EXAM questions
riri0101IHRM Ch07 (student).pptx
Chapter 7
International Employee Relations
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1
Learning Objectives
Describe the nature of union membership around the world
Describe the evolution and make-up of global employee relations
Explain the relationship between unions and MNEs.
Describe the various strategies with which MNEs approach global employee relations
Describe the various approaches taken to non-union worker representation
Explain the litigation risks in international employee relations
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Global Union Membership
Comparing union membership in different countries around the world is difficult
The strength of trade unions is usually measured by the size of union membership relative to the number of people eligible to join
In some countries where unions are strong, actual membership is small (e.g., Germany)
In other countries where unions may not be so strong, membership may actually be quite large (e.g., Mexico, Japan)
Absolute union membership is largest in countries like Sweden while absolute membership is lowest in countries like the US.
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Evolution of International Labor Relations and Organizations
Some aspects of the early union movement developed as an international movement in the 19th century
International federations of labor divided into two factions at the conclusion of World War II: a Western-oriented group and a communist-supported group
There is strong interest today in the labor movement to cross borders and join together for the achievement of their common labor-related missions
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Evolution of International Labor Relations and Organizations (cont.)
International Federations and Employee Relations in Organizations
World Federation of Trade Unions (WFTU)
Established in 1945 to bring together trade unions around the world in a single organization modeled after the UN
After a split in 1949, it is now primarily a federation of state-run unions from communist countries
International Confederation of Free Trade Unions (ICFTU)
An international confederation of national trade unions established in 1949 after a split with the WFTU
It grouped the major unions in the western world. The ICFTU was dissolved in 2006 to join the ITUC
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Evolution of International Labor Relations and Organizations (cont.)
International Trade Union Confederation (ITUC)
An umbrella organization of national trade union federations (154 countries and 168 million workers) to defend workers’ rights in the era of globalization
Primary mission is the promotion and defense of workers’ rights and interests, through international cooperation between trade unions
European Trade Union Confederation (ETUC)
Established in 1973 to promote the interests of working people and to represent them in EU institutions
Prime objective is to promote the European Social Model by being actively involved in economic and social policy-making at the highest level, working with all EU institutions
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Evolution of International Labor Relations and Organizations (cont.)
World Confederation of Labor (WCL)
An international trade union confederation inspired by the basic values of Christian humanism
Unites autonomous and democratic trade unions from countries all over the world, but mainly from Third World countries
Trade Union Advisory Committee (TUAC) to the OECD
An international trade union organization which has consultative status with the OECD
Interface for labor unions with the OECD and its various committees
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Evolution of International Labor Relations and Organizations (cont.)
Global Union Federations (GUFs)
An international federation of national and regional trade unions representing specific industrial sectors and occupational groups
Most major unions are members of one or more GUFs
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Unions and Multinational Enterprises
Locate work in countries with lower social protections (no unions or weak unions) and wages and benefits
Force workers facing competition from workers in other countries to “bid down” wages and benefits in order to keep their jobs
Unions view MNEs as being able to:
Restructure operations in countries where the costs of work force adjustments are lowest
Outlast workers in labor disputes because cash flows are maintained by operations in countries where there are no disputes
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Unions and Multinational Enterprises
Barriers to Multinational Bargaining
Widely varying industrial relations laws and practices among countries
No central, international authority for global labor relations or labor law
Major economic and cultural differences among countries
Employer opposition
Reluctance of national level union leaders
Absence of a centralized decision-making authority for unions
Lack of coordinated activities by unions across national boundaries
Differing national priorities
Employee unwillingness to subordinate local concerns to the concerns of foreign workers
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Unions and Multinational Enterprises
Dealing with International Labor Organizations
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What rules will apply to the resolution of disputes?
What rules will apply to the process of negotiations?
What law will cover the negotiations, e.g., between companies in two or more countries or between companies and their unions in multiple countries?
MNE AND LABOR RELATIONS
MNEs must share decision-making power with unions (and/or other representatives of employees, such as works councils) and, often, agencies of government, to greater or lesser
IHR departments within MNEs follow one of these seven approaches to labor/employee relations in the global context (see Exhibit 7.2)
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EVOLUTION OF LABOR RELATIONS IN DIFFERENT COUNTRIES
In some countries (e.g., Canada, the United States, Germany, and Japan), the focus of union activity is basically economic
In other countries, particularly England, France, Italy, and those in Latin America, unions tend to be very political and generally achieve their objectives through political action rather than through direct collective bargaining
All of the questions in Exhibit 7.3 illustrate potentially significant differences between labor relations practices in different countries. This is just one of the many areas of complexity with which IHR managers and MNEs must learn to cope.
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Non-Union Worker Representation
Work Councils
Have the right to receive information and to be consulted relative to decisions the firm makes that will have social and economic consequences for employees
Codetermination
The legal requirement that employees participate on supervisory boards or boards of directors
Requires management to obtain their agreement when major strategic decisions are to be made.
