hrm - excel books - chapter 30

8/9/2019 HRM - Excel Books - Chapter 30

1/20

INTERNATIONAL

HUMAN

RESOURCE

MANAGEMENT

EXCEL BOOKS30-1

30Chapter


2/20

ANNOTATED OUTLINE

30-2

INTRODUCTION

In recent times, the trade barriers between nations have almost

disappeared. Communication links have become faster and cheaper.

There is convergence of consumer tastes also. The scarce resources

of the nations have been moving around freely. In this scenario,

companies have realised the importance of expanding their reach

throughout the globe, integrating their production, finance, marketing

and research activities in a careful way. In a way, this would mean

sending and more and more employees overseas on temporary

assignments. When sent abroad on such assignments, expatriates

face unique problems

International Human Resource Management


3/20

30-3

The world is full of statelesscorporations


Nestl (Switzerland): Nestl personifies the stateless corporation with 98 per cent

of sales and 96 per cent of employees outside the home country. Nestls previous

Global CEO was German born H. Maucher, and half of the company's general

managers are non-Swiss. Maucher put strong emphasis on hiring local managers

who are native to the region and know the local culture. The combination of strong

brands and autonomous regional managers has made Nestl the largest branded

food company in Mexico, Chile, Brazil, Thailand, Vietnam & China. The presentCEO, Austrian Peter Brabeck - Letmathe, has held important positions all over the

world and is leading a totally globalised review and revamp ofNestl's worldwide

operations.

Cola Cola: Is a multinational corporation that obtains over 80 per cent of its

operating income from outside the United States. It operates in 185 markets, has

more than 6,50,000 employees, and serves more than 5 billion customers. One of

the company's core values is to 'think globally, but act locally.'

Other Companies: For example, Colgate-Palmolive Company sells Colgate

toothpaste in more than 50 countries. McDonald's sells its burgers in 73 countries.

Gilette, Johnson & Johnson earn well over 50 per cent of their profits overseas.

Asea Brown Boveri (ABB) has operations throughout the world, having sought or

taken minority positions in over 60 firms.


4/20

30-4

Complexities in global operations

International operations have:

More functions

More heterogeneous functions

More involvement in the employee's personal life

Different approaches to management, since the population of expatriatesand locals varies

More complex external influences, such as from societies and

governments

More cultural differences (with completely different languages, foods,

values, beliefs and ways of doing things).



5/20

30-5

In the new millennium, of course, the traditionally conceived and

practiced leadership skills do not seem to produce results. The

leadership skills that are required for the newly emerging global

economy seem to be somewhat different.


International Human ResourceManagement


6/20

30-6


Competencies needed by atransnational managers

Transnational Skills Transnationally competent managers Traditional international managers

Global perspective Understand worldwide businessenvironment from a global perspective

Focus on a single foreign country and onmanaging relationships between headquartersand that country

Local responsiveness Learn about many cultures Become an expert in one culture

Synergistic learning Work with and learn from peoplefrom many cultures simultaneously

Create a culturally synergisticorganisational environment

Work with and coach people in each foreign

culture separately or sequentially

Integrate foreigners into headquartersnational organisational culture

Transition andadaptation

Adapt to living in many foreign cultures Adapt to living in a foreign culture

Cross-cultural

interaction

Use cross -cultural interaction skills on a

daily basis throughout ones career

Use cross cultural interaction skills primarily on

foreign assignments

Collaboration Interact with foreign colleagues as equals Interact within clearly defined hierarchies ofstructural and cultural dominance

Foreign experience Transportation for career and organisation

development

Expatriation or impartation primarily to get the job

done.


7/20

30-7


International Human ResourceManagement

It is the process of procuring, allocating and effectively utilising

human resources in a multinational corporation. Generally speaking,

there are three sources of employees for an international

assignment: parent country nationals, host country nationals and

third country nationals. When compared to domestic HRM, the scope

of IHRM is very wide as it has to take care of a number ofconstituencies


8/20

30-8


Model of International HRM

Alloc

ateUtilis

ePr

ocure

Host Country Nationals (CNs )

Parent Country Nationals (PCNs)

Third CountryN

ationals (TCN

s)

Host

Home

Othe

r

HR ACTIVITIES


9/20

30-9

Expatriate managers, generally, face a kind of culture shock when

they begin their operations in a different cultural setting. The list of

barriers that confront them seem to be unending


Cultural Differences And HRM


10/20

30-10

Puzzles confronting the expatriatemanager


The following questions must be looked into carefully before sending managers on a

foreign assignment:

What is the host country's business culture like? What is the management style?

Do I have the skills I will need to handle relationships with my employees?

Will this assignment be good for my long-term career growth? Can I expect to be

promoted when I return? How will I be treated if I do not succeed in my overseas job?

What is the country like? What are the customs? Will I be able to adjust to theculture?

Will my family be able to adjust to the new situation? Will my spouse be able to find

suitable employment? Will my children be able to adjust to going to school in another

country? How good is the educational system there?

How will we learn enough of the new language to communicate effectively?

Where will we live? How will the new housing arrangements compare to our current

home? What will happen to our current home when we leave for the new assignment? What are the tax and other financial issues I will have to address as an expatriate?

Who will advise me on these topics? Will the Company pay me in a way that protects

my income from high foreign tax rates?

