chapter 15: human resource management & chapter 3: the world marketplace
TRANSCRIPT
CHAPTER 15: HUMAN RESOURCE MANAGEMENT
&
CHAPTER 3: THE WORLD MARKETPLACE
BUILDING A TOP-QUALITY WORKFORCE
CHAPTER 15: Human Resource Management
HUMAN RESOURCE MANAGEMENT: BRINGING BUSINESS TO LIFE
Human Resource Management – maximizing the effectiveness of the workforce.
Recruiting world-class talent
Promoting career development
Boosting organizational effectiveness
HUMAN RESOURCE MANAGEMENT CHALLENGES: MAJOR HURDLES
Older Workers Younger Workers Women Workers Work-Life Balance Wage Gap Outsourcing Lawsuits
BEST-PAID EXECUTIVES OF PUBLIC COMPANIES DURING THE PAST DECADE
Company NameTotal compensation
( in millions)
Oracle Lawrence J. Ellison $1,835.70
Interactive Corp/Expedia.Com Barry Diller $1,142.90
Occidental Petroleum Ray R. Irani $857.10
Apple Steve Jobs $748.80
Capital One Financial Richard D. Fairbank $568.50
Countrywide Financial News Angelo R. Mozilo $528.60
Nabors Industries Eugene M. Isenberg $518.00
Yahoo Terry S. Semel $489.60
Cendant Henry R. Silverman $481.20
Unitedhealth Group William W. McGuire $469.30
Lehman Brothers Holdings Richard S. Fuld, Jr. $456.70
Dell Michael S. Dell $453.80
NVR Dwight C. Schar $451.50
United Technologies George David $447.80
Qualcomm Irwin Mark Jacobs $436.80
Fidelity National Financial William P. Foley, II $430.40
Cisco Systems John T. Chambers $393.20
Forest Laboratories Howard Solomon $385.50
Citigroup Sanford I. Weill $360.90
Starbucks Howard D. Schultz $358.40
Colgate-Palmolive Reuben Mark $357.60
XTO Energy Bob R. Simpson $350.60
Target Robert J. Ulrich $342.30
Freeport-Mcmoran Cop&Gold James R. Moffett $332.00
Chesapeake Energy Aubrey K. McClendon $331.60
Wall Street Journal July 27, 2010
BEST-PAID EXECUTIVES OF PUBLIC COMPANIES DURING THE PAST DECADE
HUMAN RESOURCE PLANNING: DRAWING THE MAP
ANALYZING HUMAN ASSETS
Job Analysis What skills does the workforce already
have? What skills do they need?
Job Specifications A master’s degree in business
A minimum of three years business teaching experience
Excellent interpersonal and communication skills
Job Description Teach 5 business classes
Consult with students for 5 hours
Participate in college governance
RECRUITMENT: FINDING THE RIGHT PEOPLE
Internal Recruiting – transferring or promoting employees within the company. Boosts Morale Proven Track Record Lower Recruiting Costs
External Recruiting – looking for employees outside the firm. Recruiting Resources:
• Employment Websites
• Newspaper Ads
• Trade Associations
• Employment Centers
• Colleges/Universities
SELECTION: MAKING THE RIGHT CHOICE
STRUCTURED INTERVIEW
Develop a list of questions prior to interview Focus questions on behaviors and experiences
Describe a time when you…
What would you do if…
If you realized that a co-worker…
JOB OFFERS & CONTINGENT WORKERS
It is important for managers to set a probationary period with new hires Typically 3 to 6 months Employees will become permanent if
everything works out Companies with fluctuating employment
needs may opt to hire contingent workers Temporary Full-Time Independent Contractors On-call Workers
TRAINING AND DEVELOPMENT: HONING THE COMPETITIVE EDGE
Increase innovation Increase technology
adoption Increase productivity Increase motivation Decrease liability
ORIENTATION
Effective orientations are the first step in the development process
Introduce employees to the company culture
Strong orientation programs reduce employee turnover
ON-THE-JOB TRAINING
On-the-Job Training – popular and low cost -
employees simply begin working under the
guidance of experienced employees.
Apprenticeships – training programs where beginners
serve as an assistant prior to working.