Worker Co-operatives
A third form of employee relations involves worker co-operatives
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Litigation Risks in International Employee Relations
One of the greatest pressures for IHRM and MNEs is the increased possibility of litigation
In recent years there has been a significant upward trend toward holding MNEs accountable in various courts for their protections (or lack thereof) of employee and human rights in their foreign operations
MNEs are being sued in their home jurisdictions on the basis of allegations of breaches arising from the firm’s activities in foreign jurisdictions
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__MACOSX/._IHRM Ch07 (student).pptx
IHRM Ch09 (student).pptx
CHAPTER 9
INTERNATIONAL RECRUITMENT,
SELECTION, AND REPATRIATION
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Learning Objectives
Describe the broad issues involved in staffing subsidiaries with international assignees or expatriates
Describe the various issues involved in recruiting international assignees or expatriates
Describe the general process of selection of international assignees (IAs) for international assignments and the issue of failure in an IA assignment and reasons for it
Describe the characteristics of successful IA selection programs and exemplary practices
Explain the essential nature of repatriation
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recruiting, selecting, and repatriating
Recruiting, selecting, and repatriating traditional PCNs, or expatriates
Recruiting involves searching for and attracting qualified applicants to create a pool of candidates for screening for possible hiring.
Selecting focuses on gathering and analyzing information about applicants in order to select the most suitable person or persons for the job.
Repatriating refers to the process of bringing international assignees (IAs) and their families back “home” from their foreign assignments.
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Staffing With Expatriates or International Assignees: An Introduction
“Historically, the term “expatriate,” as used by companies, referred to employees who were relocated from the parent company or headquarters to foreign subsidiaries or “overseas” operations.
Exhibit 9.1 illustrates the four common options used by MNEs to staff their foreign operations.
Secondment
Transfer of employment
Global employment company,
Dual employment are used less frequently
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The International Recruitment Function
The process of searching for and attracting qualified applicants to create an applicant pool
Begins after an organization’s immediate and long-term labor needs are defined
Several questions should be addressed before the recruiting process starts
How many applicants does the organization need in the short term (less than a year) and the long term (one to three years)?
Does the organization need applicants with short-term commitment or long-term commitment?
Does the organization offer compensation packages below market average, at market average, or above market average?
Does the organization want applicants who are different from the company’s current employees?
What type of competencies does the organization need in new applicants?
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The International Recruitment Function (cont.)
Sourcing
Process of finding candidates from geographically dispersed labor markets
Two broad recruiting sources available to organizations
Internal Recruiting Sources
Find candidates from within the organization
External Recruiting Sources
Find candidates from outside the organization
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The International Recruitment Function (cont.)
Internal Recruiting Sources
Global Talent Management Inventories
In-house Global Leadership Programs
Former/Current Expatriates
Nominations
Internal Job Posting/Intranet
International Succession Planning Programs
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The International Recruitment Function (cont.)
External Recruiting Sources
Employee Referrals
Job Fairs
Company Internet Sites
Executive Search Firms
Professional Associations or Networks
Competing Firms
Global Leadership Programs in Universities and Colleges
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The International Recruitment Function (cont.)
Both external and internal recruiting sources may be used to find candidates for foreign assignments or HCNs
Attracting candidates to work internationally raises an important challenge for MNEs
How to find individuals interested in international work and those interested in permanent international careers
MNEs need to find candidates with high receptivity to international careers
Refers to an individual’s attitude toward international careers
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The International Recruitment Function (cont.)
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Rosemary Morlin (RM) - Change 'Children education allowance' to 'Children's educatoin allowance'
Receptivity to International Careers
Personality
Cross-cultural competencies
Prior international experience
Age
Family status
Marital status
Education
Destination country
Opportunities for career support
Company culture
Career and repatriation planning
Gender
Length of the foreign assignment
Overseas health care plan
Income tax equalization policy
Host country housing assistance
Spouse job assistance
Spouse’s willingness to travel overseas
Children education allowance
The International Recruitment Function (cont.)
An important challenge for MNEs, especially if recruiting candidates from an external labor market, is to develop an employer reputation that attracts candidates to the organization.
Employer reputation (also known as employer brand) refers to the evaluation by potential candidates of an organization as a desirable place of work and to seek international experience.
Another challenge for MNEs is to manage talent shortages that occur when employers cannot find workers with the needed competencies.
Talent shortages occur in countries during times of economic boom, as well as in times of economic uncertainty. This is more serious in in the service sector, especially when economic conditions improve
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The International Selection Function
Selection
Refers to the process of gathering and analyzing information about applicants to select the most suitable person(s) for the job
The selection decision for international assignees is critically important. Errors in selection can have major negative impact on the success of overseas operations as well as on the careers of relocated managers.
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The International Selection Function (cont.)
Selection Decisions
Successful expatriate experience
From the perspective of HQs, an important consideration in making good selection decisions is to fully understand the process of a “successful expatriate experience” (see Figure 9.1)
Shortage of Potential IAs
Increasingly the problem of selection of international assignees involves finding employees with the necessary skills to function successfully in the new “global” environment and convincing them to take on the assignment
Competency Profile
The competency profile of an assignee is an important aspect of the selection decision making process. Exhibit 9.2 lists the skills that are being cited as important for the twenty-first-century expatriate manager
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Rosemary Morlin (RM) - Insert em-rule after 'Cultural requirements' in A
The International Selection Function (cont.)
Critical Selection Criteria for International Assignments
Cultural Adaptability
Job Suitability
Desire for Foreign Assignment
Candidate for International Assignment
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The International Selection Function (cont.)
International Assignee Selection Methods
Selection Methods
Self-Selection
Job Posting and Bid
Recommendations
Interviews
Formal Assessment
Committee Decision
Career Planning
Assessment Center
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Mistakes and Failures
International Assignment Failures
Dropout
Turnover upon repatriation
Types of Failures
Finishing the assignment but without cultural adaptation or acceptance of the local experience
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Mistakes and Failures (cont.)
