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  • 1. CHAPTER 11INTERNATIONAL HUMAN RESOURCE MANAGEMENT
  • 2. COMPONENTS OF HRM• Recruitment• Selection• Training & Development• Performance Appraisal• Compensation• Labor Relations
  • 3. INTERNATIONAL HRM (IHRM)• Basic HRM issues remain• Must choose a mixture of international employees• How much to adapt to local conditions?
  • 4. EMPLOYEES IN MULTINATIONAL ORGANIZATIONS• Host country nationals• Expatriates• Home country nationals• Third country nationals• Inpatriates
  • 5. MULTINATIONAL MANAGERS• Host country or expatriate?
  • 6. USING HOST COUNTRY MANAGERS• Do they have the expertise for the position?• Can we recruit them from outside the company?
  • 7. 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?
  • 8. •IS THE EXPATRIATE WORTH IT?• High cost• High failure rate
  • 9. •EXHIBIT 11.1 PAYING FOR THE EXPATRIATE MANAGER 400000 350000 300000 250000$ 200000 150000 100000 50000 0 Hong Kong Taipei Salary Tokyo Home London Singapore
  • 10. •REASONS FOR U.S. EXPATRIATE FAILURE• Spouse fails to adapt• Manager fails to adapt• Other problems within the family• Personality of the manager• Level of responsibilities
  • 11. •Reasons for expatriate failure, continued• Lack of technical proficiency• No motivation for assignment
  • 12. •MOTIVATIONS TO USE EXPATS• Managers acquire international skills• Coordinate and control operations dispersed activities• Communication of local needs/strategic information to headquarters
  • 13. •KEY EXPATRIATE SUCCESS FACTORS• Professional/technical competence• Relational abilities• Motivation• Family situation• Language skills• Willingness to accept position
  • 14. •PRIORITY OF SUCCESS FACTORS• Depends on : • assignment length • cultural distance • amount of required interaction with local people • job complexity/responsibility
  • 15. •EXHIBIT 11.3 SHOWS ADECISION MATRIX USEDTO SET PRIORITIES ORDIFFERENT SUCCESSFACTORS DURINGSELECTION
  • 16. Assignment Characteristics GreaterExpatriate Longer More Interaction MoreSuccess Duration Cultural and Complex orFactors Dis- Communica- Respon- similarity tion sible Job Requirements with LocalsProfessional/ High Neutral Moderate HighTechnicalSkillsRelational Moderate High High Moderate AbilitiesInternational High High High HighMotivationFamily High High Neutral ModerateSituationLanguage Moderate High High NeutralSkills
  • 17. •EXPATRIATE TRAINING
  • 18. •TRAINING RIGOR• The extent of effort by trainees and trainers required to prepare the trainees for expatriate positions
  • 19. •LOW RIGOR TRAINING• Short time period• Lectures• Videos on local culture• Briefings on company operations company operations
  • 20. •HIGH RIGOR TRAINING• Lasts over a month• Experiential learning• Extensive language training• Often includes interactions with host country nationals
  • 21. •EXHIBIT 11.4 SHOWSVARIOUS TRAININGTECHNIQUES AND THEIROBJECTIVES AS THE RIGOROF THE CROSS- CULTURALTRAINING GROWS
  • 22. Techniques: Field trips to host country, meetings High with managers experiencedTraining in host country, meetings Rigor with host country nationals, intensive language training. Objectives: Develop comfort with host country national culture, business culture, and social institutions.
  • 23. Techniques: Experiential learning exercises, role playing, Mid- simulations, case level studies, survivalTraining language training. Rigor Objectives: General and specific knowledge of host country culture, reduce ethnocentrism.
  • 24. Techniques: Lectures, videotapes, reading background material. Objectives: Provide Low background information onTraining host country business and Rigor national cultures, basic information on company operations.
  • 25. •CHALLENGES OF EXPATRIATE PERFORMANCE APPRAISAL• Unreliable data• Complex and volatile environments• Time differences and distance separation• Local cultural situations
  • 26. •STEPS TO IMPROVE THE PROCESS• 1. Fit the evaluation criteria to strategy.• 2. Fine tune the evaluation criteria• 3. Use multiple evaluators with varying periods of evaluation
  • 27. •EXHIBIT 11.6 Shows severalsources of information asuperior or the HRMprofessionals may use toevaluate an expatriatemanagers
  • 28. Evaluation Sources Criteria PeriodsSelf evaluation Meeting objectives Six months and at the Management skills completion of a major Project successes projectSubordinates Leadership skills After completion of Communication skills major project Subordinate developmentPeer expatriate and Team building Six monthshost country manages Interpersonal skills Cross-cultural interaction skillsOn-site supervisor Management skills At the completion of Leadership skills significant projects Meeting objectivesCustomers and clients Service quality and Yearly timeliness Negotiation skills Cross-cultural interaction skills
  • 29. •EXPATRIATECOMPENSATION
  • 30. •THE BALANCE SHEET APPROACH• Provides a compensation package that equates purchasing power
  • 31. •BALANCE SHEET COSTS• Allowances for cost of living, housing, utilities, furnishing, educational expenses, medical expenses, club memberships, and car and/or driver expenses
  • 32. DomesticAssignment Expatriate Assignment Expenses andExpenses and Balanced Spendable Income + AllowancesSpendableIncomeBase Salary = Base Salary Allowances as an incentive to take position, + foreign service premium, hardship pay, R&RTaxes = Taxes + Allowances to balance extra tax paymentsGoods and = Goods and ServicesServices Allowances to cover cost of living differences, + housing, children’s education, medical costs, automobile, recreation, home leave travelHousing = Housing Allowances for moving expenses, settling in + expenses, initial housing costs, and furnishing allowancesSpendable = Spendable IncomeIncome
  • 33. •OTHER APPROACHES• Parent country wages everywhere• Wean expatriates from allowances• Pay based on local or regional markets• Cafeteria selection of allowances• Global pay systems
  • 34. •THE REPATRIATION PROBLEM• Difficult for many organizations• "Reverse culture shock"• Expatriates must relearn own national and organizational culture• Includes whole family
  • 35. •STRATEGIES FOR SUCCESSFUL REPATRIATION PROVIDE:• A strategic purpose for repatriation• A team to aid the expatriate• Home country information sources• Training and preparation for the return• Support for expatriate and family
  • 36. •WOMEN EXPATRIATES: TWO IMPORTANT "MYTHS"• Myth 1: women do not wish to take international assignments• Myth 2: women will fail in international assignments because of the foreign cultures prejudices against local women
  • 37. •SUCCESSFUL WOMEN EXPATRIATES• Foreign not female • emphasize nationality not gender• The womans advantage • strong in relational skills • wider range of interaction options
  • 38. •MULTINATIONALSTRATEGY AND IHRM
  • 39. •IHRM ORIENTATIONS• Ethnocentric• Polycentric• Regiocentric• Global
  • 40. •IHRM ORIENTATION AND MULTINATIONAL STRATEGY• Early stages of internationalization = ethnocentric IHRM• Multilocal strategies = ethnocentric or regiocentric• Regional strategy = closer to the global
  • 41. • International strategy = ethnocentric or polycentric IHRM• Transnational strategies = a global IHRM
  • 42. •CONCLUSIONS• HRM functions• IHRM challenges• Expatriate managers• The role of women in multinational organizations• Multinational strategies and IHRM orientations

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