OTHER TRAINING OPTIONS
Off-the-Job Training – training that takes place away from the job setting.
Companies employ a variety of training strategies:• Vestibule Training• Classroom• Job Simulations
Management Development – programs to assist current and potential executives develop leadership skills.
Computer-Based Training – standardized presentations
using video, audio and broadband technology.
EVALUATION: ASSESSING EMPLOYEE PERFORMANCE
Performance Appraisals Formal feedback Compare actual to expected results May impact compensations, incentives,
promotions, transfers and terminations
HR should create an evaluation tool that ties into the company’s objectives
Evaluation should be a feedback PROCESS Managers should be trained Employees should be informed of the process
COMPENSATION: SHOW ME THE MONEY
Compensation – the combination of pay and benefits.
Wages – pay in exchange for the number of
hours or days that an employee
works.
Salary – the pay that employees receive over a fixed period.
Benefits – noncash
compensation like health care and
vacation.
Compensation is based on:
Competition Contribution Ability to Pay Cost of Living Legislation
PERFORMANCE PAY OPTIONS
Commission
Bonuses
Profit Sharing
Stock Options
Pay for KnowledgeIBM Distinguished EngineerClient Technical AdvisorMember, IBM Academy of Technology
BENEFITS: FROM BIRTHDAY CAKES TO DEATH BENEFITS
• Paid Vacation & Holidays
• Paid Sick Days• Health Insurance• Retirement Programs• Product Discounts• Tuition Reimbursement
• Social Security• Medicare Contributions• Unemployment
Payments• Workers’ Compensation• Federal Family and
Medical Leave
Legally Mandated Benefits Optional Benefits
CAFETERIA-STYLE BENEFITS
Providing employees a set dollar amount per person that they spend on company benefits.
Allows employees to tailor their benefits to their individual needs.
EMPLOYEE HEALTH AND WELLNESS PROGRAMS
““
According to the World Health Organization, every dollar spent on wellness programs
saves three dollars in medical costs. Workplace fitness programs reduce short-
term leave by up to 32% and increase productivity by up to 52%.
(Source: Share the bottom-line benefits by Sid Kirchheimer, Time magazine, February 14, 2004)
FLEXIBLE SCHEDULING
SEPARATION: BREAKING UP IS HARD TO DO
Employees will leave for a variety of reasons Fired Laid Off Transfers Career Changes Personal Reasons
Employers should proceed carefully to avoid wrongful termination lawsuits
Business without Borders
Chapter 3: THE WORLD MARKETPLACE
With technology and telecommunications
booming, and trade barriers falling, the economic
boundaries between nations have begun to blur.
AN UNPRECEDENTED OPPORTUNITY
WORLDWIDE ECONOMIC GROWTH
Nation Population Per Capita GDP (U.S.
Dollars)
GDP Growth Rates
China 1,333,671,015 $8,400 +9.4%
India 1,189,172,906 $3,700 +7.8%
European Union
492,387,344 $34,000 +1.6%
United States 313,232,044 $48,100 +1.5%
Indonesia 245,613,043 $4,700 +6.4%
Brazil 203,429,773 $11,600 +2.8%
Recent forecast of the world ranking of the biggest economies in the year 2050
BRIC countries- Brazil, Russia, India and China
The four original BRIC countries comprise more than 2.8 billion people or 40 percent of the world’s population, cover more than a quarter of the world’s land area over three continents, and account for more than 25 percent of global GDP.