Definition of Expatriate Failure (See Exhibit 9.3)
Usually defined in terms of early return home or termination, but could also be defined in terms of;
Poor quality of performance in foreign assignment;
Employee not fully utilized during assignment;
Personal dissatisfaction with experience (by expatriate or family);
Lack of adjustment to local conditions;
No acceptance by local nationals;
Damage to overseas business relationships;
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Mistakes and Failures (cont.)
Exhibit 9.3 Reasons for Expatriate Failure
Inability of spouse/partner to adjust or spouse/partner dissatisfaction
Inability of expatriate to adjust
Other family-related problems
Mistake in candidate/expatriate selection or just does not meet expectations
Expatriate’s personality or lack of emotional maturity
Expatriate’s inability to cope with larger responsibilities of overseas work
Expatriate’s lack of technical competence
Expatriate’s lack of motivation to work overseas
Dissatisfaction with quality of life in foreign assignment
Dissatisfaction with compensation and benefits
Inadequate cultural and language preparation
Inadequate support for IA and family while on overseas assignment
Sources adapted from National Foreign Trade Council (NFTC), Society for Human Resource Management (SHRM), and GMAC Global Relocation Services (GMAC GRS)/Windham International Global Relocation Trends Annual Survey Reports, 2000-2014; Stroh, L. K., Black, J. S., Mendenhall, M. E. and Gregersen, H. B. (2005), International Assignments: An Integration of Strategy, Research, & Practice, Mahwah, NJ/London: Erlbaum; and Tung, R. L. (1987), Expatriate assignments: Enhancing success and minimizing failure, Academy of Management Executive, 1 (2): 117–126.
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Mistakes and Failures (cont.)
MNE mistakes in IA Selection:
Decision to relocate people made with too little lead time.
Assignees not provided with any or adequate cultural training or language training
Spouses/partners not included in the decision to relocate
Spouses/partners and children not included on pre-assignment visits
Spouses/partners and children not included in language lessons
Spouses/partners and children not included in cultural training
Spouses/partners do not receive counseling on jobs and other opportunities
Spouses have no home office contact
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Mistakes and Failures (cont.)
Challenges to successful staffing with IAs:
Spouses or partners
Language
Women expatriates
Lifestyle
Localization or “going native”
Career development
Costs of international assignments
Inpatriation
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Successful Expatriation and “Best Practices”
Staff subsidiaries, at least below the top management levels, with local nationals
The expensive international assignee and their not-infrequent failures in assignment, has led in recent years to greater reliance on local managers
TCNs tend to be used in areas where there is a shortage of people with the skills the firm needs or relatively free movement of people from one country to another
IHR managers must manage all forms of visas and immigration issues their firms confront or know where to get the necessary expertise to ensure the firm adheres to every nation’s laws and policies
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Repatriation
At the end of the assignment, the IA
Repatriates to the home country
Redeployed to another country
Becomes localized in the host country
The move “back home” can be more difficult than the original move abroad
The IAs should stay with the organization long enough to share their experiences
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Repatriation (cont.)
Challenges on re-entry
Firms often fail to use the experience or knowledge gained internationally and most likely do not consider the career implications of this experience
The repatriate is reassigned to a position similar to the one he or she left two or three years before while their colleagues may have been promoted
Repatriates often find it difficult to relate the value of their global experience to managers with a domestic focus
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Repatriation (cont.)
Organizational Support for Repatriates
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Rosemary Morlin (RM) - Change 'relearn' to 're-learn'.
Rosemary Morlin (RM) - There is no room on this slide for the copyright line.
Before the foreign assignment
Career planning needs to begin prior to an international assignment
Updated regularly during the assignment
Assignment needs to be part of a larger plan for the firm
During the foreign assignment
Regular communication between the home office and the expatriates.
Provided with opportunities to travel back to the home country to share experiences and knowledge
Assigned mentors to guide future career development
After the completion of the foreign assignment
Reverse cultural shock is often experienced by the IA
Relearn original culture and lifestyle
Prepare expatriates for the move back home
__MACOSX/._IHRM Ch09 (student).pptx
IHRM Ch01 (student).pptx
Chapter 1
The Internationalization of Human Resource Management
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1
Learning Objectives
Describe the many drivers of the internationalization of business
Describe the growth and spread of internationalization
Describe the different settings of international human resource management
Discuss the development of international human resource management
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International Human Resource Management
The study and application of all human resource management activities as they impact the process of managing human resources in enterprises in the global environment.
