international staffing strategies
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slides about ISS.TRANSCRIPT
International and Comparative Human
Resource Management
Creating an International Workforce: IHRM orientation and staffing strategy
Alhajie Saidy Khan LAIBS
Lecture outline
The context for international HR resourcing
Internationalisation strategy/stage and international
staffing strategy
International orientation and staffing
International assignment success factors
Selection criteria for international assignment
Expatriate selection and strategy
Conditions for using expatriates for international
assignments
Expatriate failure and its consequences
Context for international staffing
Globally integrated and co-ordinated systems and need local
sensitivity and responsiveness.
Global approach to talent source and thus, diverse workforce.
Blurring of traditional lines HR functions and need for resourcing
specialists to also focus on range of related (not necessarily
traditional) HR functions
Increase Merger and acquisition requires staffing in a changing
environment as well as harmonisation of HR practices.
Global networks of integrated systems – greater opportunities for
learning from diverse practices, but also fast and continuously
Rapidly changing and volatile business situations and global
markets and thus speed to recruit, deploy, develop and shed people
CIPD, 2013
Internationalisation strategy and IHRM orientation
Early stages of internationalisation = ethnocentric orientation
Multi-local strategies = ethno, poly and regiocentric orientation
Regional strategies = regiocentric with element of geocentric IHRM orientation
International strategy = ethno and plycentric orientation
Global strategy = geocentric orientation
Edwards and Rees, 2006/11; Harzing and Pinnington, 2011; Perlmutter,
Ethnocentric staffing orientation
Key management positions filled by parent-country
nationals
Advantages:
Overcomes lack of qualified managers in host nation
Unified and coordinated policy that help maintain head
quarter control over subsidiaries
Could help transfer core competencies from and to HQ
Disadvantages:
Could produces resentment in host country
Can lead to cultural myopia
Polycentric staffing orientation
Host-country nationals manage subsidiaries and PCNs hold key headquarter positions
Best suited to multi-domestic businesses
Advantages:
Could help alleviates cultural myopia.
Relatively inexpensive approach to international staffing
Helpful for transfer core competencies
Disadvantages:
Limits opportunity for experience of host-country nationals outside their own country.
Can create gap between home-and host-country operations
Limit HQ ability to coordinate and control subsidiaries
Regiocentric staffing orientation
Nationals of regions manage subsidiaries within their respective regions
Parent company nationals hold key HQ positions
Advantages Allows for greater regional interaction and sharing of across regional
experiences
Shows greater sensitivity to local conditions and demands
Relatively lower wage bills
Eases transition to a global, geocentric orientation
Disadvantages Could potentially inhibit ability to see the necessity for global HRM orientation
Potential to improve regional career opportunities at the expense of wider international career opportunities
Animosities between neighbouring countries could hinder success and undermine wider strategic vision
Geocentric staffing orientation
Seek best people, regardless of nationality
Advantages:
Enables the firm to make best use of all its human resources
Equips executives to work in different international context
Helps build strong unifying and informal management network
Disadvantages:
National immigration policies may limit implementation
Expensive to implement due to training and relocation costs
Compensation structure can be problematic
Conditions for successful Geocentric staffing
Availability of highly competent or potentially
competent employees
Some international experience within top
management
Competent or potentially competent cadre of
managers willing and ready for international
deployment
Willingness to learn and an openness to new
and different experiences and ideas
Key international assignment success factors
Professional/technical competence
Relational ability
Motivation
Family situation
Language skills
Acceptance of assignment
Torrington et al, 2007
Criteria for selection for international assignment
Specific organisation
requirements (technical)
Cross-national and cross-regional requirements
Host country requirements Norms and traditions
Language
Knowledge of institutions
and legal system etc.