KEY REASONS FOR INTERNATIONAL TRADE
Access to Factors of Production
Reduced Economic Risk
Innovation
Lithium mine production (2011) and reserves in tonnes
Country Production Reserves
Brazil 160 64,000
Zimbabwe 470 23,000
Canada 480 180,000
Portugal 820 10,000
Argentina 3,200 850,000
People's Republic of China 5,200 3,500,000
Australia 9,260 970,000
Chile 12,600 7,500,000
World total 34,000 13,000,000
GLOBAL TRADE: TAKING MEASURE
Balance of Trade Trade Deficit Trade Surplus
Balance of Payments Balance of Payments Deficit Balance of Payments Surplus
Exchange Rates Countertrade
United States Balance of Trade
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2011-
46341.0
2010-
34840.0-
39912.0-
39699.0-
40762.0-
42187.0-
50130.0-
42898.0-
46759.0-
44455.0-
38278.0-
38316.0-
40264.0
2009-
36067.0-
26362.0-
28009.0-
28445.0-
24855.0-
27139.0-
33086.0-
31072.0-
35164.0-
32302.0-
35273.0-
37132.0
2008-
59923.0-
62655.0-
58898.0-
62973.0-
61175.0-
61295.0-
66401.0-
61449.0-
59770.0-
59442.0-
43804.0-41016.0
The balance of trade is the difference between the monetary value of exports and imports in an economy over a certain period of time. A positive balance of trade is known as a trade surplus and consists of exporting more than is imported; a negative balance of trade is known as a trade deficit or, informally, a trade gap.
U.S. Balance of Payments (International Transactions)
Current Account Balance:1st quarter 2009: -$101.5 billion 4th quarter 2008: -$154.9 billion 3rd quarter 2008: -$174.1 billion 2nd quarter 2008: -$180.9 billion 1st quarter 2008: -$175.6 billion
EXCHANGE RATES: WHO BENEFITS?
STRONG DOLLAR VS EURO:(Example: $1.00 = 1.20 euros)
• U.S. travelers to Europe Dollar buys more in Europe• American firms with European operations Operating cost are lower• European exporters European products costs less in
U.S.
WEAK DOLLAR VS. EURO:(Example: $1.00 = .60 euros)
• European travelers to U.S. Euro buys more in America• European firms with American operations Operating costs are lower• American exporters American products cost less in
Europe
American Dollar Exchange RateCountry
Currency
ISO 03/06/09 03/05/09 Change
AUSTRALIA Dollar AUD 1.561302 1.560571 +0.0468%
BELGIUM Franc BEF 31.83601 32.10681 -0.8434%
CANADA Dollar CAD 1.286062 1.287082 -0.0792%
DENMARK Krone DKK 5.887687 5.937769 -0.8434%
EUROPEAN UNION Euro EUR 0.789194 0.795907 -0.8434%
FINLAND Markka FIM 4.692334 4.732248 -0.8434%
FRANCE Franc FRF 5.176773 5.220808 -0.8435%
GERMANY Mark DEM 1.543529 1.556659 -0.8435%
HONG KONG Dollar HKD 7.755508 7.758287 -0.0358%
ISRAEL Sheqel ILS 4.241282 4.234666 +0.1562%
ITALY Lira ITL 1528.093 1541.091 -0.8434%
JAPAN Yen JPY 97.89695 98.37888 -0.4899%
KOREA (SOUTH) Won KRW 1549.853 1568.522 -1.1902%
MEXICO Peso MXN 15.26503 15.31762 -0.3433%
NETHERLANDS Guilder NLG 1.739155 1.753948 -0.8434%
NEW ZEALAND Dollar NZD 1.985100 1.994357 -0.4642%
NORWAY Krone NOK 7.064156 7.098946 -0.4901%
RUSSIA Ruble RUB 35.73181 35.86129 -0.3611%
SAUDI ARABIA Riyal SAR 3.755190 3.755172 +0.0005%
SINGAPORE Dollar SGD 1.545703 1.554073 -0.5386%
SOUTH AFRICA Rand ZAR 10.42447 10.65067 -2.1238%
SPAIN Peseta ESP 131.3108 132.4278 -0.8435%
SWEDEN Krona SEK 9.201466 9.291274 -0.9666%
SWITZERLAND Franc CHF 1.152777 1.172858 -1.7121%
TAIWAN Dollar TWD 34.67172 34.94653 -0.7864%
UNITED KINGDOM Pound GBP 0.708837 0.708185 +0.0921%
in USD
GLOBAL MARKET DEVELOPMENT OPTIONS
Lower Risk Higher
Risk
Less Control More
Control
STRATEGIES FOR FINDING GLOBAL SUPPLIERS
Foreign Outsourcing/Contract Manufacturing
• Contracting with foreign suppliers to produce products, usually at a fraction of the domestic cost.
Importing • Buying products that have been produced or grown in foreign nations.