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The Drivers of the Internationalization of Business
Many enterprises, large and small, from all countries (developed economies and emerging) are already global—or are in the process of going global. There are many drivers of this internationalization of business
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Drivers
Trade Agreements
Search for new markets and reduced costs
Rapid and extensive global communication
Rapid development and transfer of new technology
Improving global education and a global talent pool
Increased travel and migration
Knowledge sharing
E-commerce
Homogenization of culture and consumer demands
TRADE AGREEMENTS
Trade between countries and within regions of the world is constantly increasing on a global basis, regionally, and thorough bilateral trade treaties between two countries
Decreased trade barriers and open markets have resulted in faster-growing economies throughout the world
Local and national governments support and encourage growing cross-border trade and foreign investment
The center of global trade is moving away from the developed countries of Western Europe, North America, and Asia Pacific to China, South Asia, and even Latin America, Eastern Europe, the Middle East, and Africa
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SEARCH FOR NEW MARKETS AND REDUCED COSTS
Global competition comes from anywhere and everywhere
Competition forces organizations to search for new markets and revenues and lower costs, often best found in other countries
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RAPID AND EXTENSIVE GLOBAL COMMUNICATION
The technological revolution (e.g., the internet) has made global communication much easier, quicker, cheaper, and more varied
Enables the spread of information (on a global basis) about
How people live
What they think
What they want
Creates global expectations for an ever-increasing quality of life
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7
RAPID DEVELOPMENT AND TRANSFER OF NEW TECHNOLOGY
New technologies are developed around the world and are made available everywhere
New technologies make it possible to grow and manufacture products and deliver services with world-class quality and prices everywhere
Modern education and information technology allow every country to play a part in this global economy
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IMPROVING GLOBAL EDUCATION AND A GLOBAL TALENT POOL
Improving education around the world is enabling firms everywhere to produce world-class products and services
No country or set of countries has an overriding advantage in the global economy
There is now a global talent pool that allows firms to operate almost anywhere in the world today
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INCREASED TRAVEL AND MIGRATION
International travel has become easier, quicker, and cheaper
Hundreds of millions of people travel across national borders every year, for business and pleasure
They see how people in other countries live and experience goods and services that are available, all of which may be better than what is known at home
Millions of people move to other countries to work
Relocate, usually for a limited time
Fill jobs for which there are not enough local workers
Flee natural disasters or political conflicts
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KNOWLEDGE SHARING
Firms operating internationally “export” their management philosophies and techniques to their foreign subsidiaries
Spread their knowledge and their company cultures everywhere
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E-Commerce
The World Wide Web and global transportation and logistics services have made it possible for large, as well as small, firms to conduct business virtually
If a business or an individual has a website, its business is global—anyone, from anywhere in the world who has access to the web has access to that website
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HOMOGENIZATION OF CULTURE AND CONSUMER DEMANDS
Integration of cultures and values have led to common consumer demands for some types of products and services throughout the world
Distinct differences in culture across countries remain
Firms operating internationally need to be sensitive to these local differences
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THE GROWTH AND SPREAD OF INTERNATIONALIZATION
Internationalization vs. globalization
Both terms refer to the ever-increasing interaction, interconnectedness, and integration of people, companies, cultures, and countries
The United Nations estimates (2010) that there are more than 82,000 large multinational enterprises (referred to by the UN as transnationals) with more than 870,000 affiliates that employ more than 77 million people worldwide (not counting sub-contractors and outsourcing).
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THE GROWTH AND SPREAD OF INTERNATIONALIZATION (CONT.)
Business rankings found in publications such as Fortune Global 500 and Bloomberg Business Week focus on the largest global firms
Rankings focus on large, publicly traded firms
Findings illustrate that the global economy increasingly involves all kinds of products and services from around the world
IHRM plays an important role in attaining ranking
HR is called upon to recruit, select, develop, and retain work force talent that can achieve internationalization and global competitiveness
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THE GROWTH AND SPREAD OF INTERNATIONALIZATION (CONT.)
The United Nations Conference on Trade and Development (UNCTAD) tracks the world’s Transnational Corporations (TNCs), analyzing how important these firms are to the global economy.
UNCTAD developed the TNI—Transnational Index, based on the composite of a firm’s average percentage of its foreign assets, foreign sales, and foreign employment to its total assets, sales, and employment, which identifies the relative importance of foreign business activity to the world’s largest firms.
See Exhibit 1.2
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DIFFERENT SETTINGS OF INTERNATIONAL HUMAN RESOURCE MANAGEMENT
Internationalization of HRM occurs in many different settings
HRM managers will confront at least some aspects of internationalization
“No place to hide” for HRM professionals
HRM professionals must become competent in IHRM issues in almost every job setting .
Four specific settings:
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Headquarters of multinationals
Home country subsidiaries of foreign-owned firms
Domestic firms
Government agencies and non-governmental organizations
HEADQUARTERS OF MULTINATIONALS
HRM professional work in the central or regional headquarters of the traditional MNE
This setting is most common for HR managers
Headquarters use parent company HRM policies/practices to its foreign subsidiaries or use those that are common in host countries
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HOME COUNTRY SUBSIDIARIES OF FOREIGN-OWNED FIRMS
HR managers works in their home country but are employed by a local subsidiary of a foreign MNE
HR manager will have to integrate a local culture and organizational culture into the operations
Different communication styles, worker motivation philosophies, and organizational structures set in place by the parent company can cause major problems for the local HR manager
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DOMESTIC FIRMS
Confront many complexities of international business, particularly as they relate to IHRM
Referred to as “domestic multinationals”
Hiring—or recruiting—of immigrants can lead to many of the same internationalization concerns as those faced by traditional MNEs
Can establish small offices in other countries or recruit talent “overseas” in order to meet needs for specialized skills
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GOVERNMENT AGENCIES AND NON-GOVERNMENTAL ORGANIZATIONS
Government agencies, their embassies, and the hundreds of non-governmental organizations (NGOs) are also global in scope
Send hundreds of people from parent countries to overseas operations
Employ many local and third country people to staff their activities around the globe
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DEVELOPMENT OF INTERNATIONAL HUMAN RESOURCE MANAGEMENT
HRM managers are being called upon to contribute increasing expertise to internationalization
Several IHRM-related questions need to be answered within each multinational entity
The success or failure of an enterprise is often a function of how it handles IHRM issues
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International HRM vs. Domestic HRM
IHRM is responsible for more HR functions
IHRM is responsible for a broader expertise and perspective
IHRM is responsible for greater involvement in people’s lives
IHRM is responsible for dealing with and managing wider mix of employees
IHRM is responsible for more external factors and influences
IHRM is responsible for a greater level of risk
DEVELOPMENT OF INTERNATIONAL HUMAN RESOURCE MANAGEMENT (CONT.)
