International Business take-home exam

International Human Resources

BUAD 841 Fall 2017

Kurt Norder, Ph.D.

International HR

Agenda

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� Things to understand… � Discuss and integrate topics of international HRM

� Expats � Culture � Connect some of the pieces

International HR

What is the point of international human resources?

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� Right people, job, place, time, pay, and duration

� Benefits � Knowledge transfer � Better quality skills at lower rates � Control of operations � Develop leadership � Diffuse the corporate culture

Building competitive advantage

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International HR

Porter’s Diamond of National Advantage Demand Conditions

Firm Strategy, Structure, Rivalry

Factor Conditions

Related & Supporting Industries

Change is Good

• Picky customers and difficult environments make you innovate to become better (price- quality relationship)

• Competition driving evolution through innovation

• Stocks of needed resources (land, labor, capital, raw materials) at reasonable prices

• Do we have sufficient support that enables us to specialize (can outsource for good quality)

• Global suppliers to help share knowledge and team up

• Even potential to integrate forward increases pressure to stay ahead

International HR

Overcome liability of foreignness?

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� If you have an advantage, how do you put that into actions? � Knowledge transfer, usually needs people to transfer them. � Cultural differences (language, norms, teamwork) � Not-invented-here syndrome

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Knowledge Transfer Constraints?

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Knowledge Sharing

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� Interdependence prevails

� Same culture improves knowledge sharing in from peer � Greater acceptance of info and understanding

� Social capital becomes more important for difficult situations � Out to headquarters � In from different cultural peer

International HR

Staffing Approaches?

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� Ethocentric – use home-country

� Polycentric – use locals

� Geocentric – find the best from anywhere � Home, local, or 3rd country

International HR

Which approach and when?

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� Strategy, Structure, Environment Fit?

� Distance?

International HR

Industry Globalization Potential Market Factors

Competitive Factors

Governmental Factors

Cost Factors IGP

• Homogenous needs • Global customers • Global channels • Transferrable marketing

• Interdependence of countries

• Competitors globalize or might globalize

• Favorable trade policies • Compatible technical standards

… wage and conditions

• Common marketing regulations

• Economies of scale and scope • Learning and experiences • Sourcing efficiencies • Favorable logistics Differences in

country costs & skills • Product development costs

International HR

How does the environment influence the org?

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Integration vs. Responsiveness • Scale Economies • similar demand/

standard product • Centralize at HQ • Typical cost leader

• Adapt for local demands to increase value

• Local autonomy • Focused on single

country as the market

• Local differentiator

• Combined, similar to integrated/hybrid

• “Flexible coordination”

• Integrated network

• Little adaptation but still benefit from core competences in foreign locations

Multidomestic Localization

Strategy

International HR

Vertical vs. Horizontal Integration by location Support Activities

Primary Activities

Firm Infrastructure Human Resource Management

Systems & Solutions Material & Equipment

Product Design

Operations Distrib. Marketing

& Sales Service

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International HR

Vertical Integration

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Country 1 (Product Design)

Country 2 (Ops)

Country 3 (Distribution)

Country 4 (Mktg & Sales)

Country 5 (Service)

Tap into location advantages needed for each activity

International HR

Horizontal Integration

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Country 1 (Product Design)

Country 1 (Ops)

Country 3 (Distribution)

Country 3 (Mktg & Sales)

Country 5 (Service)

Multiple locations for the same activity

Country 2 (Distribution)

Country 4 (Distribution)

Country 2 (Mktg & Sales)

Country 4 (Mktg & Sales)

International HR

Neoclassical Structures A Simplified Network Structure

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Mode dynamics (Root)

Dynamic changes in

mode = dynamic

organization

International HR

Pace, Rhythm, Scope, Sequence

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Pace, Rhythm, Scope, Sequence

Lu & Beamish, AMJ 2004, International Diversification and Firm Performance: S-Curve

International HR

What about you?

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� Your experiences… � Culture shock � The relative importance of culture � How you dealt with it?

� Challenges to reaching adjustment and acceptance � Isolation from the locals � Isolation from home