Exporting • Producing products domestically and selling them abroad
STRATEGIES FOR REACHING GLOBAL MARKETS
Licensing Authority given by domestic firm for rights
to produce/market its product and use trademarks/patents.
Franchising Providing the right to produce and market
products under its operating requirements. Direct Investment
Firms acquire businesses or develop new facilities in foreign countries.
Joint Ventures Two or more companies joining forces to
pursue specific opportunities (Partnership or Strategic Alliances
STRATEGIES FOR REACHING GLOBAL MARKETS
45
Foreign acquisition
allows companies to
gain quick access into
new markets
Foreign acquisition
allows companies to
gain quick access into
new markets
In the wake of the Great Recession…
Italian carmaker Fiat acquired struggling
U.S. auto giant, Chrysler to leverage the American market
MULTINATIONAL FIRMS
Shell Oil
Michelin Tires
Jaguar Automobiles
Nokia Cell Phones
Nestle Quick
Netherlands/England
France
India
Finland
Switzerland
Columbia Records Japan/Germany
Do you know where the firm that ultimately owns each brand is headquartered?
BARRIERS TO INTERNATIONAL TRADE
Sociocultural Differences
Economic Differences
Political & Legal Differences
SOCIAL/CULTURAL DIFFERENCES
Nonverbal Communication Forms of Address Attitudes toward
punctuality Religious Celebrations Business Practice/Gifts
Think beyond the obvious differences.
Social/cultural differences can rapidly
undermine business relationships.
ECONOMIC DIFFERENCES
Can you profitably provide your product
or service to meet the needs of the
market?
• Exchange Rates• Population• Per Capita Income• Infrastructure
TransportationCommunicationEnergy Finance
Can you profitably provide your product or
service to meet the needs of the market?
POLITICAL & LEGAL DIFFERENCES
Political regimes differ around the world Legal Differences
Lack of Enforcement Bribery
Political Climate Stability Violence
Piracy and intellectual property is a problem in several foreign nations
PROTECTIONISM
Reasons to Create Trade Restrictions
Reasons to Eliminate Trade Restrictions
Protect domestic industry Reduce prices and increase choices for consumers
Protect domestic jobs in key industries
Increase domestic jobs
Retaliate against countries who have engaged in unfair trade
practices
Build exporting opportunities
Pressure other countries Use world resources more efficiently
Reasons to Create Trade Restrictions
Reasons to Eliminate Trade Restrictions
TRADE RESTRICTIONS Tariffs
Taxes levied against imports Quotas
Limitations on the amount of specific products that may be imported from certain countries
Voluntary Export Restrictions Limitations on the amount of specific
products that one nation will export to another
Embargo Total ban on international trade of a certain
item or a total halt in trade with a specific nation
GLOBAL EMPLOYMENT
““
A new study suggests that 2.3 million service jobs will have moved from the
United States to other countries by 2008, up from 900,000 as of 2003.
REVERSE BRAIN DRAIN
Many talented immigrants are moving home to take advantage of new economic opportunities.
US companies can cut costs by sourcing employees from overseas.
But is America losing potential innovators such as Sergey Brin, founder of Google?
FREE TRADE: THE MOVEMENT GAINS MOMENTUM
There has been a global move toward free trade – the unrestricted movement of good and services across
borders.
GATT AND WORLD TRADE ORGANIZATION (WTO)
General Agreement on Tariffs & Trade (GATT) Established in 1948 Now encompasses 125 nations Slashed tariffs by about 30%
Promote International Trade Settle Trade Disputes
FREE TRADE
The World Bank 185 Member Countries Reduce World Poverty in Developing World Influence Global Economy Provide Financial Assistance
Low interest loans The International Monetary Fund
Support Stable Exchange Rates Facilitate International Payments Adopt Economic Policies Promote Trade Lend money to member nations
TRADING BLOCS/COMMON MARKETS
The North American Free Trade Agreement (NAFTA) The largest trading bloc US, Canada, Mexico
European Union (EU) The largest common market 27 nations; combined GDP
$15Trillion Goal is to bolster Europe’s
trade position
Groups of Countries promoting the free flow of goods and services