Discussion

edina

Mathis_16e_PPT_Ch16_IE.pptx

Home >Human Resource Management homework help >Discussion

CHAPTER 16

Global Human Resource Management

Learning Objectives

Define forces impacting global trade

Discuss three global business approaches

Compare three types of international staffing assignments

Identify typical international compensation practices

Learning Objectives (continued)

Compare labor union issues in various countries

Define four important aspects of developing leaders for a global organization

Managing in a Global Context

Managing various functions becomes complex when an organization operates in multiple countries

Different legal and social contexts create challenges that can make it difficult to ensure that operations run smoothly, ethically, and effectively

Economic Interdependence

Most countries participate in the world economy beyond their own domestic markets

Multinational enterprise (M N E): Organization that has facilities and other assets in at least one country other than its home country

Many economic factors are linked to different political, legal, cultural, and economic systems

Some expand globally as a strategy to reduce costs by finding cheaper labor in developing countries

Global and Regional Alliances

North American Free Trade Agreement (N A F T A), 1994

Promotes free trade between Canada, Mexico, and the United States

European Union

Allows for the free movement of goods and people across the borders of the 28 member states

Largest economic entity in the world

Accounts for nearly one-fourth of the world’s economy

Global and Regional Alliances (continued)

Additional proposed alliances

Transatlantic Trade and Investment Partnership (T T I P) and Trans-Pacific Partnership (TPP)

Foreign policy officials continue to evaluate the merits of joining these multinational groups or favoring a country-by-country trade agreement

Population and Demographic Trends

Population growth has been declining in many developed nations around the world, and people above age 65 are becoming a larger share of the world population

Migration of working age individuals from less-developed countries to more-developed countries can bolster economic growth and progress

Immigration policies instituted by each nation significantly impact the inflow of people into a country and its economic health

Reasons for Global Expansion

Diversifying markets and customer base

Extending the sales life of current products

Reducing dependence on current markets by spreading risk

Countering seasonal fluctuations

Accessing a deeper, more diverse talent pool and cheaper, better supplies/suppliers

Increasing efficiencies/economies of scale, reducing costs, and obtaining investment capital

International Orientations

Organizations approach the international market with a particular orientation

E P R G model outlines the following worldviews:

Ethnocentric: Strong emphasis on home-country practices

Polycentric: Strong emphasis on each country as a unique environment

Regiocentric: Countries considered as aggregates within a region

Geocentric: Emphasis on utilizing the best ideas and practices from anywhere in the world

Global Expansion Methods

Various business approaches require different levels of human resource management involvement

Non-equity approaches demand little from the headquarters H R staff while equity approaches require more assistance from the H R staff

Non-equity business forms: Importing and exporting, licensing and franchising, and piggybacking

Equity business forms: Joint ventures, mergers and acquisitions, and foreign direct investment

Outsourcing and offshoring

Non-Equity Business Forms

Importing and exporting: Buying and selling goods and services outside the home country

Licensing agreement: Organization sells the rights to its products or trademarks to producers

Franchising: Organization grants the right to use its business model and brand

Piggyback: Arrangements when an organization partners with another firm that sells complementary products or services

Equity Business Forms

Joint ventures: Two or more partners who share ownership and risk in the investment

Merger: Two companies combine their businesses to create a new business entity

Acquisition: One company being bought by another, resulting in the acquired company being folded into the acquirer’s business

Foreign direct investment: When a company takes a controlling ownership interest in a business in another country

Outsourcing and Offshoring

Outsourcing: Transferring the management and performance of a business function to an external service provider

Offshoring: A company’s relocation of a business process or operation from one country to another

Cultural Dimensions

Culture: Shared mind-set of a group of people that distinguished them from others

Understanding the differences in national cultures is important when conducting business abroad

Geert Hofstede developed a model to classify country cultures based on various cultural dimensions

The model helps analyze risks of international expansion and determine the appropriate country to include in a global strategy

Geert Hofstede’s Cultural Dimensions

Power distance index (P D I)

Individualism versus collectivism (I D V)

Masculinity versus femininity (M A S)

