Cross cultural management 3e by cullen ch10

Learning Objectives• Know the basic functions of human resource management • Define international human resource management • Understand the difference between international and domestic

Chapter 10

International Human Resource

Management

Learning Objectives

• Know the basic functions of human resource

management

• Define international human resource management

• Understand the difference between international and

domestic human resource management

• Know the types of workers used by multinationals

• Know the basic functions of human resource

management

• Define international human resource management

• Understand the difference between international and

domestic human resource management

• Know the types of workers used by multinationals

Learning Objectives

• Know how and when to use expatriate managers

• Know the skills necessary for a successful expatriate assignment

• Understand how expatriate managers are

compensated and evaluated

• Appreciate the issues regarding expatriate

assignments of women managers

• Know how and when to use expatriate managers

• Know the skills necessary for a successful expatriate

assignment

• Understand how expatriate managers are

compensated and evaluated

• Appreciate the issues regarding expatriate

assignments of women managers

Learning Objectives

• Know what to do to make the expatriate assignment

easier for their female expatriates

• Understand e.HR systems and how they can be useful

in IHRM

• Understand the relationship between choice of a

multinational strategy and international human

resource management

• Know what to do to make the expatriate assignment

easier for their female expatriates

• Understand e.HR systems and how they can be useful

in IHRM

• Understand the relationship between choice of a

multinational strategy and international human

resource management

Human Resource Management and Functions

• HRM: deals with the entire relationship of the

employee with the organization

• Recruitment: process of identifying and attracting

qualified people to apply for vacant positions

• Selection: process of filling vacant positions in the

organization

• HRM: deals with the entire relationship of the

employee with the organization

• Recruitment: process of identifying and attracting

qualified people to apply for vacant positions

• Selection: process of filling vacant positions in the

organization

Basic HRM Functions

• Training and development: giving employees the

knowledge, skills, and abilities to perform successfully

• Performance appraisal: system to measure and assess employees’ work performance

• Training and development: giving employees the

knowledge, skills, and abilities to perform successfully

• Performance appraisal: system to measure and assess employees’ work performance

Basic HRM Functions

• Compensation: organization’s entire reward package, including financial rewards, benefits, and job security

• Labor relations: ongoing relationship between an

employer and those employees represented by labor organizations

• Compensation: organization’s entire reward package, including financial rewards, benefits, and job security

• Labor relations: ongoing relationship between an

employer and those employees represented by labor

organizations

International Human Resource Management

• All HRM functions, adapted to the international setting

• Two added complexities compared to domestic HRM

• Must choose a mixture of international employees

• Must decide the extent of adaptation to local

conditions

• All HRM functions, adapted to the international setting

• Two added complexities compared to domestic HRM

• Must choose a mixture of international employees

• Must decide the extent of adaptation to local

conditions

Types of Employees in Multinational Organizations

• Expatriate: employee from a different country

• Home country nationals: expatriate employees from

the parent firm’s home country

• Third country nationals: expatriate workers who come from neither the host nor home country

• Expatriate: employee from a different country

• Home country nationals: expatriate employees from

the parent firm’s home country

• Third country nationals: expatriate workers who come from neither the host nor home country

Types of Employees in Multinational Organizations

• Host country nationals: local workers who come from the host country where the unit is located

• Inpatriate: employees from foreign countries who work

in the country where the parent company is located

• Host country nationals: local workers who come from

the host country where the unit is located

• Inpatriate: employees from foreign countries who work

in the country where the parent company is located

Key Questions Regarding Local Employees

• How can we identify talented local employees?

• How can we attract these employees to apply for jobs?

• Can we use our home country’s training methods with local employees?

• What types of appraisal methods are customary?

• How can we identify talented local employees?

• How can we attract these employees to apply for jobs?

• Can we use our home country’s training methods with local employees?

• What types of appraisal methods are customary?

Key Questions Regarding Local Employees (cont.)

• What types of rewards do local people value?

• How can we retain and develop employees with a high potential as future managers?

• Do any local laws affect staffing, compensation, and

training decisions?

• What types of rewards do local people value?

• How can we retain and develop employees with a high potential as future managers?

