International HR 1International HR 1

GlobalizationGlobalizationForces for GlobalizationForces for Globalization

Free Trade (EU, NAFTA, WTO)Free Trade (EU, NAFTA, WTO) Political and economic liberalizationPolitical and economic liberalization Decreased cost of transportationDecreased cost of transportation Increase effectiveness of communication technologies Increase effectiveness of communication technologies

People moving between countries in addition to goodsPeople moving between countries in addition to goods State Department: At least 2 million American citizens work abroadState Department: At least 2 million American citizens work abroad Foreign companies account for about:Foreign companies account for about:

6 percent of the U.S. workforce6 percent of the U.S. workforce15 percent of manufacturing employees15 percent of manufacturing employees

8/6/02 Washington Post8/6/02 Washington Post

Over the past 30 years, imports of goods to the United States, and Over the past 30 years, imports of goods to the United States, and exports of American-made goods abroad, have increased to exports of American-made goods abroad, have increased to from 8% to 18% of gross domestic product . from 8% to 18% of gross domestic product .

10/12/02 Washington Post10/12/02 Washington Post

Stages of Stages of InternationalizationInternationalization

Domestic productionDomestic productionBegin exporting productsBegin exporting productsStart international operationsStart international operations

(Need for expatriates)(Need for expatriates)Have operations in several Have operations in several

countriescountries(Multinational)(Multinational)

International integrationInternational integration(Transnational)(Transnational)

Types of OrganizationsTypes of Organizations

International Companies AndInternational Companies Andthe World Economythe World Economy

Their production and distribution extend Their production and distribution extend beyond national boundaries, making it beyond national boundaries, making it easier to transfer technology.easier to transfer technology.

They have direct investments in many They have direct investments in many countries, affecting the balance of countries, affecting the balance of payments.payments.

They have a political impact that leads to They have a political impact that leads to cooperation among countries and to the cooperation among countries and to the breaking down of barriers of nationalism.breaking down of barriers of nationalism.

The Global Environment The Global Environment And ManagementAnd Management

Unified EconomiesUnified Economies Closely partnered nations such as the Closely partnered nations such as the

European Union (EU) have developed into European Union (EU) have developed into strong competitors.strong competitors.

Promotes job growth in trading nations.Promotes job growth in trading nations.Cultural EnvironmentCultural Environment

The communication patterns, religion, values The communication patterns, religion, values and ideologies, education, and social structure and ideologies, education, and social structure of a host country influence how HR is of a host country influence how HR is conducted in that country.conducted in that country.

Cultural Environment of International Cultural Environment of International BusinessBusiness

Issues in International HRIssues in International HRSuccess in International MarketsSuccess in International Markets

Identifying and partnering with local talentIdentifying and partnering with local talentManaging ExpatriatesManaging Expatriates

Moving employees between countriesMoving employees between countriesDifferent Legal EnvironmentsDifferent Legal Environments

Understanding laws which impact your businessUnderstanding laws which impact your business Protecting workersProtecting workers Work councilsWork councils Layoff restrictionsLayoff restrictions Personal information restrictionsPersonal information restrictions Treatment of rewards, options, etc.Treatment of rewards, options, etc.

Domestic versus Domestic versus International HRMInternational HRM

Issues in international HRM in helping Issues in international HRM in helping employees adapt to a new and different employees adapt to a new and different environment outside their own country:environment outside their own country:

RelocationRelocation OrientationOrientation Translation servicesTranslation services

International StaffingInternational Staffing

Expatriates, or Home-country NationalsExpatriates, or Home-country Nationals Employees from the home country who are on Employees from the home country who are on

international assignment.international assignment.Host-country NationalsHost-country Nationals

Employees who are natives of the host country.Employees who are natives of the host country.Third-country NationalsThird-country Nationals

Employees who are natives of a country other Employees who are natives of a country other than the home country or the host country.than the home country or the host country.

Changes in International Staffing over Changes in International Staffing over TimeTime

Hiring Host-Country Hiring Host-Country NationalsNationals

Advantages:Advantages:1.1. Hiring local citizens is generally less costly Hiring local citizens is generally less costly

than relocating expatriates.than relocating expatriates.2.2. Since local governments usually want good Since local governments usually want good

jobs for their citizens, foreign employers may jobs for their citizens, foreign employers may be required to hire locally.be required to hire locally.

3.3. Most customers want to do business with Most customers want to do business with companies they perceive to be local versus companies they perceive to be local versus foreign.foreign.

When to Use Locals?When to Use Locals?

When to use Expatriates?When to use Expatriates?

Selecting and Preparing Selecting and Preparing ExPatsExPats

SelectionSelection Emphasize cultural sensitivity as a selection criteriaEmphasize cultural sensitivity as a selection criteria Establish a selection board of expatriatesEstablish a selection board of expatriates Require previous international experienceRequire previous international experience Hire foreign-born employees who can serve as Hire foreign-born employees who can serve as

“expatriates” Screen candidates’ spouses and families“expatriates” Screen candidates’ spouses and families

TrainingTraining Cultural protocolsCultural protocols ReligionReligion LanguageLanguage Country and politicsCountry and politics

Expatriate ChallengesExpatriate ChallengesCareer BlockageCareer Blockage

Many feel that the home office has forgotten them and Many feel that the home office has forgotten them and that their career has been sidetrackedthat their career has been sidetracked

Culture ShockCulture Shock Many people who take international assignments cannot Many people who take international assignments cannot

adjust to a different cultural environment adjust to a different cultural environment Lack of Predeparture Cross-Cultural TrainingLack of Predeparture Cross-Cultural Training

Only one-third of MNCs provide cross-cultural training Only one-third of MNCs provide cross-cultural training Overemphasis on Technical QualificationsOveremphasis on Technical QualificationsGetting Rid of a Troublesome EmployeeGetting Rid of a Troublesome EmployeeFamily ProblemsFamily ProblemsLoss of Status on ReturnLoss of Status on Return

Recruiting InternationallyRecruiting Internationally

Work Permit, or VisaWork Permit, or Visa Government document granting a foreign Government document granting a foreign

individual the right to seek employment.individual the right to seek employment.Guest WorkersGuest Workers

Foreign workers invited to perform needed Foreign workers invited to perform needed labor.labor.

Skills of Expatriate Managers

CORE SKILLSExperienceDecision-makingResourcefulnessStrategic thinkingAdaptabilityCultural sensitivityChange managementTeam buildingMaturity

AUGMENTED SKILLSTechnical skillsNegotiation skillsStrategic thinkingDelegation skillsChange management

EEO in the International EEO in the International ContextContext

U.S. EEO law applies to international assignments. U.S. EEO law applies to international assignments.

Under the Immigration Control and Reform Act of Under the Immigration Control and Reform Act of 1986, people who are not U.S. citizens but who 1986, people who are not U.S. citizens but who are living and have legal work status in the are living and have legal work status in the United States may not be discriminated against.United States may not be discriminated against.

Foreign national employees of U.S. companies in Foreign national employees of U.S. companies in their own country or in some other foreign their own country or in some other foreign country are not covered by U.S. employment law.country are not covered by U.S. employment law.