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Establishment of Global Professional in Human Resources (GPHR) certification by the Human Resource Certification Institute (HRCI) in 2003 was turning point in the professionalization of IHRM
Field continues to grow as a business discipline and academic field of study
As organizations have internationalized, so has IHRM
EVOLUTION OF THE INTERNATIONAL HUMAN RESOURCE MANAGEMENT PROFESSIONAL
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__MACOSX/._IHRM Ch01 (student).pptx
IHRM Ch06 (student).pptx
Chapter 6
International Employment Law, Labor Standards, and Ethics
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1
Learning Objectives
Describe the three major legal systems and their key differences
Describe international labor law and standards and explain their impacts
List and describe the goals of the various international trade agreements
Describe how EU directives impact IHRM.
Identify the major issues impacting IHRM with regard to immigration/visas, personal data protection, anti-discrimination and harassment, termination and reduction in force, and intellectual property
Integrate existing employment laws and regulations, ethical standards, CSR, and corporate governance into IHRM policies and practices
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The Institutional Legal Context of International Business
Common law
A constitution enunciates a few, long-standing, general principles to which everyone is subject. The law, then, is based on tradition as stated in the constitution
Civil code or law
Based on an all-inclusive system of written rules, of which there are three types: commercial, civil, and criminal
Religious law
Most common of which is Islamic law, or Sharia, which refers to the “way” Muslims should live or the “path” they must follow
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Establishment of Labor Standards By International Institutions
ILO Declaration on Fundamental Principles and Rights at Work
Freedom of association and the effective recognition of the right to collective bargaining;
elimination of all forms of forced or compulsory labor;
effective abolition of child labor;
elimination of discrimination in respect of employment and occupation.
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International Organizations
United Nations
Plays a relatively insignificant role in establishing employment laws or standards
Until recently, the UN only operated in this domain through agencies such as the International Labor Organization
International Labor Organization (ILO)
Primary goal is to improve working conditions, living standards, and the fair and equitable treatment of workers in all countries
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International Organizations
The Organization of Economic Cooperation and Development(OECD)
Focus is broader than that of the ILO
Coordinates economic policy to address globalization issues through the promotion of economic, environmental, and social policy among its members
World Bank and International Monetary Fund (IMF)
Research on the relation between trade policy reform and labor markets (wages, unemployment, etc.)
Protection of “social safety nets” during structural reforms of economies
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International trade organizations and treaties
World Trade Organization (WTO)
Replaced General Agreement on Tariffs and Trade (GATT)
Defers to ILO for pursuit of global labor standards
European Union (EU)
Social Charter sets out 12 principles of workers’ fundamental rights
Established the European Social Fund to promote worker mobility
Adoption of employment standards prevents locating of MNE in pursuit “softer” employment standards
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International trade organizations and treaties (cont.)
North American Free Trade Agreement (NAFTA)
North American Agreement on Labor Cooperation (NAALC)
Bilateral agreements linking liberalization of trade and labor standards
Latin American and Asian trade agreements
A number of trade treaties have been organized and signed among countries in Latin America and Asia
Mercosur/Mercosul (e.g., Argentina)
The Andean Community (e.g., Bolivia)
The Association of South-East Asian Nations (ASEAN) (e.g., Cambodia)
Asia-Pacific Economic Cooperation (APEC) (e.g., Australia)
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Commercial Diplomacy
An emerging interdisciplinary field that refers to the processes of influencing foreign government policy and regulatory decisions that affect global trade
Involves
Trade negotiations (e.g., tariff and non-tariff trade barriers)
Impact of policy on decision-making (e.g., business interests)
Government regulations (e.g., affecting banking)
Legislation (e.g., anti-trust/competition law)
Standards (e.g., health, safety)
Industrial subsidies (e.g., agricultural, R&D)
Corporate conduct (e.g., corruption and bribery)
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Global Legal/Regulatory Context of MNEs
What IHR Managers must do:
Comply with the laws of the countries in which it operates
Requires knowledge of local laws and regulations
Comply with international standards and supranational regulations
Requires knowledge of international labor standards and supranational binding regulations
Comply with the extraterritorial laws of its own country
Requires knowledge of extraterritorial laws
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Global Legal/Regulatory Context of MNEs (cont.)
National Laws and Regulations
Employment laws vary significantly among countries
IHR should use local HR practitioners when possible
Supranational Laws
Laws that are either directly binding on member states or indirectly binding on employers
Directives seek to harmonize (reduce the legal diversity of) legislation among member states
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Global Legal/Regulatory Context of MNEs (cont.)
Extraterritorial Laws
Are laws that apply beyond the sovereign territory of the nation that enacted them
Apply only if they do not conflict with host county laws (foreign compulsion defense)
Examples of US Laws with Extraterritorial Intent
Title VII of the Civil Rights Act
Age Discrimination Act
Americans with Disabilities Act
Foreign Corrupt Practices Act
Sarbanes-Oxley Act
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Global Legal/Regulatory Context of MNEs (cont.)
