International Business

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International Business
International Business 10e Daniels/Radebaugh/Sulli
van

• Chapter Twenty One
• Human Resource Management

2004 Prentice Hall, Inc
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Starting two weeks from today

• Presentations on
• countries or
• regions
• other subjects in global business

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Reminder Optional assignment

• A small but not trivial part of the grade for
  this class is class participation
• As discussed on the first day of class, students
  have the option of writing a self-evaluation of
  their class participation.
• I can underestimate students who participate
  well, but rarely

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• I am partly evaluating how engaged you are in
  class
• In the self-evaluation,
• summarize when you participated or communicated
  with the professor outside class (if you have)
• You may also discuss how you prepare for class
• discuss the quality of your participation/
  preparation

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• Self-evaluations should not exceed one page
• If you did not participate, writing that you
  prepared for class will not get credit.
• But attaching materials (e.g., samples of notes
  you prepared before class) may
• Self-evaluations are due by Dec. 7 (the last day
  of class)

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Should you write a self-evaluation?

• Its probably not necessary if Ive been calling
  on you at least once a week
• Do write a self-evaluation if
• Ive only called on you 2 or 3 times
• Youve prepared and raised your hand and I have
  not called on you

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Chapter Objectives

• Illustrate the importance of HR in international
  business
• Explain unique qualifications of international
  managers
• Evaluate issues that arise when companies
  transfer managers abroad
• Examine alternatives for recruitment, selection,
  compensation, development, and retention of
  international managers
• Discuss how national labor markets can affect
  companies optimum methods of production
• Describe country differences in labor practices
• Examine the effect of international operations on
  collective bargaining

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Factors Making International HR Difficult

• Different labor markets
• Mix of available workers
• Mix of labor costs
• International worker mobility problems
• National management styles and practices
• National orientations
• Strategy and control

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Tiered Approach to International Staffing

• Subsidiaries need people who can manage well
  locally
• Headquarters needs people who can coordinate and
  control worldwide and regional operations

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International HR Managerial Terms

• Locals citizens of the countries in which they
  are working
• Expatriates non-citizen
• Home-country national
• Third-country national

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Headquarters Managers

• Deal at top levels in many countries
• Experience the rigors of foreign travel
• Some have broad duties
• Some are technical specialists

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Managers assigned to foreign subsidiaries

• Face difficulties if they have risen entirely
  through domestic divisions
• Limited knowledge of local culture
• Often isolated
• less access to staff specialists
• difficulty communicating with local staff
• But expatriates often form a strong community in
  many countries

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Filling Foreign Managerial Positions

• Many positions are more difficult to fill than
  domestic positions because
• People dont like to move
• Many are apprehensive about language issues
• When assignments are open-ended, people are
  fearful
• Managers, family fear assignment abroad will
  negatively affect lifestyle
• You may not find a good job when you get back
• Living is more expensive abroad
• There are legal impediments to using expatriates

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Reasons to Use Expatriates

• Lack of locally qualified candidates
• Can control operations according to headquarters
  preferences
• Need to transfer technology abroad while
  retaining control
• Broaden the local subsidiarys understanding of
  the overall corporate system
• Expats gain professional/foreign experience

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Selecting the Proper Expatriate

• Technical competence
• Adaptiveness
• Strengths for self-maintenance
• self-confidence, resourcefulness
• Ability to develop good human relationships
• Flexibility
• Tolerance
• Perceptiveness
• Most common reason for failure is inability of
  the expatriates family to adjust

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Why do many locals resent expatriates?

• Dont stay long enough to be perceived as
  legitimate
• Make unpopular decisions
• Sometimes because theyre needed
• Sometimes because they are building own career
• Because they leave quickly, locals may have to
  clean up their mess

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Cost-of-Living Indexes

• Higher pay for assignments abroad
• Companies increase compensation when foreign cost
  is higher
• They do NOT decrease compensation when foreign
  cost is lower
• They remove the differential when the manager is
  repatriated

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Staffing With Locals

• Locals usually cost less than do expatriates
• They understand local
• Language
• Management styles
• Labor policies and practices
• Localized operations
• May be legally required in some cases

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An option Locally hired expatriates

• Much cheaper
• Understand the local culture and your home
  country culture
• But dont understand your business system
• They may think your system is crazy

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Preparing questions for Nike-Reebok debate

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Extra credit Preparing questions for
Nike-Reebok debate

• In the Nike-Reebok debate we all play roles of
  participants in town meeting to discuss global
  sourcing
• Imagine were in Tower Hall auditorium with
  senior executives of both Nike and Reebok

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Students can play the roles of

• Nike or Reebok employees
• Stockholders
• U.S. labor leaders (or ordinary union members)
• Human rights activists
• Asian workers flown to the U.S. by human rights
  activists
• Economic development officials of Asian countries
• Ordinary concerned citizens
• In this role, its fine to just be yourself

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1 to 3 points extra credit on 2nd midterm for 1
or more questions

• Decide which role you are playing
• Write a question that someone in that role might
  ask Nike or Reebok executives
• Send email to the professor no later than 6 p.m.
  the evening before the debate stating
• the role you are playing, and
• the question.
• wood_rc_at_cob.sjsu.edu

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• The prof will play moderator, and will call on
  many who submit questions
• You dont have to be called on to get extra
  credit, but obviously those with the best
  questions are most likely to be called on

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Pre-Employment Training

• Environment-specific information
• Adaptiveness training
• Training by an unaffiliated company abroad

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Chapter Review

• Illustrate the importance of HR in international
  business
• Explain unique qualifications of international
  managers
• Evaluate issues that arise when companies
  transfer managers abroad
• Examine companies alternatives for recruitment,
  selection, compensation, development, and
  retention of international managers
• Discuss how national labor markets can affect
  companies optimum methods of production
• Describe country differences in labor policies
  and practices
• Highlight international pressures on MNEs
  relations with labor worldwide
• Examine the effect of international operations on
  collective bargaining

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