Download - Ch11
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CHAPTER 11
INTERNATIONAL HUMAN
RESOURCE MANAGEMENT
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COMPONENTS OF COMPONENTS OF HRM HRM
• Recruitment• Selection• Training & Development• Performance Appraisal• Compensation• Labor Relations
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INTERNATIONAL INTERNATIONAL HRM (IHRM)HRM (IHRM)
• Basic HRM issues remain• Must choose a mixture of
international employees• How much to adapt to local
conditions?
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EMPLOYEES IN EMPLOYEES IN MULTINATIONAL MULTINATIONAL ORGANIZATIONSORGANIZATIONS
• Host country nationals• Expatriates• Home country nationals• Third country nationals• Inpatriates
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MULTINATIONAL MULTINATIONAL MANAGERSMANAGERS
• Host country or expatriate?
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USING HOST COUNTRY USING HOST COUNTRY MANAGERSMANAGERS
• Do they have the expertise for the position?
• Can we recruit them from outside the company?
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USING EXPATRIATE USING EXPATRIATE MANAGERSMANAGERS
• Do parent country managers have the appropriate skills?
• Are they willing to take expatriate assignments?
• Do any laws affect the assignment of expatriate managers?
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•IS THE EXPATRIATE IS THE EXPATRIATE WORTH IT?WORTH IT?
• High cost• High failure rate
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•EXHIBIT 11.1 PAYING FOR THE EXPATRIATE MANAGER
0
50000100000
150000
200000
250000300000
350000
400000
$
Hom
eSa
lary
Toky
o
Hong
Kon
g
Lond
on
Taip
ei
Sing
apor
e
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•REASONS FOR U.S. REASONS FOR U.S. EXPATRIATE FAILUREEXPATRIATE FAILURE
• Spouse fails to adapt • Manager fails to adapt • Other problems within the family• Personality of the manager• Level of responsibilities
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• Lack of technical proficiency• No motivation for assignment
•Reasons for expatriate Reasons for expatriate failure, continuedfailure, continued
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•MOTIVATIONS TO USE MOTIVATIONS TO USE EXPATSEXPATS
• Managers acquire international skills
• Coordinate and control operations dispersed activities
• Communication of local needs/strategic information to headquarters
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•KEY EXPATRIATE SUCCESS KEY EXPATRIATE SUCCESS FACTORS FACTORS
• Professional/technical competence• Relational abilities • Motivation • Family situation • Language skills • Willingness to accept position
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•PRIORITY OF PRIORITY OF SUCCESS FACTORS SUCCESS FACTORS
• Depends on : • assignment length• cultural distance• amount of required interaction
with local people• job complexity/responsibility
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•EXHIBIT 11.3 SHOWS A EXHIBIT 11.3 SHOWS A DECISION MATRIX USED DECISION MATRIX USED TO SET PRIORITIES OR TO SET PRIORITIES OR DIFFERENT SUCCESS DIFFERENT SUCCESS FACTORS DURING FACTORS DURING SELECTIONSELECTION
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Assignment Characteristics Expatriate Success Factors
Longer Duration
More Cultural Dis-similarity
Greater Interaction and Communica-tion Requirements with Locals
More Complex or Respon- sible Job
Professional/ Technical Skills
High Neutral Moderate High
Relational Abilities
Moderate High High Moderate
International Motivation
High High High High
Family Situation
High High Neutral Moderate
Language Skills
Moderate High High Neutral
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•EXPATRIATE TRAININGEXPATRIATE TRAINING
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•TRAINING RIGOR TRAINING RIGOR
• The extent of effort by trainees and trainers required to prepare the trainees for expatriate positions
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•LOW RIGOR LOW RIGOR TRAINING TRAINING
• Short time period• Lectures• Videos on local culture• Briefings on company operations
company operations
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•HIGH RIGOR HIGH RIGOR TRAININGTRAINING
• Lasts over a month • Experiential learning• Extensive language training• Often includes interactions with
host country nationals
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•EXHIBIT 11.4 SHOWS EXHIBIT 11.4 SHOWS VARIOUS TRAINING VARIOUS TRAINING TECHNIQUES AND THEIR TECHNIQUES AND THEIR OBJECTIVES AS THE RIGOR OBJECTIVES AS THE RIGOR OF THE CROSS- CULTURAL OF THE CROSS- CULTURAL TRAINING GROWS TRAINING GROWS
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Techniques: Field trips tohost country, meetingswith managers experiencedin host country, meetingswith host countrynationals, intensivelanguage training.
Objectives: Developcomfort with host countrynational culture, businessculture, and socialinstitutions.
HighTraining
Rigor
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Techniques:Experiential learningexercises, role playing,simulations, casestudies, survivallanguage training.