Family requirement Selection decision
Mendenhall and Oddou, 1985; See Sparrow, 2007
Corporate and technical criteria
Easily evaluated technical and managerial competencies of assignee are most important
Organisational situational factors including:
Requirements to send expatriates to carryout assignments in certain regions than otherwise
Involvement of partners as in joint ventures and cross-border alliances
Using specific skills and function and training as selection criteria
Cross-national criteria
Individual traits and characteristics that impact success
or failure of international assignment (e.g. cultural
empathy, adaptability, language ability etc.).
Ability to implement technical and managerial tasks and
be reasonably comfortable in a foreign environment
These criteria are, however, sometimes very difficult to
determine and measure
Host country requirements
Copping with alternative social norms and forms of organisation
Ability to manage “hardship postings” (remote locations, high security risks, poor standard of living conditions)
Capacity to work and live under what might be perceived as repressive political and social contexts
Legal requirements (e.g. need and difficulty of acquiring work permit)
Language and other social criteria
Core situational factor: knowledge and ability to directly
communicate in the language of the host is critical for both
assignee and spouse/family
Family: could make potential international assignee refuse
international assignment
Gender: despite steady increase in dual expatriate careers
couples, some country may be less suitable for female
international assignees
Mendenhall, M. and Oddou’s four dimensional criteria
Self-Orientation Possessing high self-esteem and self-confidence
Others-Orientation Ability to develop relationships with host-country nationals
Willingness to communicate
Perceptual Ability The ability to understand why people of other countries behave the
way they do
Being non-judgmental and flexible in management style
Cultural Toughness Ability to adjust to the ways of country of assignment
Source: Academy of Management Review, Vol. 10:1 (pp. 39-47)
See also, Reich and Harzing (2011) in Harzing and Pinnington (eds.); Tahvanainen and Suutari (2005) in Scullion and Linehan (eds.)
Changing context and changing nature of international staffing
From expatriate management to, e.g.:
International commuters & assignees on short term or medium term
business trips
Contract expatriates
Employees used on long-term business trips
Cadres of global managers
International transferees (from one subsidiary to another)
‘self-initiated movers’ (SIMS) - live and work away from their home
country
Virtual international employees active in cross-border project teams
Domestically based employees dealing with international suppliers and/or
clients
Overseas workers attracted to a domestic labour market.
(CIPD)
Expatriate management remain Core aspect of international staffing function
According to CIPD, various types of international
employees indicate that the claim changing business
context and requirements have reduced the reliance on
“longer term expatriation in more mature markets and
grown in developing ones and, in the global
community”.
Nevertheless, expatriates management remains a major
aspect of work of HR practitioners responsible for
international assignments
Definitions
Expatriate: citizens of one country working in another
“Inpatriates”: expatriates who are citizens of a foreign country working in the home country of their multinational employer
Conditions for using expatriates
When there is desire for international expansion, but lack
of prior international experience
Need or desire to transfer of firm-specific knowledge
An ethnocentric orientation underpinned by strong single-
status Corporate outlook and strategy
Having new subsidiaries that require guidance
Significant differences between parent country and host
country ‘culture’ and institutional frameworks
When host country regulations cast doubts on fulfilment of
contracts
Why MNCs use expatriates
Management development - acquiring international
management skills and competencies
Coordination and control of/over diverse and
dispersed operations and activities
Effective communication of local needs and strategic
information to and from headquarters
Expatriate failure
Expatriate failure refers to the premature return
of an expatriate manager before the completion
of his or her international assignment due to
the person’s failure to attain the expected
performance levels and due to the persons
continuing inability to adjust to the new work
and cultural environment in the host country
The Cost of Expatriate Failure
Expatriate failure has two cost components:
Direct Costs: Can be easily measured in monetary terms (e.g.:
air fare, relocation expenses, salary and training). Varies
according to position, country of assignment, exchange rates
and nature of replacement
Indirect Costs: Cannot be measured easily in monetary terms,
but may be significantly higher than the direct costs. Examples
include: loss of reputation and market share, morale and
productivity in the local work force, complications with the
host government, lost of credibility and career advancement