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Human Resources Planning for Global Expansion

Chapter 13

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Hospitality and Tourism Is a Global Industry

Stages of Global Expansion1. Domestic operator

2. Market expansion to foreign countries

3. Use of subsidiaries and/or joint ventures

4. Multinational organization

5. Transnational organization

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Hospitality and Tourism Is a Global Industry

Mode of Entry – The process by which a hospitality organization begins a business in another country.

Subsidiaries – A foreign company operated by a domestic hospitality organization with majority (more then 50%) ownership by another (parent) company.

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Hospitality and Tourism Is a Global Industry

Joint venture – A foreign branch partially owned by the domestic organization, and partially owned by an entity in the host (foreign) country. Ownership could be a company, several companies, one or more individuals, and/or the government.

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Hospitality and Tourism Is a Global Industry

Multinational Organization – A hospitality organization with operating units in many countries and regions of the world.

Transnational Organization – A company with operations throughout the world that features highly de-centralized decision-making, is less aligned with its country of origin, and which may have weak ties to any specific country.

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Cultural Factors Impact International Operations

Culture – A set of learned beliefs, values, and behaviors that influence the way of life shared by the members of a society.

Organizational culture – A set of understandings shared by members of an organization that are relevant and distinctive, that are passed on to new group members, and that influence organizational decision-making.

Socio-cultural – Relating to social and cultural matters.

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Cultural Dimensions Impact Hospitality Operations

Country cluster – The notion that some countries can be grouped together based upon their population’s characteristics such as language, location, ethnicity, religion, and economic status.

Cultural intelligence – The process by which one learns about a culture, and adjusts thinking and behavior responses when interacting with persons from the culture.

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Cultural Dimensions Impact Hospitality Operations

Hofstede’s five cultural dimensions: Power distance Individualism Risk avoidance Rigid gender roles Past, present and future orientation

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Cultural Dimensions Impact Hospitality Operations

Generally accepted “truths” in the US that are not universal: Pay for performance is best Formal objectives should drive

management actions Human resources management

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Focus on International Assignments

The political environment Economic concerns

Exchange rate – The rate at which the money of one country is exchanged (traded) for that of another country.Inflation – The economic condition that exists when prices charged for products and services increase throughout a country.

Cultural environmentCulture shock – The feeling of disorientation, and an inability to adjust to a cultural environment that is different from one’s own.

Concerns for a manager interested in an expat position:

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Focus on International Assignments

Cultural sensitivity Interpersonal skills Managerial flexibility Adaptive leadership International motivation Intercultural

competence Ability to work with

limited resources

Important skills for international hospitality managers:

Understanding of

international business Interest International etiquette Stress management Functional skills Technical skills

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Focus on International Assignments

Cross-cultural adaptability – The extent to which a person can be comfortable in a different culture.

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Focus on International Assignments

Concerns that may arise when an expatriate returns from a global assignment: Next assignment Reverse culture shock – Emotional

and physiological re-adjustments that can occur as one returns from an international assignment.

No recognition for global assignment

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Managing Employees During Global Assignments

Use Locals or Expatriates?

Advantages and disadvantages of each…