Integrated Enterprise Test
Interrelation of Operations
Common Ownership or Financial Control
Common Management
Centralized Control of Labor Relations
Factors Determining Integration
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Global Legal/Regulatory Context of MNEs (cont.)
Application of National Law to Local Foreign-owned Enterprises
Apply to local foreign-owned commercial enterprises
Friendship, commerce, and navigation (FCN) treaties make exceptions for key parent-country personnel of commercial entities
Foreign government-owned are exempted from national laws and civil claims
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Comparative Law
Immigration and Visas
Personal Data Privacy/Protection
Termination and Reduction in Force
Intellectual Property
Anti-discrimination
Major Issues for IHRM
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The International Framework of Ethics and Labor Standards
What is right and wrong in business conduct across borders and the impact of cultural (country and company) variances on ethical conduct of MNEs
International ethics deals with issues of corruption and bribery, and the various ethical dilemmas that MNEs face in the conduct of their international activities
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International Ethics and Culture
Difficulties in understanding and working with another country’s practices are unavoidable
Differing country cultures view various employment and business conduct issues, such as bribery, gifts or favors, tax evasion, or child labor, differently
In the area of global ethics, even the best-informed, best-intentioned executives often have to rethink their assumptions
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International Ethics and Culture (cont.)
Ethical Relativism
Suggests that what is right is whatever a society defines as right
This definition may be at the individual (individual relativism) or at the societal (cultural relativism) level
Ethical Absolutism
Takes the view there is a single set of universal ethical standards or principles, which apply at all times, in all circumstances, in all cultures
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Ethical Dilemmas in IHRM
Example:
An employment practice that is illegal or viewed as wrong in the home country but is legal or acceptable in the host country
Tolerating Cultural Diversity While Avoiding Moral Recklessness:
Why is the practice is acceptable in the host country but not at home?
Is it possible to conduct business successfully in the host country without undertaking the practice?
Is the practice a violation of a fundamental right?
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Ethical Dilemmas in IHRM (cont.)
Assurance of Ethical Behavior and Conduct
Develop a clear set of core values as the basis for global policies and decision making
Train international employees to ask questions that will help them make business decisions that are both culturally sensitive and flexible within the context of those core values
Balance the need for policy with the need for flexibility or imagination
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Corporate Social Responsibility (CSR), Corporate Governance, and Sustainability
Is the continuing commitment by business to:
Behave ethically and to contribute to the economic development of their communities
To improve the quality of life of their work forces, their families, as well as society at large
Makes MNEs aware that they produce both benefits and harm when operating globally
Can be viewed on a continuum of providing value from stockholder to external stakeholder
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Corporate Social Responsibility (CSR), Corporate Governance, and Sustainability (cont.)
Umbrella of CSR Programs
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Corporate Social Responsibility (CSR), Corporate Governance, and Sustainability (cont.)
Implementing a CSR Program
Develop a global CSR policy
Obtain a high level of support
Communicate CSR activities and policy
Create a CSR culture
Provide adequate training
Install reporting and advice mechanisms
Include CSR in management’s performance management
Lead by example
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Corporate Social Responsibility (CSR), Corporate Governance, and Sustainability (cont.)
Corporate Governance
Refers to the basis upon which decisions are made in organizations
Involves the structure and relationships that determine how corporate objectives are met and regulated by the different performance monitoring mechanisms—the management team, board of directors, investors, and shareholders
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Corporate Social Responsibility (CSR), Corporate Governance, and Sustainability (cont.)
Corporate Sustainability
Is defined as meeting the needs of the present without compromising the ability of future generations to meet their own
Determining Sustainability
Is the decision fair to employees?
Is the decision sustainable in the long run?
Is the decision green in terms of the carbon footprint?
Is the decision-making process transparent and open for scrutiny?
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Corporate Social Responsibility (CSR), Corporate Governance, and Sustainability (cont.)
Development of a Strategic Global Code of Conduct Policy
MNEs need to develop strategic policies to establish a code of conduct that defines acceptable behavior in terms of employment relations
Codes of conduct should be defended as the “company culture”
Remove the possibility of managers disagreeing with certain practices because they perceive them to go against local or national cultural practices
The decision to abide by certain labor standards is based on the defined company culture and policies, not on any given individual biases or preferences
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__MACOSX/._IHRM Ch06 (student).pptx
IHRM Ch02 (student).pptx
Chapter 2
Strategic International Human Resource Management
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1
Learning Objectives
Describe the development of SIHRM and the process of international strategic management
Describe the evolution of the MNE in terms of various stages of internationalization and the methods firms use to enter international markets
Describe the process for developing MNE strategy and IHRM strategy and the relationship between the two
The extent and nature of research into the practice of SIHRM
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Diamler-Benz loses $20 billion on chrysler
2
Strategic International Human Resource Management
SIHRM focuses on creating and implementing IHRM policies and practices that help achieve an MNE’s international strategy
Involves the strategic management of the IHR function and department itself
In an ideal world, a firm conducting international business will be actively engaged in strategic planning and strategic management process on a global basis (see Figure 2.1).
A strategy signals an organization’s commitment to specific markets, competitive approaches, and ways of operating
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Evolution of the Multinational Enterprise
As a firm internationalizes, it moves through stages
In each stage it must make a choice of methods for market entry
With each stage, the degree of international activity increases and IHRM responsibilities become increasingly complex
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Internationalization Process and Methods for Market Entry within the Five Stages
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MNE Business Strategy
Provides a direction for managing various subsidiaries
Primarily guided by the extent of integration and/or local responsiveness required by the firm to manage its worldwide operations
Integration
Defined as the extent to which the subsidiaries and the headquarters develop a unified whole
Local responsiveness
Defined as the extent to which subsidiaries respond to local differences
Why do you need to be “integrative” or “locally responsive”?
