CHAPTER 14:

GLOBAL HUMAN
RESOURCE
MANAGEMENT

Copyright 2005 South-Western. All rights reserved. footer

 International
International Imperative
Imperative

Why
Why organizations
organizations expand
expand internationally
internationally
To
Tocapture
captureenhanced
enhancedmarket
marketopportunities
opportunitiesthat
thatforeign
foreign
countries
countriesmay
maypresent
present
To
Toachieve
achieveeconomies
economiesofofscale
scaleininproduction
production&&
administration
administrationbybyexpanding
expandingscope
scope&&volume
volumeofofoperations
operationstoto
international
internationalmarkets
markets
Keeping
Keepingup upwith
withindustry
industryleaders
leadersmaymayrequire
requireorganization
organization
enter
enterforeign
foreignmarkets
markets
Acquiring
Acquiringownership
ownershipofofforeign-based
foreign-basedorganization
organizationoror
subsidiary
subsidiary

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 How
How International
International &
& Domestic
Domestic HRM
HRM
Differ
Differ
International
International HRM
HRM requires
requires
Managing
Managingbroader
broaderrange
rangeofoffunctional
functionalareas
areas
Becoming
Becomingmoremoreinvolved
involvedininemployees
employeespersonal
personal
lives
lives
Setting
Settingupupseveral
severaldifferent
differentHRM
HRMsystems
systemsfor
for
different
differentgeographic
geographiclocations
locations
Dealing
Dealingwith
withmore
morecomplex
complexexternal
externalconstituencies
constituencies
Participating
Participatinginininternational
internationalassignments
assignmentsthat
thathave
have
heightened
heightenedexposure
exposuretotopersonal
personalrisk
risk

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 International
International Expansion
Expansion

Strategies
Strategies for
for expanding
expanding internationally
internationally
Exporting
Exportinglocally
locallyproduced
producedgoods
goodstotohost
hostcountry
country
Subcontracting
Subcontractingor orlicensing
licensingproduction
productionofofcertain
certain
goods
goodsororservices
servicestotoforeign
foreignpartner
partner
Entering
Enteringinto
intojoint
jointventure
venturewith
withforeign
foreignpartner
partner
Setting
Settingup
upoperations
operations(making
(makingaadirect
directinvestment)
investment)
ininform
formofofforeign
foreignbranch
branchor orsubsidiary
subsidiary

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 Assessing
Assessing Culture:
Culture:
Hofstedes
Hofstedes Cultural
Cultural Differences
Differences
Dimensions
Dimensions
Individualism
Individualismor
or collectivism
collectivism
Individualistic
Individualisticsocieties
societiesvalue
valuedevelopment
developmentofof&&focus
focuson
on
individual
individual
Collective
Collectivesocieties
societiesvalue
valuegroup
grouprelationships
relationships
Power
Power distance
distance
Extent
Extenttotowhich
whichsociety
societyisishierarchical,
hierarchical,&&how
howpower
powerisis
distributed
distributedamong
amongits
itsmembers
members
Uncertainty
Uncertainty avoidance
avoidance
Extent
Extenttotowhich
whichsociety
societyfeels
feelscomfortable
comfortablewith
withambiguity
ambiguity&&
values
values&&encourages
encouragesrisk-taking
risk-taking
Quantity
Quantity versus
versus quality
quality of
of life
life

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 Exhibit
Exhibit14-1
14-1
Assessing
Assessing Culture
Culture

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 Halls
Halls Model
Model of
of Cultural
Cultural Differences
Differences
Time
Time
Importance
Importanceororsense
senseofoftime
timeinindaily
dailyactivities
activities
Space
Space(distance)
(distance)
Amount
Amountofofphysical
physicaldistance
distanceindividuals
individualsattempt
attempttotomaintain
maintainbetween
between
themselves
themselves&&others
others
Material
Materialgoods
goods
Emphasis
Emphasisororinferences
inferenceson
onpossession
possessionofofgoods
goodstotosignify
signifypower,
power,
success
success&&status
status
Friendships
Friendships
Importance
Importanceofoffriendships
friendshipsininconferring
conferringstatus
status
Agreements
Agreements
Considers
Considershow
howagreements
agreementsare
arereached
reached

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 Strategic
Strategic HR
HR Issues
Issues in
in Global
Global
Assignments
Assignments
Approaches
Approaches to
to sending
sending employees
employees abroad
abroad
Administrative
Administrativeapproach
approach
Assisting
Assistingemployee
employeedestined
destinedfor
forinternational
internationalassignment
assignmentwith
with
paperwork
paperwork&&minor
minorlogistics
logistics
Tactical
Tacticalapproach
approach
Managing
Managingrisk
riskor
orfailure
failurefactor
factorof
ofoverseas
overseasassignment
assignmentby by
providing
providingpaperwork
paperworkassistance
assistance&&modest
modestamount
amountofoftraining
training
Strategic
Strategicapproach
approach
Extensive
Extensivesupport
support&&coordination
coordinationof
ofinternational
internationalassignment
assignment
&&strategized
strategizedrepatriation
repatriationprogram
programatatend
endof
ofassignment
assignment