• Do any local laws affect staffing, compensation, and

training decisions?

The Expatriate or the Host Country Manager

• Multinationals must decide whether to use expatriates

or home country nationals

• Need to look at some questions

• Given the firm’s strategy, what is the preference for the position?

• Multinationals must decide whether to use expatriates

or home country nationals

• Need to look at some questions

• Given the firm’s strategy, what is the preference for the position?

The Expatriate or the Host Country Manager

• Using expatriate managers

• Do parent country managers have the appropriate

skills?

• Are they willing to take expatriate assignments?

• Do any laws affect the assignment of expatriate

managers?

• Using host country managers

• Do they have the expertise for the position?

• Can we recruit them from outside the company?

• Using expatriate managers

• Do parent country managers have the appropriate

skills?

• Are they willing to take expatriate assignments?

• Do any laws affect the assignment of expatriate

managers?

• Using host country managers

• Do they have the expertise for the position?

• Can we recruit them from outside the company?

Is the Expatriate Worth It?

• Decisions must take into account costs of such

assignments

• High cost

• High failure rate

• Decisions must take into account costs of such

assignments

• High cost

• High failure rate

Exhibit 10.1: Paying for the

Expatriate Manager: Indices of

Cost of Living Abroad

Reasons for U.S Expatriate Failure

• Individual

• Personality of the manager

• Lack of technical proficiency

• No motivation for assignment

• Family

• Spouse or family members fail to adapt

• Family members or spouse do not want to be there

• Individual

• Personality of the manager

• Lack of technical proficiency

• No motivation for assignment

• Family

• Spouse or family members fail to adapt

• Family members or spouse do not want to be there

Reasons for U.S Expatriate Failure (cont.)

• Cultural

• Manager fails to adapt

• Manager fails to develop relationship with key

people

• Organizational

• Excessively difficult responsibilities

• Company fails to pick the right person

• Company fails to provide the technical support

• Cultural

• Manager fails to adapt

• Manager fails to develop relationship with key

people

• Organizational

• Excessively difficult responsibilities

• Company fails to pick the right person

• Company fails to provide the technical support

Strategic Role of Expatriate Assignments

• Helps managers acquire international skills

• Helps coordinate and control operations dispersed

activities

• Communication of local needs/strategic information to headquarters

• In-depth knowledge of local markets

• Helps managers acquire international skills

• Helps coordinate and control operations dispersed

International Cadre: Another Choice

• Separate group of expatriate managers who specialize

in a career of international assignments

• Have permanent international assignments

• Move from international assignments to international assignments

• Recruited from any country

• Sent to worldwide locations to develop

cross-cultural skills

• Separate group of expatriate managers who specialize

in a career of international assignments

• Have permanent international assignments

• Move from international assignments to international assignments

• Recruited from any country

• Sent to worldwide locations to develop

cross-cultural skills

Key Success Factors for Expatriate Assignments

• Technical and managerial skills

Exhibit 10.2: Expatriate

Success Factors and

Selection Methods

Priority of Success Factors

• Assignment length

• Technical and professionals skills are key for short assignments

• Cultural similarity

• Required interaction with local people

• Job complexity and responsibility

• Assignment length

• Technical and professionals skills are key for short

assignments

• Cultural similarity

• Required interaction with local people

• Job complexity and responsibility

Exhibit 10.3: Selecting

Expatriates: Priorities for Success

Factors by Assignment

Characteristics

Training and Development

• Cross-cultural training: increases the relational abilities

of future expatriates and their spouses and families

• Training rigor: extent of effort by both trainees and

trainers required to prepare the trainees for expatriate positions

• Cross-cultural training: increases the relational abilities

of future expatriates and their spouses and families

• Training rigor: extent of effort by both trainees and

trainers required to prepare the trainees for expatriate positions

Training and Development (cont.)

