copyright atomic dog publishing, 2004 chapter 14 establishing hrm practices overseas

Copyright Atomic Dog Publishing, 2004

Chapter 14Establishing HRM Practices Overseas


Outline

• 14-1 Gaining Competitive Advantage

• 14-2 HRM Issues and Practices

• 14-3 The Manager’s Guide


14-1 Gaining Competitive Advantage

• International business operations appear in a variety of forms: Wholly owned subsidiaries

- The most common want medium to large companies “go international” is simple to set up operations overseas that they own

Joint ventures- When a firm joins up with foreign firms and creates a new

company


14-2 HRM Issues and Practices

• Understanding cultural differences

• The use of expatriates

• Developing HRM practices in host-national countries


Understanding Cultural Differences

• Artifacts Tangible things that represent the superficial aspects of a

country’s culture

• Values The rules of societal propriety and impropriety that are

shared by people within a culture

• Assumptions A society’s beliefs that have evolved from its attempts to

adjust to the world around it

• Culture A society’s set of assumptions, values, and rules about social

interaction


Cross-Cultural Differences in the Workplace

• How interviews should be conducted

• How managers should act with their subordinates

• How negotiations should be conducted

• How new information should be packaged for training purposes

• How people should be paid for their work


How People React to Cultural Improprieties

• Degree of condemnation depends on two factors: The extent to which the broken rule is widely shared among a

cultural group’s members The extent to which the rule is deeply held and viewed as

being important or sacred


Degree of Condemnation

• Types of cultural rules and the typical condemnation associated with each: Widely shared, deeply held

- Severe punishment Widely shared, shallowly held

- Minor condemnation Narrowly shared, deeply held

- Disapproval or censure Narrowly shared, shallowly held

- Slight or none


Expatriates & Competitive Advantage

• Definition A professional/managerial employee moved from one

country to, and for employment in, another country

• Use of expatriates and competitive advantage Succession planning Coordination and control systems Informational needs


Expatriates Rights Under the Civil Rights Act of 1991

• “…coverage [to] U.S. citizens employed in a foreign country, provided that compliance with this provision would not cause the employer to violate the law of the foreign country in which the workplace is located. TO be covered under this provision, the U.S. citizen must be employed overseas by a firm controlled by an American employer. Control can be determined in several ways: interrelation of operations, common management, centralized control of labor relations, or common ownership or financial control of the corporation and the employer”


Selecting Expatriates

• Personality traits that a successful expatriate should possess: Ability to handle stress Reinforcement substitution Ability to develop relationships Perceptual skills


Ability to Develop Relationships

• Two skills are associated with expatriates developing relationships with host nationals: Be willing to communicate in the host language Conversational currency

- Collecting social and cultural tidbits and trivia

- Strategically insert into conversations with host nationals


Perceptual Skills

• Flexibility of one’s belief systems

• Ability to avoid being judgmental about the belief and value systems of the host culture

• Ability to make flexible attributions about why host nationals behave the way they do

• High tolerance for uncertainty


Training Expatriates

• Expatriates should be taught: How to understand and work effectively with people from

different cultural, religious, and ethnic backgrounds How to manage multicultural teams How to understand global markets, global customers, global

suppliers, and global competitors


Problems Appraising Expatriates’ Job Performance

• Invalid performance criteria Performance criteria do not make sense in the foreign culture

• Rater competence Lacking an understanding of the social and business

contexts in the foreign culture

• Rater bias Cultural misinterpretations


Overcoming Performance Appraisal Problems

• Utilize multiple raters

• Make sure that some of those raters have lived and worked in the country in which the expatriate is working


Compensating Expatriates

• Foreign service premiums

• Hardship allowance

• Cost of living allowances

• Housing allowances

• Utility allowances

• Furnishing allowances

• Education allowances

• Home leave allowances

• Relocation allowances

• Medical allowances

• Car and driver allowances

• Club membership allowances

• Taxes


Repatriates

• Expatriates who return home

• Problems with repatriates Not told what their job assignments will be prior to returning

home Return home to jobs that require less autonomy and authority Difficulty readjusting to their native culture Loss of premiums

- No more elite private schools, no company cars, no allowances for recreational activities


HRM Interventions for Expatriates

• Mentoring

• Formalized career planning

• Communication systems


Developing HRM Practices in Host-National Countries

• Adjust HRM practices to the norms and culture of the host country

• Develop training programs that understand how the culture views the educational process

• Develop compensation systems that understand what motivates employees in each culture


14-3 The Manager’s Guide

• International HRM issues and line managers

• International HRM issues and the HRM department


International HRM Issues and Line Managers

• Managing expatriate subordinates Managers must successfully navigate “long-distance

managing”

• Expatriate service A manager must be able to adapt his or her management

behavior to the culture of the host country


International HRM Issues and the HRM Department

• Who should be sent overseas?

• What kind of training will they need, both before they leave and once they are abroad?

• What kind of compensation package will be needed to induce candidates to go overseas?


International HRM Issues and the HRM Department

• In what ways do the company’s human resource policies and procedures need to be adjusted overseas?

• How do performance appraisal systems need to be modified due to international differences?

• How many global management development programs will be created?

copyright atomic dog publishing, 2004 chapter 14 establishing hrm practices overseas

Documents

employer slide

sacred slide

work slide

social interaction slide

hrm practices

foreign country

country use of expatriates

expatriates rights