Managing People in the Global Economy

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THE FOLLOWING SCENARIO SETS OUT A RANGE OF IHRM ISSUES THAT

WILL BE DISCUSSED IN FURTHER DETAILS DURING THE COURSE OF THE

SEMESTER.

IT IS NOT THEREFORE EXPECTED THAT YOU IMMEDIATELY KNOW ALL

THE COURSE MATERIAL THAT CAN BE RELATED TO THIS WORKSHOP.

RATHER THIS WORKSHOP IS DESIGNED TO HAVE YOU BEGIN TO

CONSIDER FACTORS THAT DIFFERENTIATE IHRM FROM DOMESTIC HRM

AND DEVELOP APPROPRIATE SOLUTIONS TO IHRM CHALLENGES

WORKSHOP 1

IHRM ROLE PLAY SCENARIO

Flying Wombat Travels Pty Ltd is an Australian-based firm that owns and operates more than

30 travel agencies across Australia. Given the extremely competitive nature of the travel

industry and the proliferation of internet-based cut price ticketing firms, the firm does not

attempt to offer the cheapest prices in the market. Rather its success has been built on its

specialisation and knowledge of local Australian-based holiday and cultural experiences. This

knowledge is supported by high levels of service and the ability to tailor holidays to specific

individual or group requirements. Over the years the firm has built a strong brand name and

loyal following from both local and overseas visitors touring Australia under its well-known

advertising logo, “Catch the Flying Wombat!”

Senior management at Flying Wombat Travels have recently decided to open the firm’s first

overseas-based travel agency in Shanghai, China. They are hoping that this strategy will allow

the firm to gain a greater share of the rapidly growing Chinese international tourist market.

Please note that the Shanghai subsidiary will still specialise in offering Australian-based

holidays. However, management believe that a Chinese-based subsidiary will offer more

personalised service and help to better establish the firm in the Chinese market. A lot depends

on the success of this project, as senior management aim to roll out further travel agencies

across China and other countries in the Asia-Pacific, if this initial venture is a success.

Sarah Johnson heads the firms HRM section. Her appointment to this position was based on

her extensive HRM experience, however, all her HR experience has been gained within

Australia. Sarah has also worked for the firm’s Sydney-based head office for many years and

therefore has detailed knowledge of company policies. However Sarah has not previously

operated in an IHRM environment and her overseas experiences have been limited to 2

relatively short overseas vacations to Europe.

Sarah was advised of the above proposed Chinese-based travel agency strategy at a recent

senior management meeting and was asked to put together a report outlining IHRM

requirements and issues associated with this venture.

Sarah initially felt confident about this task, believing that much of her existing knowledge of

HR policy and practices could be easily transferred to the international context. However,

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Sarah quickly found herself unprepared for some of the issues that she faced? Therefore she

hired a specialist IHRM consultant firm to advise her on how to proceed.

The IHRM consultants were given the following initial information:

 The proposed staffing structure of the subsidiary as follows: o A senior manager who will be in charge of the Shanghai subsidiary; o Three middle level managers; o Five line managers; o Approximately 20 support and customer service staff.

 The firm understands that it will need to recruit some Chinese nationals but is unsure what the right ratio of expatriates to local staff should be? (including the

ratio of expatriate to local staff within and across the different job categories?)

 A number of the firm’s senior managers have expressed an interest in working in the proposed Chinese subsidiary. While many of these managers have extensive

experience and knowledge in the industry:

o none of them speak Chinese. o They all have spouses and children.

 A number of the firm’s younger customer service staff and line managers have also expressed an interest in working in the proposed Chinese subsidiary.

o Some of these workers have varying levels of fluency in Mandarin Chinese (the official Chinese language).

o Many of the younger workers do not have spouses or children.

PRACTICAL EXERCISES

As part of the above IHRM consultant team your group needs to consider and discuss the

following.

Activity 1.

1. Based on the above information what do you think are the key IHRM issues in this case?

Activity 2

1. Do you think the senior manager in charge of the proposed subsidiary should be an Australian expatriate or a local Chinese national? You will need to consider:

o What you think will be the main responsibilities for the job? o What skills you think the position will require? o The pros and cons of appointing an expatriate versus a local Chinese manager? o You may also wish to consider whether there may be any other ‘better’

approaches to staffing this position? (i.e. than either of the above options)

2. What do you think the right ratio of expatriates to local Chinese nationals should be for the remaining job categories? (e.g. how should the different job categories be assigned?)

Why?

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Activity 3

Identify the challenges that Australian expatriates and their families may face when

transferred to Shanghai, China?

Identify the benefits/advantages that Australian expatriates and their families may have when

transferred to Shanghai, China?

Questions your group may wish to consider include:

 How much do you know about this city/country? o ask your fellow group members!

 Where can you find information on this city/country? o you may use your laptop, tablets, smart phones etc. to look up more information if

you wish?

 What do you think life would be like in this city/country?

 What difficulties, if any, do you anticipate that you will have to deal with in this city/country.

 How might your family feel about adjusting to living in this city/country? o n.b. assume you are married with a spouse and two school age children.

 What do you believe it takes to adjust to the culture in this city/country?

 What do you expect to be the personal benefits of working in this city/country?

 What do you expect to be the cost of living in this city/country?

 List three adjectives to describe the people of this country?

 If you were offered an expatriate position in this city/country would you accept it? Why? Why not?