• Low rigor training

• Short time period

• Lectures and videos on local cultures

• Briefings on company operations

• High rigor training

• Last over a month

• Experiential learning

• Extensive language training

• Includes interactions with host country nationals

• Low rigor training

• Short time period

• Lectures and videos on local cultures

• Briefings on company operations

• High rigor training

• Last over a month

• Experiential learning

• Extensive language training

• Includes interactions with host country nationals

Exhibit 10.4: Training Rigor:

Techniques and Objectives

Expatriate Performance Appraisal: Challenges

• Fit of international operation in multinational strategy

• Unreliable date

• Complex and volatile environments

• Time difference and distance separation

• Local cultural situation

• Fit of international operation in multinational strategy

• Unreliable date

• Complex and volatile environments

• Time difference and distance separation

• Local cultural situation

Steps to Improve the Expatriate Performance Appraisal

• Fit the evaluation criteria to strategy

• Fine-tune the evaluation criteria

• Use multiple sources of evaluation with varying periods

of evaluation

• Fit the evaluation criteria to strategy

• Fine-tune the evaluation criteria

• Use multiple sources of evaluation with varying periods

of evaluation

Exhibit 10.6: Evaluation Sources,

Criteria, and Time Periods for

Expatriate Performance Appraisals

The Expatriate Manager:

Compensation

• The balance-sheet approach

• Provides a compensation package that equates

purchasing power

• Allowances for cost of living, housing, food,

recreation, personal care, clothing, education, home furnishing, transportation, and medical care

• The balance-sheet approach

• Provides a compensation package that equates

purchasing power

• Allowances for cost of living, housing, food,

recreation, personal care, clothing, education, home furnishing, transportation, and medical care

Exhibit 10.7: Balance Sheet

Approach To Expatriate

Compensation

Additional Allowances and Perquisites

• Foreign service premiums

Expatriate Manager Compensation: Other Approaches

• Headquarters-based compensation: paying home

country wages regardless of location

• Host-based compensation system: adjusting wages to local lifestyles and costs of living

• Global pay systems: worldwide job evaluations,

performance appraisal methods, and salary scales are used

• Headquarters-based compensation: paying home

country wages regardless of location

• Host-based compensation system: adjusting wages to local lifestyles and costs of living

• Global pay systems: worldwide job evaluations,

performance appraisal methods, and salary scales are used

Repatriation Problem

• Difficulties faced coming back home

• Three basic cultural problems—“reverse culture

shocks”

• Adapt to new work environment and culture of home

• Expatriates must relearn own national and

organization culture

• Need to adapt to basic living environment

• Difficulties faced coming back home

• Three basic cultural problems—“reverse culture

shocks”

• Adapt to new work environment and culture of home

• Expatriates must relearn own national and

organization culture

• Need to adapt to basic living environment

Strategies for Successful Repatriation

• Provide a strategic purpose for the repatriation

• Establish a team to aid the expatriate

• Provide parent country information sources

• Provide training and preparation for the return

• Provide a home-leave policy to encourage expatriates

to make regular visits to the home office

• Provide support for the expatriate and family on return

• Provide a strategic purpose for the repatriation

• Establish a team to aid the expatriate

• Provide parent country information sources

• Provide training and preparation for the return

• Provide a home-leave policy to encourage expatriates

to make regular visits to the home office

• Provide support for the expatriate and family on return

International Assignments for Women: Two Myths

• Myth 1: Women do not wish to take international

assignments

• Myth 2: Women will fail in international assignments

because of the foreign culture’s prejudices against

local women

• Successful women expatriates

• Foreign not female—emphasize nationality not

• Myth 1: Women do not wish to take international

assignments

• Myth 2: Women will fail in international assignments

because of the foreign culture’s prejudices against

local women

• Successful women expatriates

• Foreign not female—emphasize nationality not

gender

International Assignments for Women: Advantages

• More visible

• Strong in relational skills

• Wider range of interaction options

• More visible

• Strong in relational skills

• Wider range of interaction options

International Assignments for Women: Disadvantages

• Face the glass ceiling

• Isolation and loneliness

• Constant proving of themselves, working harder

than male

• Need to balance work and family responsibilities

• Need to worry about accompanying spouse

• Face the glass ceiling

• Isolation and loneliness

• Constant proving of themselves, working harder

than male

• Need to balance work and family responsibilities

• Need to worry about accompanying spouse