Objectives: General andspecific knowledge ofhost country culture,reduce ethnocentrism.
Mid-level
TrainingRigor
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Techniques: Lectures,videotapes, readingbackground material.
Objectives: Providebackground information onhost country business andnational cultures, basicinformation on companyoperations.
LowTraining
Rigor
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•CHALLENGES OF EXPATRIATE CHALLENGES OF EXPATRIATE PERFORMANCE APPRAISALPERFORMANCE APPRAISAL
• Unreliable data• Complex and volatile
environments• Time differences and distance
separation• Local cultural situations
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•STEPS TO IMPROVE STEPS TO IMPROVE THE PROCESS THE PROCESS
• 1. Fit the evaluation criteria to strategy.
• 2. Fine tune the evaluation criteria
• 3. Use multiple evaluators with varying periods of evaluation
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•EXHIBIT 11.6 Shows several EXHIBIT 11.6 Shows several sources of information a sources of information a superior or the HRM superior or the HRM professionals may use to professionals may use to evaluate an expatriate evaluate an expatriate managers managers
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Evaluation Sources Criteria Periods
Self evaluation Meeting objectives Management skills Project successes
Six months and at the completion of a major project
Subordinates Leadership skills Communication skills Subordinate development
After completion of major project
Peer expatriate and host country manages
Team building Interpersonal skills Cross-cultural interaction skills
Six months
On-site supervisor Management skills Leadership skills Meeting objectives
At the completion of significant projects
Customers and clients Service quality and timeliness Negotiation skills Cross-cultural interaction skills
Yearly
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•EXPATRIATE EXPATRIATE COMPENSATION COMPENSATION
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•THE BALANCE THE BALANCE SHEET APPROACH SHEET APPROACH
• Provides a compensation package that equates purchasing power
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•BALANCE SHEET BALANCE SHEET COSTSCOSTS
• Allowances for cost of living, housing, utilities, furnishing, educational expenses, medical expenses, club memberships, and car and/or driver expenses
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Domestic Assignment Expenses and Spendable Income
Expatriate Assignment Expenses and Balanced Spendable Income + Allowances
Base Salary = Base Salary
+ Allowances as an incentive to take position, foreign service premium, hardship pay, R&R
Taxes = Taxes + Allowances to balance extra tax payments Goods and Services
= Goods and Services
+ Allowances to cover cost of living differences, housing, children’s education, medical costs, automobile, recreation, home leave travel
Housing = Housing
+ Allowances for moving expenses, settling in expenses, initial housing costs, and furnishing allowances
Spendable Income
= Spendable Income
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•OTHER OTHER APPROACHESAPPROACHES
• Parent country wages everywhere • Wean expatriates from allowances• Pay based on local or regional
markets• Cafeteria selection of allowances• Global pay systems
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•THE REPATRIATION THE REPATRIATION PROBLEMPROBLEM
• Difficult for many organizations • "Reverse culture shock" • Expatriates must relearn own
national and organizational culture
• Includes whole family
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•STRATEGIES FOR SUCCESSFUL STRATEGIES FOR SUCCESSFUL REPATRIATION PROVIDE: REPATRIATION PROVIDE:
• A strategic purpose for repatriation• A team to aid the expatriate• Home country information sources• Training and preparation for the
return• Support for expatriate and family
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•WOMEN EXPATRIATES: WOMEN EXPATRIATES: TWO IMPORTANT "MYTHS"TWO IMPORTANT "MYTHS"
• Myth 1: women do not wish to take international assignments
• Myth 2: women will fail in international assignments because of the foreign culture's prejudices against local women
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•SUCCESSFUL WOMEN SUCCESSFUL WOMEN EXPATRIATESEXPATRIATES
• Foreign not female • emphasize nationality not gender
• The woman's advantage• strong in relational skills• wider range of interaction
options
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•MULTINATIONAL MULTINATIONAL STRATEGY AND IHRMSTRATEGY AND IHRM
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•IHRM ORIENTATIONSIHRM ORIENTATIONS
• Ethnocentric • Polycentric• Regiocentric• Global
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•IHRM ORIENTATION AND IHRM ORIENTATION AND MULTINATIONAL STRATEGYMULTINATIONAL STRATEGY
• Early stages of internationalization = ethnocentric IHRM
• Multilocal strategies = ethnocentric or regiocentric
• Regional strategy = closer to the global
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• International strategy = ethnocentric or polycentric IHRM
• Transnational strategies = a global IHRM
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•CONCLUSIONSCONCLUSIONS
• HRM functions• IHRM challenges• Expatriate managers• The role of women in
multinational organizations• Multinational strategies and
IHRM orientations