How will our medical needs be taken care of?L. Grant, "That overseas job could derail your career," Fortune, 14.4.97; S. Taylor R.N. Nappier, "Working in

Japan", Sloan Management Review, Spring 1996)


11/20

30-11


Sense of self and space

Language

Dress and appearance

Food, eating habits and perceptual problems

Time and time consciousness Relationships

Values and norms

Beliefs and attitudes

Mental processes and learning

Work habits and practices

Understanding the problems brought by the above complicating factors is

very important for an expatriate manager, because a small mistake could

lead to grave personal insult and jeopardise important business dealings.

Fortunately cultural sensitivity can be learned through various techniques.

Cultural Differences And HRM


12/20

30-12

Cross cultural training techniques forexpatriate managers


(a) Documentary programmes: Trainees read about a foreign country's history,culture, institutions, geography, and economics. Videotaped presentations areoften used.

(b) Culture assimilation: Cultural familiarity is achieved through exposure to aseries of simulated intercultural incidents, or typical problem situations. Thistechnique has been used to quickly train those who are given short notice of a

foreign assignment.

(c) Language instruction: Conversational language skills are taught through avariety of methods. In most multinational companies, executives learn variouslanguages in a routine way, so that they can be useful to the company in case ofshort-term foreign assignments.

(d) Sensitivity training: Experiential exercises teach awareness of the impact ofone's actions on others.

(e) Field experience: Firsthand exposure to ethnic subcultures in ones own countryor to foreign cultures heightens awareness.

(f) Business basics: This covers negotiating cross-culturally, working with varioustypes of clients, making presentations etc.

(S. Oden Wald, "A Guide for Global Training", Training and Development, July 93.)


13/20

30-13


Economic Factors And HRPractices

Differences in economic systems among countries also translate into

inter country differences in HR practices. In free enterprise systems,

companies focus on cost cutting, enhancing shareholder value,

productivity etc. in socialist systems, the focus shifts to prevention of

unemployment, even at the expense of efficiency. In labour surplus

and capital hungry economies like India, upholding labour laws,respecting political ideologies, and offering jobs to economically poor

and underprivileged sections may occupy the centre stage. These

inter-country differences in cultures, economic systems, labour

policies, thus, complicate the task of selecting, training and managing

employees abroad.


14/20

30-14

International Recruitment

While hiring executives, global companies are guided by three

things; ethnocentrism, polycentrism and geocentrism

a. Ethnocentrism: it is a cultural attitude marked by the

tendency to regard one's own culture as superior to others

b. Polycentrism: In the polycentric corporation there is a

conscious belief that only host country managers can ever

really understand the culture and behaviour of the host country

market, therefore, the foreign subsidiary should be managed

by local people.

c. Geocentrism: it assumes that management candidates must

be searched on a global basis, without favouring anyone.




15/20

30-15


Reasons for expatriate failures

Transfer anxieties: Foreign assignments might have been pushed aheadwithout adequate preparation and advance planning. The expat might, asresult, find the task insurmountable, feel the pressure unbearable and returnempty-handed.

Career problems: A foreign posting creates, for the expatriate a number ofcareer problems (i) being 'out of sight, out of mind' and being bypassed for

promotions (ii) the danger of coming home a stranger with few familiar facesto greet his/her arrival (iii) the likelihood of being tempted by the foreign life styleand losing the desire to return.

Personal problems: As Negandhi reported, expatriates may encounterserious adjust problems such as: personal discomfort and uncomfortableliving conditions, homesickness; education, medical, health problems of familymembers; social aloofness, cultural mismatch.

Other concerns: These include: (i) the foreign posting might be looked at asa short term obligation (ii) the expats performance might be evaluated againsta short-term criteria, (iii) the expat may begin to feel the pinch due to lack ofcontinuity in plans empowering him to conduct the show for a reasonableperiod (iv) business environment of the host country might be too restrictive,unfriendly and even unbearable.


16/20

30-16

International selection

While selecting executives for international postings, the following

things could be kept in mind

i. General and technical criteria

ii. Language skills

iii. Cross cultural suitability

iv. Motivation for foreign assignment

v. Family situation




17/20


18/20

30-18


In selecting the individual who gets an overseas assignment,organisations must not only consider their ability to do the job but, inaddition, must consider their ability to work in a new culture andemotionally handle the stress associated with a new set of culturalconcerns

International training and developmentCareful selection is only one side of the coin. To ensure success,

expatriates require proper orientation, cross cultural training, career

counselling etc.

i. Orientation

1. cultural briefing

2. assignment briefing

3. shipping requirements

ii. cross cultural training

iii. career development and counselling



19/20

30-19


International compensation

Compensation practices for international employees are much more

complex than tose for domestic employees because many more

factors must be considered

i. Income that the expatriate was getting at HRM

ii. Additional incentives to be paid on global assignment

iii. The income of local employees reporting to the expatriate



20/20

30-20


International labour relations

Labour management relations in international companies depend on

the peculiar customs, traditions, laws and practices followed in

respective countries. Global companies must pay adequate attention

to the health, safety and security of their employees also.

1. The role of unions

2. Collective bargaining

3. Labour participation

4. Employee health

5. Employee safety Repatriation

1. logistics

2. readjustment and integration into the community for the

employee and his or her family


hrm - excel books - chapter 30

Documents