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INTERNATIONALHRM
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International HRMDiferences
• Greater Number ofServices
• Special Services toUnique Group
• CompensationComplexity
• Foreign Exchange Ratettention
• !anguage an" Cultural
#i$erences
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InternationalMergers andAcquisitions
GlobalCometition
Imortance o!Global Human
ResourcesManagement
"oreignHuman
Resources
Mar#etAccess
Oortunities
Increasing Imortance o! GlobalHuman Resources $nderstanding
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Comosition o! t%e CulturalEn&ironment o! International 'usiness
Religionsacre" ob%ectsphilosophicalsystemsbeliefs & normsprayertaboosholi"aysrituals
'echnology an"(aterial Culturetransportationenergy systemstools & ob%ectscommunications
urbani)ationscienceinvention
*alues an" ttitu"es 'o+ar",timeachievement+or-+ealthchangescienti.c metho"ris-/ta-ing
E"ucationformal e"ucationvocational trainingprimary e"ucationsecon"ary e"ucationhigher e"ucationliteracy level
human resourcesplanning
Social 0rgani)ation-inshipsocial institutionsauthority structuresinterest groupssocial mobilitysocial strati.cationstatus systems
!anguagespo-en+ritten languageo1cial languagelinguistic pluralismlanguage hierarchyinternationallanguagesmass me"ia
!a+common la+co"e la+foreign la+home country la+antitrust policyinternational la+
regulation
2oliticsnationalismsovereigntyimperialismpo+ernational interestsi"eologiespolitical ris-
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(e) Issues in InternationalHRM34 5orl"+i"e 6uman Resources
2lanning7 Recruiting an" Selection
7 Expatriate orientation an"training
7 Repatriation7 2erformance appraisal
84 Compensation7 #ealing +ith in9ation an"
unexpecte" changes in exchangerates
7 2rovi"ing su1cient pay to -eepin"ivi"uals
7 Shoul" company pay har"shipallo+ance:
7 #issatisfaction +ith cost of livingallo+ances
;4 6ousing
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(e) Issues in InternationalHRM34 >ene.ts 2lanning
7 #eveloping equity amongemployees
7 Several plans necessary for"i$erent categories of personnel
84 'axation e sensitive to nee"s of receiver
7 Sen" regular +ritten explanations
of policy changes7 2erio"ic rotation of overseas 6R
mana ers "esirable
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Global Manu!acturing
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International Cororation
#omestic .rm thatuses its existingcapabilities to move
into overseas mar-ets4
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Multinational Cororation*MNC+
Firm +hichin"epen"ent businessunits operating in
multiple countries4
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Global Cororation
Firm that ha"integrate" +orl"+i"eoperations through a
centrali)e" homeo1ce4
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Transnational Cororation
Firm that attempts tobalance localresponsiveness an"
global scale via anet+or- of speciali)e"operating units4
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'ypes of 0rgani)ations
GlobalE1ciency
High Global
*ie+s the +orl" as asingle mar-et?operations arecontrolle" centrally fromthe corporate o1ce4
'ransnational
Speciali)e" facilitiespermit localresponsiveness?complex coor"inationmechanisms provi"eglobal integration4
Low @nternational
Uses existing
capabilities to expan"into foreign mar-ets4
(ultinational
Several subsi"iaries
operating as stan"/alone business units inmultiple countries4
Low High
!ocal Responsiveness
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T%e Multi,National
Cororation *MNC+
• 6ome Country
Employment• External Country
Employment
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Managing in a "oreign
En&ironment
• ttitu"es *ary
• (otivational 'oolsare #istinctly#i$erent
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Cultural En&ironmento! International 'usiness
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Clustering NationsAroac%
• Geography
• !anguages
• Religion
• Aob ttitu"es
• 5or-Goals
• *alues
• Nee"s
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Managerial -alues
• Role of Competition
• Role of >lame
• Role of Shame
• Role of 2articipation, Aapan
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.ources o! ManagerialTalent
• 6ome CountryNationals
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Ad&antages o! Diferent .ources
!or O&erseas Managers
HostCountr)
HomeCountr)
T%irdCountr)
•!ess cost
•2reference ofhost countrygovernment
•no+le"ge ofenvironment
•!anguagefacility
• 'alent
available+ithincompany
•Greatercontrol
•Companyexperience
•(obility
•Experienceprovi"e" to
•>roa"
experience
•@nternationaloutloo-
•(ulti/lingualism
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.OME O" THE LARGE.T $/./M$LTINATIONAL.