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Types of strategic business approaches
Global Unified strategy implemented for all countries regardless of their cultural and national differences | Transnational Maximizes responsiveness and integration by being global and multi-domestic at the same time |
International Simplest business strategy, requiring limited local responsiveness and limited integration | Multi-Domestic Responds to the high needs, values, and demands of a local market |
Integration
Local Responsiveness
GE, Toyota, Total, Royall Dutch Shell, ExxonMobile, Vodafone Group
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GE, Toyota, Total, Royall Dutch Shell, ExxonMobile, Vodafone Group successfully transnational strategy as right now
7
Headquarters’ International Orientation and MNE Business Strategy
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Ethnocentrism: 民族优越感
Poly-centrism or Regio-centrism:多中心主义或区域中心主义
Geocentrism: 地心说
8
The Orientation of Senior Executives
Degree of domination of the MNE headquarters over subsidiary management and HR practices as compared to the degree of localization of subsidiary practices
Ethnocentrism
Geocentrism
Poly-centrism or
Regio-centrism
The Orientation of Senior Executives
Ethnocentrism
Managers use a home-country standard as a reference in managing international activities
Nissan (Nissan’s earliest exports were cars and trucks that had been designed for mild Japanese winters; the vehicles were difficult to start in many parts of the United States during the cold winter months)
Polycentrism or Regiocentrism
Host-country cultures and practices assume increased salience显著 for managers
Geocentrism
Managers’ outlook is one of creating a global network among various elements of the global organization
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Types of Staffing Policy
Ethnocentric
Key management positions filled by parent-country nationals
Polycentric
Host country nationals manage subsidiaries; parent company nationals hold key headquarter positions
Geocentric
Seek best people regardless of nationality
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IHRM Strategy
IHRM Strategy Formulation
Central trade-off pits pressures for centralization集权 against the need for decentralization下放
Centralization is very similar to the notion of integration 集成/综合
Decentralization is similar to the notion of local responsiveness 响应能力
Convergence 合流
Use of parent-company policies and procedures throughout a firm’s global operations
Divergence分歧
Cultural and institutional differences play a role in the matter
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IHRM Strategies and MNE Business Strategies
The overall effectiveness of an IHRM strategy is contingent on the context in which it is used
An IHRM strategy’s effect on organizational effectiveness is always dependent on how well the IHRM strategy fits with, and supports, a MNE’s business strategy
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IHRM Strategies and MNE Business Strategies (cont.)
Receptive Each subsidiary is tightly connected with headquarters with very little freedom to adapt to the local conditions. | Active A MNE with this type of IHRM strategy is more likely have a transition HR function with considerably more control over HR decision making than autonomous IHRM strategy but less than in a receptive IHRM strategy. |
Autonomous Each subsidiary has the freedom to develop and implement its own IHRM policies and practices that support local rules and conditions |
Integration
Local Responsiveness
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Research on SIHRM
Existing Research on SIHRM
Local culture and national managerial orientation influence the nature of HR practice
The degree of global mindset influences the nature of an MNE’s global strategy
Global strategy influences the degree of global focus in the HR strategy
Appropriate global HR practices are associated with better organizational performance
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Models/Frameworks for Understanding SIHRM
In an effort to understand the role of IHRM in MNEs, scholars and researchers have suggested several SIHRM models or frameworks.
The model has five parts:
Strategic MNE components
Exogenous factors
Endogenous factors
IHRM issues, functions, and policies and practices
MNE concerns and goals
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__MACOSX/._IHRM Ch02 (student).pptx
IHRM Ch05 (student).pptx
Chapter 5
International Human Resources Management and Culture
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1
Learning Objectives
Define and explain the concept of culture
Explain the importance of culture in IB
Describe the basic research findings of G. Hofstede and F. Trompenaars
Explain the importance of culture to IHRM
Describe the importance of culture and the difficulties encountered in IHRM research
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The Nature and Importance of Culture: An Introduction
Every country has at least some variances from all others, e.g., history, government, and laws.
The more countries with which an MNE interacts, the more complex and difficult conducting business becomes
One central cause of difficulties has to do with the critical nature of the differences between the national cultures of these various countries
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A Definition and Description of Culture
Culture is the characteristic way of behaving and believing that a group of people have developed over time and share in common
A group’s culture:
Gives a sense of who they are, of belonging, of how they should behave
Provides the capacity to adapt to circumstances and to transmit this knowledge to succeeding generations
Affects every aspect of the management process
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Understanding culture as layers of meaning
Surface or explicit culture (the outside layer): things that can be readily observed, such as dress, food and ways of eating, architecture建筑, and customs习俗
Hidden culture (the middle layer): values, religions, and philosophies about things like child rearing, views of what is right and wrong
Invisible or implicit culture (the core): the culture’s universal truths, the bases for all of a culture’s values and beliefs
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The important in developing what is referred to as “cultural competency.”