Uncertainty avoidance (U A I)

Long-term orientation (L T O)

Indulgence versus restraint (I N D)

Global Human Resource Management

Operating in multiple countries requires H R staff to navigate diverse laws and cultural practices in establishing effective human resource programs

Maintaining an appropriate balance between standardization and localization is an ongoing effort

H R challenges created by global operations:

Worldwide population trends that will lead to ever greater workforce diversity

A more dispersed workforce resulting from people working remotely

Global Human Resource Management (continued)

H R professionals should:

Address the new workplace dynamic created by engaging and motivating workers from a distance

Learn about H R demands around the world to adopt effective practices and to prepare for opportunities in their own organizations

Global Staffing Strategies

Optimal solution:

To combine the expertise of local employees with organization-specific knowledge of employees from the home country (headquarters)

Some countries require that the organization employ a certain percentage of workers from the host country

Staffing global assignments involves making selection decisions that impact (or take place in) other countries

Global Employees

Types

Home-country national

An employee working in his or her home country for a firm that is headquartered in a different country

International assignee/expatriate

A citizen of one country who is working in a second country and employed by an organization headquartered in the first country

Host-country national

An employee working in his or her home country for a firm that is headquartered in a different country

Global Employees (continued)

Third-country national

A citizen of one country who is working in a second country for an organization that is headquartered in a third country

Key competencies

Cultural adjustment

Organizational requirements

Personal characteristics

Communication skills

Personal and family concerns

Global Labor Markets

Firms reshore employees (bring jobs back to the home country) for various reasons

Recruiting employees for global assignments may present problems that require different approaches from those used in the home country

Dealing with foreign labor markets can be challenging because recruiting may be regulated and require government approval

H R planning is a key concern in both global and domestic firms

Global Compensation Systems

Annual pay differences among countries can vary significantly

Result from differences in annual working hours

Relate to country culture, norms, and business demands

M N E’s have various options regarding how to approach compensation in diverse locations:

A totally global approach, a totally customized approach for each location, or a hybrid method

Global Compensation Systems (continued)

Globalizing pay policies to attract and retain employees requires management to:

Balance the need for consistent practices throughout the company with the need for differentiating practices based on local input and customs

Monitor the pay level and policy trends in other countries

Global Variable Pay

Must accommodate cultural, legal, and economic differences

Important for retaining key staffers after global mergers and acquisitions

Managers should be trained on how to distribute rewards for maximum impact

Global incentive programs can be challenging since strategies can have varied results in different geographic regions

International Compensation for Expatriates

Primary approaches

Home-country-based approach

Objective is to maintain the standard of living the expatriate had in the home country

Can result in higher employer costs and more administrative complexity than other plans

Host-country-based approach

Compensates the expatriate at the same level as workers from the host country

Employee Benefits around the World

Paid time off benefits

Employers in most countries are required to provide paid holidays, vacation, and sick leave

Health care programs

Financed by the employer, employee, or both

Statutory benefits

Programs of a firm should be compliant in the various countries where they have operations

Global Employees and Labor Relations

M N E’s face particular complexities regarding employment policies and practices

Some firms adopt a comprehensive set of work rules that meet the standards of the most restrictive nation

H R policy decisions should align with the organization’s overall philosophy and global strategy

Unions in the Global Arena

Ability of a country to remain competitive is influenced by its labor laws and attitude toward labor unions

H R professionals should be aware of diverse legal requirements and social mores when operating globally

Unions worldwide are facing changes as the world economy becomes more integrated

International Union Issues

Range of labor concerns is quite wide and varies from nation to nation

Collective bargaining methods vary from country to country

Labor unrest is common, and protests, work stoppages, and strikes occur in many nations

Some nations require codetermination

Codetermination: Union or worker representatives are given positions on a company’s board of directors

Global Labor Organizations

International Labor Organization

Coordinates the efforts of labor unions worldwide and has issued some principles about rights at work

Such coordination is occurring as unions deal with multinational firms with operations in multiple countries

Union Network International (U N I)

Entity composed of unions from numerous countries

Works with other international groups to establish international policies on child labor, worker safety and health, and training