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 Strategic
Strategic HR
HR Issues
Issues in
in Global
Global
Assignments
Assignments
Strategic
Strategic management
management of
of global
global assignments
assignments
1.1. Establish
Establishspecific
specificpurpose
purposefor forassignment
assignment
2.2. Select
Selectappropriate
appropriateemployee
employeefor forassignment
assignment
3.3. Organizational
Organizational&&individual
individualpurposes
purposesfor forassignment
assignmentmust
must
be
beidentified
identified&&matched
matched
4.4. Assess
Assessadaptability
adaptabilitytotohost
hostculture
cultureofofboth
bothemployee
employee&&any
any
family
familymembers
memberswho whowillwillbe
beaccompanying
accompanyingemployee
employee
5.5. Provide
Provideappropriate
appropriatetraining
trainingfor
foremployee
employee&&family
family
members
members
6.6. Simultaneous
Simultaneoustraining
trainingshould
shouldbebeconducted
conductedfor for
headquarters
headquartersstaff
staff

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 Exhibit
Exhibit14-2
14-2
Strategic
Strategic
Issues
Issues

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 Exhibit
Exhibit14-3
14-3
Strategic
Strategic HR
HR Issues
Issues

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 Determining
Determining Expatriate
Expatriate
Compensation
Compensation
Balance
Balance sheet
sheet method
method Higher-of-home-or-
Higher-of-home-or-
Expatriate
Expatriatesalary
salarybased
based host
host method
method
on
onhome
homecountry
countrypay
pay Employees
Employeessalarysalaryatat
Additional
Additionalexpenses
expenses home
homeadjusted
adjustedupward
upward
associated
associatedwith
with totoaccount
accountfor forhigher
higher
relocation
relocation&&assignment
assignment cost
costofofliving
livingLocalization
Localization
Hardship approach
approach
Hardship&&incentives
incentivestoto
determine
determineoverall
overall Salary
Salaryconverted
convertedtotohost
host
reimbursement
reimbursement&& countrys
countrysequivalent
equivalent
compensation
compensationlevel
level when
whenemployee
employeeisison on
permanent
permanentassignment
assignment

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 Four
Four Approaches
Approaches to
to IHRM
IHRM

Make
Make strategic
strategic decision
decision as
as to
to level
level of
of
standardization
standardization desired
desired across
across locations
locations
Ethnocentric
Ethnocentricapproach
approach
Exporting
Exportingorganizations
organizationshome
homecountry
countrypractices
practices&&policies
policiestoto
foreign
foreignlocations
locations
Polycentric
Polycentricapproach
approach
Allowing
Allowingeach
eachlocation
locationtotodevelop
developown
ownpractices
practices&&policies
policies
Regiocentric
Regiocentricapproach
approach
Developing
Developingstandardized
standardizedpractices
practices&&policies
policiesby
bygeographic
geographic
region
region
Geocentric
Geocentricapproach
approach
Developing
Developingone oneset
setof
ofglobal
globalpractices
practices&&policies
policiesapplied
appliedatat
all
alllocations
locations

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 Exhibit
Exhibit14-4
14-4
Setting
Setting Strategic
Strategic HR
HR Standards
Standards

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 Exhibit
Exhibit14-5
14-5
Repatriation
Repatriation

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 Reading
Reading14.1
14.1
Managing
Managing Global
Global Workforce:
Workforce:
Challenges
Challenges &
& Strategies
Strategies
Challenges:
Challenges:
Deployment
Deploymentiningetting
gettingright
rightskills
skillstotoright
rightplace
placeinin
organization
organizationregardless
regardlessofofgeographic
geographiclocation
location
Knowledge
Knowledge&&innovation
innovationdissemination
dissemination&&transfer
transfer
where
whereallallbusiness
businessunits
unitsconcurrently
concurrentlyreceive
receive&&
provide
provideinformation
information
Talent
Talentidentification
identification&&development
developmentofofthose those
employees
employeeswith withabilities
abilities&&skills
skillstotofunction
function
effectively
effectivelyininglobal
globalorganization
organization

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 Reading
Reading14.1
14.1
Managing
Managing Global
Global Workforce:
Workforce:
Challenges
Challenges &
& Strategies
Strategies

Strategies
Strategies for
for managing
managing global
global workforce
workforce
Develop
Developaspatial
aspatialcareers
careersfor
foremployees
employeestotoprovide
providerich
rich
contextual
contextualknowledge
knowledgeofofenvironments
environments&&cultures
culturesProvide
Provide
specific
specificawareness
awarenessbuilding
buildingassignments
assignmentsthatthatdevelop
developcross-
cross-
sensitivity
sensitivityininhigh
highpotential
potentialemployees
employeesininshort
shorttime
time
Utilize
Utilizeexpert
expertSWAT
SWATteams
teamsdeployed
deployedon onshort-term
short-termbasis
basisfor
for
operational
operationalproblems
problemstechnical
technicalprojects
projects
Adopt
Adoptvirtual
virtualsolutions
solutionsby
byusing
usingelectronic
electroniccommunication
communication
technologies
technologiestotoconnect
connectlocal
localemployees
employeestotodistant
distantproblems
problems

