International Human Resource Management

1
International Human Resource Management
C H A P T E R
11
2
Chapter Vignette

• Motorola and the Secrets of the Orient
• Factories in China, Malaysia and Singapore
• Asian managers utilized
• Cultural sensitivity

3
Recruitment Philosophy and Approach

• Home Country Approach
• Host Country Approach
• Regional Approach
• Global Approach
• Selection Criteria
• Past Practices and Criteria
• Technical Expertise
• Managerial Expertise

4
Characteristics of an Effective International
Executive

• Technical and Managerial Skills
• At various levels different skills are needed
• Interpersonal skills, intelligence, emotional
  stability
• Family Support
• Motives and Desire
• Social Skills
• Language Skills

5
Characteristics of an Effective International
Executive (contd)

• Diplomatic Skills
• How to deal with host government
• Representing the home country
• Maturity and Stability
• Family Factors
• Locally contingent factors
• Older People, Females

6
Personnel Selection Options

• Three Options
• Expatriate Manager
• Host Country National Manager
• Third Country National Manager
• Host Country or Third Country Staffing Criteria
• Same as expatriate Managers
• Additional Criteria
• Language of home country
• Cultural norms of host country

7
Product Life Cycle and HRM

• High Tech or Product Orientation
• Growth and Internationalization (market
  orientation)
• Multinationalization and Price Competition
• Globalization

8
Product Life Cycle and HRM

• High Tech or Product Orientation
• New and Unique Products
• High Price Relative to Direct Costs
• Dominance of Product Development Function
• Home Market
• Monopoly Power
• Buyers (foreign) Absorb the Cost of Mismatch
• Customer Must Speak the language of the MNC
• Customer Must Accept Managerial Practices of MNC
  Ethnocentric
• Personnel Selection- Ability to do the Job

9
Product Life Cycle and HRM

• Growth and Internationalization (Market
  Orientation)
• Competition -gt Expansion to New Markets
• Standardization -gt Price Competition Begins
• Short Product Life Cycle
• Local Responsiveness
• Cultural Adaptability and Sensitivity
• Products Culturally Appropriate
• Selection Technical Competence, Expatriates and
  Locals, Language and Cultural Skills
• At the Headquarters Foreign Skills are Not
  Valued
• Foreign National Do Not Reach to High Levels at
  HQ

10
Product Life Cycle and HRM

• Multinationalization (Price Competition)
• Undifferentiated Products
• Price Competition
• Integration of Worldwide Operations
• Standardization of Products Centralization
• Reduced Importance of Cultural Factors in
  Products
• Personnel Selection - Best People, Other
  Nationals
• Integration by Creating or Assuming
  Similarities
• Generic Products and Services, Economies of Scale
• Home Country Language
• Home Country Values and Culture
• Emphasize Corporate Culture

11
Product Life Cycle and HRM

• Continue
• Integration by Creating or Assuming
  Similarities.
• Ignore Cultural Differences
• Reduce the Impact of Cultural Factors
• Decreasing Importance of Market Segmentation
  Based on Cultural Considerations.
• Home Country or Third Country Managers Who
  Assimilate Into HQs Corporate Culture Advance.

12
Product Life Cycle and HRM

• Globalization
• Top Quality, Least Cost, Differentiated Products
• Attention to Local Tastes of Global Customers
• Global Integration-National Responsiveness
• Home Country Market is Not Dominant
• National Boundaries are Less Important
• Cultural Diversity Within the Firm
• Market Segmentation Based on Culture
• Cultural Sensitivity and Language Skills

13
Expatriate Cultural Adjustment

• Pre Departure
• Previous Foreign Assignments
• Training Cross-Cultural, International
  Management
• Pre-departure Expectations
• After Arrival at Host Country
• Work Related Skills Technical, Functional,
  Language
• Individual Attributes Social, Diplomatic,
  Maturity
• Non Work factors Family, Cultural Distance,
  Locally Contingent

14
International and Intercultural Training

• Aims
• To Reduce Cultural Biases and Develop Global
  Perspective
• To Increase Awareness about Diversity of
  Managerial Practices
• To improve Understanding of Business and
  Management Philosophies and Practices Around the
  World.

15
International Management Education and Training

• Types
• Specific , e.g. Japanese Management
• General or Regional, e.g. Southeast Asian
• Location
• In-house
• Educational and Training Institutions
• Methods
• Documentary
• Business Games
• Role Playing Scenarios

16
Intercultural Training

• Useful for All MNC Managers Operating Abroad
• Expatriates
• Host Country Nationals
• Third Country Nationals
• Intend to Develop
• Self Awareness Recognition of personal
  assumptions, values, needs, etc.
• Cultural Readings To understand inherent logic
  in cultural norms
• Multiple Perspectives The ability to suspend
  judgement about other cultures and appreciate
  others perspective

17
Intercultural Training

• Intercultural Communication
• Send and Receive messages accurately in different
  cultures
• Cultural Flexibility
• Adjust and change expectations and plans in
  accordance with host country cultural
  requirements
• Cultural Resilience to handle cultural shock
• Skills in Building Interpersonal Relationships
• Intercultural facilitation skills
• Manage cultural differences constructively.

18
Training Host-Country and Third-Country Nationals

• Specific Intercultural Training
• Generalized International Management Education
• Introduction and Orientation to the Firm and
  Corporate Culture
• - Purpose, Mission, Policies, etc.
• - Socialization and Indoctrination
• Formal e.g. promotion, salary increase
• Informal e.g. Superior-Sub Relationship
• - Employees Response
• / Managers Favoring Own Culture
• / Host Country the MNC Cultural
  Differences

19
Training Host-Country and Non-Managerial Employees

• Foreign Subsidiaries Need Local Employees
• Technology Transfer- Training Locals
• - Competition for Skilled Labor
• - Observe Cultural Factors e.g. Ethnic Problems
  (e.g. Moslem-Hindu problem)
• - Modify Methods for LDC
• - Cultural Idiosyncrasies of Training, e.g. It
  may not be appropriate to admit a gap in
  knowledge.
• - American Active Learning (by participation) is
  Not Favored Universally

20
Compensation

• Equitable and Adequate Compensation Package
• Consider the Difference in Cost of Living, Taxes
  Exchange Fluctuations, etc.
• Should Result in no Significant Gain or Loss
• Comparable to Other MNC Compensation Packages
• Equitable Compared to Domestic Compensation
• Allow to Transfer Employees Between Subsidiaries

21
Compensation

• Compensation Methods
• - The Headquarters Scale plus Affiliate
  Differential
• - The Citizenship Scale
• - The Global Scale

22
Headquarter and Affiliate Differential Scale

• Cost of Living Allowance
• Tax Equalization
• Childrens Education, Home Leave, Medical
• Inflation and Currency Devaluation
• Expenses for Professional Obligations
• Hardship Bonus for Working Abroad

23
Headquarter and Affiliate Differential Scale

• Citizenship Scale
• Compensate Third Country Nationals
• The Managers Home Country Affiliate
  Differential
• - Global Scale
• - Same salary for the same job Affiliate
  Differential
• - Difficulties
• Hard to Construct
• Technical Aspect may be Measurable and Universal,
  Role Expectations are Not.

24
Headquarter and Affiliate Differential Scale

• Host Country Employees Compensation
• - Pay More than Local to Attract the Best
• - Upward Pressure on Local Wages
• - Problems Differences with Home Country
  Managers