The United States and Global Differences

Union management relations in the United States differ from other countries in addressing the following issues:

Economic issues versus other concerns

United States: Unions focus on improving bread-and-butter issues for their members

Other countries: Unions focus on integration with ruling governmental and political power, activism, and economic issues

The United States and Global Differences (continued 1)

Organization by kind of job and employer

United States: People unionize based on companies or type of work

Other countries: National unions bargain with the government or with employer groups

Collective agreements as “contracts”

United States: Collective bargaining contracts usually spell out compensation, work rules, and conditions of employment for several years

Other countries: Agreements are made with the government and employers, sometimes for only one year because of political and social issues

The United States and Global Differences (continued 2)

Competitive relations

United States: Management and labor traditionally take the roles of competing adversaries who often clash to reach agreement

Other countries: Tripartite bargaining occurs between the national government, employers’ associations, and national labor federations with little conflict or obstruction

Global Assignment Training

Success of an overseas assignment is affected by the orientation and training that expatriates and their families receive before departure

Companies recognize that it is important to prepare workers for overseas assignments and to offer training to smooth the transition

Global employers are providing intercultural competence training for employees sent abroad and those who manage workers in multiple countries

Intercultural Competence Training

Incorporates a wide range of human social skills and personality characteristics

Three components require attention when training expatriates for global assignments

Cognitive: What does the person know about other cultures?

Emotional: How does the person view other cultures, and how sensitive is the person to cultural customs and issues?

Behavioral: How does the person act in intercultural situations?

Intercultural Competence Training (continued 1)

Possible training for the components

Cognitive

Culture-specific training: Traditions, history, cultural customs, and so on

Language course

Emotional

Uneasiness: Social skills training focusing on new, unclear, and intercultural situations

Prejudices: Coaching may be clarifying

Sensitivity: Communication skills course (active listening, verbal/nonverbal cues, and empathy)

Intercultural Competence Training (continued 2)

Behavioral

Culture Assimilator method

International projects

Social skills training focusing on intercultural situations

Global Leadership Development

Competencies needed for global leadership are more complex than those focused on only one country

Managers need to manage paradoxes, appreciate the unique attributes of each context, and communicate effectively across time and geography

GLOBE studies

Resulted in the identification of leadership profiles for various societies or cultures

Global Leadership Development (continued 1)

Suggest that leaders who recognize and value diverse cultures will be more effective than those who view the world from only one perspective

Consulting company I4cp recommends incorporating the following elements into a global development plan:

Make global cultural fluency an organization-wide priority

Tap into the best minds inside and outside of the organization to share knowledge and stories

Global Leadership Development (continued 2)

Offer diverse hard and soft skills development

Leverage strategic workforce planning to determine skills gaps and to identify candidates for succession plans from the global workforce

Leadership development programs for diversified M N E’s should include participants from both developed and emerging economies

Increases knowledge sharing and speeds up the development of all participants

Global Career Concerns

Many global employees experience anxiety about their continued career progression

Employers should take steps to ensure that the experience gained overseas benefits the employee and the firm

Repatriation

Involves planning and training for the reassignment of global employees back to their home countries

Returning expatriates may have concerns about:

Personal finances and reacclimating to the lifestyles in their home country

Global Career Concerns (continued 1)

Their organizational status, such as what jobs they will have, whether their international experiences will be valued, and how they will be accepted back into the organization

Efforts should include focus on the individual employee’s needs and career aspirations and building organizational support to capitalize on the enhanced knowledge base of repatriating workers

Global development

Global management development must focus on developing local managers and global executives

Global Career Concerns (continued 2)

Global competencies should also be developed early in careers, instead of assigning domestic-based senior executives to international positions

Organizations might:

Recruit foreign graduate students into fast-track development programs to staff global positions

Offer international assignments to leaders to improve their work experience

Utilize social networking to enhance training and development

H U M A N R E S O U R C E

MANAGEMENT

VA L E N T I N E M E G L I C H M AT H I S J A C K S O N

SIXTEENTH EDIT ION