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 Reading
Reading14.1
14.1
Diagnosing
Diagnosing Challenges
Challenges
Deployment
Deployment challenge
challenge
Contact
Contacttime
timerequired
required
Extent
Extenttotowhich
whichskills
skillscan
canbe
beapplied
appliedout
outofofcultural
culturalcontext
context
Knowledge
Knowledge &
&innovation
innovation dissemination
dissemination challenge
challenge
Choosing
Choosingamong
amongfourfourstrategies
strategiesdepends
dependsonontechnical
technical
complexity
complexityofofinformation
informationtotobe
beshared
shared&&extent
extenttotowhich
whichitit
must
mustbe
beculturally
culturallyembedded
embedded
Talent
Talent identification
identification &
& development
development challenge
challenge
Organizations
Organizationsshould
shouldselect
selectwell,
well,then
thendevelop
develop

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 Reading
Reading14.2
14.2
Four
Four Seasons
Seasons Goes
Goes to
to Paris
Paris
Model
Model of
of corporate
corporate culture
culture consists
consists of
of
four
four components
components
Underlying
Underlying assumptions,
assumptions, suchsuch as as
subordinates
subordinates should
should fulfill
fulfill job
job requirements
requirements
Values
Values
Espoused
Espoused values
values
Enacted
Enacted values
values

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 Reading
Reading14.2
14.2
Four
Four Seasons
Seasons Goes
Goes to
to Paris
Paris
Employee
Employeeperceptions
perceptionsofofmanagement
managementpractices
practices
culture
cultureisiswhat
whatemployees
employeesperceive
perceivemanagement
management
believes
believes
Cultural
Culturalartifacts
artifacts
IfIfespoused
espousedvalues
valuesare
areenacted,
enacted,culture
culturemay
mayemerge
emerge
in
inwhich
whichsenior
seniormanagement
management& &employees
employeesshare
share
similar
similarservice-relevant
service-relevantthoughts,
thoughts,feelings,
feelings,&
&
patterns
patternsofofbehavior
behavior
Potential
Potentialtotoenhance
enhancecustomer
customervalue
value&&contribute
contributeto
to
competitive
competitiveadvantage
advantage
Flexibility
Flexibilityversus
versusconsistency
consistency
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 Reading
Reading14.3
14.3
Adapting
Adapting to
to Boundaryless
Boundaryless World
World
90%
90% of
of companies
companies base
base international
international selections
selections on
on
technical
technical expertise,
expertise, ignoring
ignoring other
other areas
areas
Openness
Openness toto profound
profound personal
personal transformation
transformation isis
most
most fundamental
fundamental sign
sign of
of expatriate
expatriate readiness
readiness
Personality
Personality aspects
aspects that
that impede
impede adaptation
adaptation
Authoritarianism
Authoritarianism
Rigidity
Rigidity
Ethnocentrism
Ethnocentrism
Clarification
Clarification of
ofexpectancies
expectancies beforehand
beforehand

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 Reading
Reading14.3
14.3
Adapting
Adapting to
to Boundaryless
Boundaryless World
World
Need
Need toto provide
providecontinued
continued hands-on
hands-on training
training
rather
rather than
than just
just pre-departure
pre-departure awareness
awareness training
training
Training
Training isis opportunity
opportunity to to provide
provide social
social support
support
Executives
Executives should
should learn
learn to
to view
view identification
identification
with
with host
host asas compatible
compatible withwith identification
identification with
with
parent
parent culture
culture
Expatriates
Expatriates need
need toto become
become aware
aware of
of
consequences
consequences that that old
old repertoire
repertoire of
of coping
coping
responses
responses hashas in
in host
host culture
culture

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 Reading
Reading14.3
14.3
Adapting
Adapting to
to Boundaryless
Boundaryless World
World
Employer
Employer should
should facilitate
facilitate integration
integration into
into aa local
local
or
or regional
regional network
network of of other
other expatriates
expatriates
Delicate
Delicate equilibrium
equilibriumamongamong multiple
multiple stakeholders
stakeholders
calls
calls for
for skills
skills similar
similar to
to those
those possessed
possessed byby
political
political diplomats
diplomats
Parent
Parent organization
organization should
should not
not create
create additional
additional
role
role conflict
conflict for
for the
the expatriate
expatriate with
with policies
policies that
that
are
are insensitive
insensitive to to cultural
cultural differences
differences

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 Reading
Reading14.3
14.3
Adapting
Adapting to
to Boundaryless
Boundaryless World
World

Repatriation
Repatriation
Feeling
Feeling that
that others
others do do not
not share
share multicultural
multicultural
identification
identification can
can create
create sense
sense ofof isolation
isolation
Frequent
Frequent loss
loss ofof autonomy
autonomy
Unrealistic
Unrealistic expectations
expectations about
about being
being
promoted
promoted upon
upon return
return

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