'&' General Electric (icrosoft
Cisco General (otors 2rocter an"Gamble
Citicorp4 6e+lett/2ac-ar" RAR Nabisco
Coca/Cola @>( 'exaco
#u2ont @ntel Unite" 'echnologies
ExxonB(obil 0il A424 (organ 5al/mart
For" (otor Aohnson & Aohnson Derox
(otorola
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0 Ma1or Reasons !or AmericanE2atriate "ailures in "oreign
En&ironment• @nability of the managers spouse
to a"%ust to a "i$erent culturalenvironment4
• 'he managers inability to a"apt
to a "i$erent physical or culturalenvironment4 0ther family/relate" problems4
• 'he managers personality oremotional immaturity4
• 'he managers inability to cope+ith the responsibilities pose" bythe overseas +or-4
• 'he managers lac- of technicalcompetence4
• 'he managers lac- of motivationto +or- overseas4
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.election Met%ods
• @ntervie+s
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" o3c art o t e .e ect on,Dec s on4rocess
.tart t%e .election 4rocess
Can the position be .lle" by a local national:
@"entify "egree of interaction require" +ithlocal community 7 using a / or / point scaleH
ranging from lo+ to highH in"icate the "egree of
interaction +ith local community require" forsuccessful performance on the %ob4
Select local national an" sub%ect himBher totraining basically aime" at improving technical
an" managerial s-ills4
EmphasisI on tas-s variables4
Secon" but by no means unimportant question
is to as- +hether the in"ivi"ual is +illing toserve abroa"4
@s can"i"ate +illing:
4robabl) not suitable !orosition
EmphasisI on tas- variables
@"entify "egree of similarity B"issimilarity bet+een cultures 7
using a / or /point scaleHranging from similar to highly
"iverseH in"icate the magnitu"eof "i$erences bet+een the t+oculturesH
EmphasisI on JrelationalabilitiesK factor4
JFamily situationK factor mustalso be ta-en into consi"eration4
.tart orientation *mostrigorous+
.tart orientation*moderate to %ig% rigor+
.tart orientation*moderate to %ig% rigor+
4robabl) not suitable !orosition
5E.
NO
5E.
5E. NO
NO
HIGH
LO6
HIGHL5 DI-ER.E
-ER5 .IMILAR
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4rearing !or an InternationalAssignment
Stu"y the follo+ing sub%ects,• Social an" business etiquette4
• 6istory an" fol-lore4
• Current a$airsH inclu"ing relations
bet+een the country an" the Unite"States4
• 'he cultures values an" priorities4
• GeographyH especially the cities4
• Sources of pri"e, artistsH musiciansH
novelistsH sportsH great achievements ofthe cultureH inclu"ing things to see an""o4
• Religion an" the role of religion in "ailylife4
• 2olitical structure an" current players4
• 2ractical matters such as currencyHtransportationH time )onesH hours of
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Cultural .%oc#
• L #isorientation thatCauses 2erpetual
StressL
7 #isorienting @nci"ents
7 @mpossible
Communication
7 'elephone #i1culties
7 Family Frustrations
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.ecial Considerations
• Career #evelopmentRis-s
• Reentry 2roblems
• (anaging Family !ife
• 'errorism
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Recruitment
• GovernmentRegulations
• 5or- 2ermits
Universally Require"
• Recruitment of !ocals*aries
• Guest 5or-ers• Role of ChurchH FamilyH
2olitics
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.election
• (erit *ersus >estFamily
• Family 'ies
• Social Stan"ing• 0rigin
• @n"ustriali)e" versus
!ess #evelope"
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Training Issues
• !ocal Resources
• !ess 'echnicalCapabilities
• pprenticeshipStrengths in Europe
• (anagement
#evelopment
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Comensation
• 6ost CountryEmployees
7 2ro"uction Stan"ar" or
'ime or Combination7 >ene.ts
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E2atriate Comensation
• >ase 2ay
• #i$erentials
• @ncentives
• Company ssistance
• Cost, ;/M times USRate
C ti ! E t i t
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Comensation o! E2atriateManagers
34 2rovi"e an incentive to leavethe unite" states4
84 (aintain an mericanstan"ar" of living4
;4 Facilitate reentry into theunite" states4
M4 2rovi"e for the e"ucation ofchil"ren4
4 (aintain relationships +ithfamilyH frien"sH an" business
associates4
To be efecti&e7 a comensation
rogram must8
C ti El t !
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Comensation Elements o! anE2atriate
• 2rograms use" by most U4S4>ase" (NCs have four elements,
• >ase pay 7 equal to pay of"omestic counterparts incomparably evaluate" %obs4
• #i$erentials 7 to o$set the highercosts of overseas goo"sH servicesHan" housing4
• @ncentives 7 to compensate theperson for separation from familyH
frien"sH an" "omestic supportsystems4
• Company assistance programs 7to cover a""e" costs such asmoving an" storage costsHautomobileH an" e"ucation
expenses4
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T%e 4rice o! an E2atriate
An employer’s typical frst-year expenseso sending a U.S. executive aroad.
Direct Comensation Costs
>ase Salary 3OOP
Foreign/service premium 3P
Goo"s an" services "i$erential 8OP
6ousing costs 8O/MOP
Trans!er Costs
Relocation allo+ance P
ir fare 8P
(oving househol" goo"s 8P
Ot%er Costs
Company Car 3P
Schooling