapter Learning Goals

Emphasize the need for managing

the performance of expatriates
through careful selection,
training, and compensation.

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 Managing Expatriates: Selection

Success
categories

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 Managing Expatriates: Selection

Predictor
s of
success

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 Expatriates Performance Management

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 Expatriates Performance Management

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 Expatriate Training and Development

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 Expatriate Training and Development

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 IHRM Process to Maximize Effectiveness
of Expatriate Assignments

To improve IHRM
process
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 Cross-Cultural Training

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 Culture Shock

1. Honeymoon
2. Irritation and hostility
3. Gradual adjustment
4. Biculturalism

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 Training Techniques

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 Corporate Programs to
Develop Global Managers

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 Integrating Training with
Global Orientation
Export Stage Multidomestic Stage
 Training need: low to  Training need: moderate
moderate to high

 Content: interpersonal
 Content: interpersonal
skills, culture, technology
skills, culture, customer transfer, business
values, business behavior practices and laws

 HCNs: train to understand  HCNs: familiarize with

parent-country products production and service
and policies procedures

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 Integrating Training with
Global Orientation
Multinational Stage
 Training need: high
moderate to high
 Content: interpersonal
skills, two-way technology
transfer, corporate value
transfer, strategy, stress
management, culture,
business practices
 HCNs: training in technical
areas, products and
services, corporate culture
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Global Stage
 Training need: high
 Content: global corporate
operations, corporate
culture transfer, customers,
global competitors, strategy
 HCNs: training in
proficiency in production
and efficiency systems,
corporate culture, business
systems, global conduct
policies
 Factors that Influence the Integration of
Expatriates with Local Staff
Facilitates Integration Hinders Integration
 Forming close working  Not using team concept
relationships  Not learning local
 Learning local language language
 Transferring  HQ mentality
technical/business  Spouse/family adjustment
knowledge
problems
 Cultural adaptability
 Being autocratic
 Respect
 Limited time in
assignment

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 Chapter Learning Goals

Discuss the role of host country

managers and the need for their
training and appropriate
compensation package.

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 Compensating Expatriates
 DuPont’s Global Transfer  The balance sheet
Center of Expertise approach
creates perceptions of
equity and goodwill.  Tax equalization

 Companies are looking for

 Components of the
ways to cut the costs of compensation package:
expatriate assignments. salary, taxes, allowance,
benefits
 The need to reconcile
parent- and host-country
practices adds complexity.

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 Components of the Compensation Package

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 Exhibit 9-10

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 Chapter Learning Goals

Distinguish among various IHRM

practices around the world.

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 Training HCNs

Facilitates indigenization

Links successful corporate culture and local

culture

Facilitates e-business adoption

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 Management Focus: Success! Starbucks’
Java Style in Beijing

Challenges: recruiting, motivating, and

retaining Beijing managers
Chinese recruits want training and
advancement opportunities more than
money.

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 Management Focus: Success! Starbucks’
Java Style in Beijing
Recruits are trained in management and in
Starbucks’ culture
Three months in Seattle
Make coffees in a real store
Training, and resulting trust and
participation, also serve as motivators

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 Compensating HCNs

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 Comparative Management in Focus:
Compensation

“Best Regional Country

Practices” Clusters Specific

Incentives not Asian and United States

too large, pay Latin countries uses less
based on use more incentives than
individual seniority pay, expected,
performance, group/team China and
reduce pay, and pay Taiwan use
seniority pay for future goals more

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 Comparative Management in Focus:
Selection

“Best Regional Country

Practices” Clusters Specific
Anglo cluster
Japan looks at a
focuses on
person’s
“Getting along technical skill,
potential; Korea
with others” and work
relies on
“Fit with experience;
employment
corporate Korea, Japan,
tests; Taiwan
values” and Taiwan
relies on
deemphasize
interviews
work experience
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 Conclusion

 Global HR management = vital component of

global strategy
 Strategies = ethnocentric, polycentric, regio-
centric, and global
 Many causes of ex-pat failure: inadequate
preparation, inability to adapt, lack of HQ
support for repatriation, etc.
 Cultural training, language instruction,
familiarity with everyday matters  training is
needed
 Compensation must be carefully designed

9-43 Copyright ©2014 Pearson Education, Inc.

All rights reserved. No part of this publication may be reproduced, stored in a
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mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.

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