See Figure 5.2
Understanding culture as layers of meaning
Increasing Transnational Competence
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Awareness
Respect
Reconciliation
Country and Regional Cultures
An increasing number of researchers are assessing whether or not the wide variety of cultures around the world can be reduced to a more limited set of cultures with similar characteristics
Research of Geert Hofstede
Fons Trompenaars and Charles Hampden-Turner
Global Leadership and Organizational Behavior Effectiveness (GLOBE): Cultural Dimensions
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The Research of Geert Hofstede
Cultural Dimensions
Power distance Individualism or collectivism
Individualism or Collectivism
Uncertainty avoidance or tolerance for ambiguity
Masculinity versus femininity
Long- term versus short-term orientation
Pragmatic versus normative orientation
Indulgence versus restraint
Research Findings
Countries consistently showed similarities and difference based on these characteristics
MNEs should not attempt to impose parent country managerial practices and organizational systems on their foreign subsidiaries
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The Research of Fons Trompenaars and Charles Hampden-Turner
Cultural Factors
Universalism versus particularism (emphasis on rules versus relationships)
Individualism versus communitarianism (the individual versus the
group)
Neutral versus emotional (range of emotions expressed)
Specific versus diffuse (range of involvement with other people)
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The Research of Fons Trompenaars and Charles Hampden-Turner (Cont)
Cultural Factors
Achievement versus Ascription. (Basis for according status to other people).
Sequential time versus synchronous time (how people manage time)
Internal direction versus outer direction (how people relate to their environment
Research Findings
Persons act and respond as their cultures have taught and influenced them to behave
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Global Leadership and Organizational Behavior Effectiveness (GLOBE): Cultural Dimensions
Since the reporting of these studies by Hofstede and Trompenaars and Charles Hampden-Turner, other researchers and consultants have reported similar findings or developed alternative ways to categorize cultural values.
The Global Leadership and Organizational Behavior Effectiveness (GLOBE) research project is an example.
See Exhibit 5.3
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Country Cultural Clusters
The results of several studies suggest groupings of the following countries, based on their cultural similarities:
Anglo: Australia, Canada, Ireland, New Zealand, South Africa, United Kingdom, United States
Arab: Abu-Dhabi, Bahrain, Kuwait, Oman, Saudi Arabia, United Arab Emirates
Far Eastern: Hong Kong, China, Indonesia, Malaysia, Philippines, Singapore, Vietnam, Taiwan, Thailand
Germanic: Austria, Germany, Switzerland
Latin American: Argentina, Chile, Colombia, Mexico, Peru, Venezuela
Latin European: Belgium, France, Italy, Portugal, Spain
Near Eastern: Greece, Iran, Turkey
Nordic: Denmark, Finland, Norway, Sweden
Independent: Brazil, India, Israel, Japan, South Korea
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The Observations of an Experienced practitioner
Gesteland observed that variances in four general patterns of cross-cultural business behavior provide critical help in understanding international marketing, negotiating, and managing
Deal focus versus relationship focus
Informal versus formal cultures
Rigid-time (monochromic) versus fluid-time (polychromic) cultures
Expressive versus reserved cultures
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Dangers of Oversimplification
Concern that the focus on country differences falls short on two levels:
It provides little explanation of within-group differences, i.e., it treats countries or cultures as homogeneous wholes, with everyone within the country or culture being alike
It provides little understanding of how cultures change, i.e., it tends to treat cultures as a given—impermeable and static
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Country Culture Versus MNE Culture
Countries develop unique patterns of
values
norms
beliefs
acceptable behavior
For many firms, these organizational values take precedence over country cultures, particularly when there is a conflict between the two
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Cultural and Globalization
Divergence
The strong influence exerted by countries’ cultural values and practices on a MNE’s business and HR practices
Convergence
Adoption of similar “best practices”
Cross-vergence
The intermixing of cultural systems between different countries
Glocalization
The optimal trade-off between globalization and localization
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Research in IHRM
Criticisms of IHRM Research
Lacks analytical rigor
Relies too heavily on description of organizational practices and not critically evaluating such practices
Suffers from expediency in research design and planning
Lacks the sustained effort needed to develop case material and other types of longitudinal studies
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Research in IHRM
Factors Limiting IHRM Research
Expense: multinational or cross-border or cross-cultural research is expensive
Time and travel: requires more time and travel than domestic research
Knowledge: requires skills in multiple languages and sensitivity to multiple cultures
Cooperation: requires more cooperation among numerous individuals from different countries, companies and, often, governments
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Research in IHRM
Problems Frustrating IHRM Researchers:
Inconsistent/vague definitions of terms such as culture
Inaccurate translation of key terminology
Difficulties in obtaining representative or equivalent samples of research subjects
Difficulties in isolating variables of interest in different cultures
Difficulty in isolating cultural differences—versus identifying cultural characteristics common across varying cultures—amid varying national economic and political realities
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Forms of IHRM Research
Cross-Cultural
Descriptive
IHRM Research
Multicultural
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Cross-Cultural Research
Universal
Convergent
Basic Forms of Cross-Cultural Research
Situational
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Specific Difficulties of IHR Research
Focus of Research
Emic: identifying culture-specific aspects
Etic: identifying culture-common aspects
Language Problems
Measurement/Methodological Problems
Equivalence Problems
Metric (stimulus) equivalence
Conceptual equivalence
Functional equivalence
Subjectivity of the research topic and concept
Factors other than culture
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Impact of Culture on IHRM
Situations in which particular cultural influences on IHRM are important include:
Recruiting and hiring practices
Building business relationships
The role and use of multiple languages and communication
Perceptions of organizational justice
Decision-making
Performance evaluations and feedback
Management and leadership development
Development of a global mindset
Varying perspectives on careers across cultures
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