2. 1. Bic pens are
1. French, Bic;
2. Godiva chocolate is
2. American, Campbell Soup;
3. Algida’s owner is
3. Anglo-Dutch, Unilever
4. Haagen-Dazs ice cream is made
by a(n) company
4. British, Grand Metropolitan;
5. Firestone (Bridgestone) tires
are
6. RCA televisions are made by
a(n) company
5. Japanese, Bridgestone Corp;
7. Atari Video games are
7. American, Atari Corp;
8. Jaguar cars made by a(n)
company
9. Holiday Inns are owned by
8. American, Ford Motor Co.;
10. The parent company of Braun
household products is
10. American, Gillette Co.;
6. French, Thompson;
9. British, Bass;
3. Introduction to International Human
Resource Management
• How the world is changing,
• Importance of globalization,
• IHRM as a key factor in the success of
international business.
• An overview of domestic HRM and discussion
on what is different in IHRM.
4. Questions to consider
• What are the key elements of “best practice”
in HRM?
• Can the best practices be applied on a global
level?
• To what extent are the principles of managing
people universal and to what extent culture
specific?
5. • Inter-cultural or International? What is the
difference? (Our focus will be international)
6. Motivations and Perspectives Shaped by Administrative Heritage
Inter War Period
- National market differences
- Transport/communication barriers
- Rising protectionism
* Internationalize through rationally differentiated and responsive strategies
- European MNC expansion
Immediate Post-War period
- Post-war reconstruction
- Transfer of new technologies
- Leverage management skills
* Internationalize through transfer of technological and managerial innovations
- American MNC expansion
Mid 1960s to late 1970s
- Falling trade barrier
- Homeogeniziing markets
- Improved transport, communications
* Internationalize by capturing global scale advantages and global competitive games
Irwin/McGraw-Hill
- Japanese MNC expansion
7. STRATEGIC PERSPECTIVES IN MNCs
AN EVOLVING MANAGEMENT MENTALITY
• “ INTERNATIONAL” PERSPECTIVE
-
OPPORTUNISTIC APPROACH TO FDI
•
DOMESTIC COMPANIES WITH FOREIGN APPENDAGES
PORTFOLIO APPROACH TO MANAGEMENT OF FOREIGN OPERATIONS
“ MULTI-NATIONAL” PERSPECTIVE
-
•
INCREASED REALIZATION OF IMPORTANCE OF INTERNATIONAL MARKETS
MANAGE OVERSEAS OPERATIONS AS A FEDERATION OF INDEPENDENT COMPANIES
“ GLOBAL” PERSPECTIVE
- GROWING CONCERN ABOUT INTERNATIONAL COMPETITION AND INEFFICIENCIES
OF MULTI-NATIONAL RESPONSE
- DRIVE FOR COST COMPETITIVENESS THROUGH PRODUCT STANDARDIZATION AND
ORGANIZATIONAL CENTRALIZATION
-
•
MANAGE WORLWIDE OPERATIONS AS SINGLE ENTITY
“ TRANS-NATIONAL” PERSPECTIVE
- NEED TO RESPOND TO HOST COUNTRY PRESSURES AND GLOBAL COMPETITIVE
DEMAND SIMULTANEOUSLY
Irwin/McGraw-Hill
- MANAGEMENT CHALLENGE TO COORDINATE RESPONSIVE NATIONAL UNIT IN A
8. Strategies of international, multinational,
global & transnational organizations
• International company – transports its business
outside home country; each of its operations is a
replication of the company's domestic experience;
structured geographically; and involves subsidiary
general managers
• Companies offering multiple products often find it
challenging to remain organized e.g. need to have a
common information systems for accounting,
financial and management controls, and marketing.
Most evolve to become multinational companies
Copyright 2003-2006, Chris Chan
8
9. Strategies of international, multinational,
global & transnational organizations
• Multinational company – grows and defines its
business on a worldwide basis, but continues to
allocate its resources among national or regional
areas to maximize the total.
Copyright 2003-2006, Chris Chan
9
10. Strategies of international, multinational,
global & transnational organizations
• Global organizations – treat the entire world
as though it were one large country; may be
the entire company or one or more of its
product lines; may operate with a mixture of
two or more organizational structure
simultaneously.
Copyright 2003-2006, Chris Chan
10
11. Strategies of international, multinational,
global & transnational organizations
• Transnational organization - Use specialized
facilities to permit local responsiveness; more
complex coordination mechanism to provide
global integration
Copyright 2003-2006, Chris Chan
11
12. Global efficiency and local responsiveness of
different types of firms
High
Global
efficiency
Low
Global
Transnational
International
Multinational
Local responsiveness
Copyright 2003-2006, Chris Chan
High
12
13. Evolving Motivations: Changing Perspectives
High
TransNational
Global
Global
Coordination
Integration
MultiNational
International
Low
Low
Irwin/McGraw-Hill
National differentiation,
Responsiveness
High
14. MNC’s STRATEGIC AND ORGANIZATIONAL TASK: DEVELOPING
MULTIPLE CAPABILITIES
NEED FOR GLOBAL
COORDINATION,
INTEGRATION
TOYOTA
- DRIVEN BY SCALE
AND
TECHNOLOGY
- REINFORCED BY
GLOBAL
COMPETITION
G.M
- DRIVEN BY SCOPE
AND MARKETS
Irwin/McGraw-Hill
- REINFORCED BY
GOVERNMENTS
FIAT
NEED FOR NATIONAL
DIFFERENTIATION,
RESPONSIVENESS
15. Key Trends
• 63,000 transnational companies account for
more than half (2/3) of world trade.
• The top 100 companies account for 14% of
worldwide sales, 12% of assets, and 13% of
employment.
• Physical location of value creation is very
difficult to determine.
• Much of the force of globalisation comes
through mergers and acquisitions.
16. Impact of globalisation on the nature
of work
• Outsourcing to low labor countries
– First manufacturing, then processing services, now
white collar work.
17. Questions for HR professionals
• Do we have a strategy for becoming an international firm?
• What type of managers will we need to be successful?
• How can I find out about the way that HRM is conducted in
other countries (laws, trade unions, labor market).
• What will be the impact of cultural norms on our HR
policies.
• How will we choose whether to send expatriates or use
local employees.
• How do we move people to different locations
• How do we manage transfer of knowledge across borders
18. Parent-country Nationals
Advantages
Control and co-ordination by
HQ is maintained.
Promising managers get
international experience.
PCNs may be the best
people for the job.
Assurance that the
subsidiary will comply with
company objectives policies
etc.
Disadvantages
HCNs promotion
opportunities are limited.
Adaptation to host country
may take a long time.
PCNs may impose an
inappropriate HQ style.
Compensation differences
between PCNs and HCNs
may cause problems.
19. Host-country Nationals
Advantages
• No problems with
language and culture.
• Reduced hiring costs.
• No work permits required.
• Continuity of management
improves since HCNs stay
longer in positions.
• Govt. policy may force
hiring of HCNs.
• Promotional opportunities
not limited - so higher
morale among HCNs.
Disadvantages
• HQ may have less control
over operations.
• HCNs may still have
limited career
opportunities outside the
subsidiary.
• Hiring HCNs limits
opportunities for PCNs to
gain overseas experience.
• Hiring HCNs may
encourage a federation of
disintegrated national
units rather than one
integrated global unit.
20. Third-country Nationals
Disadvantages
• Transfers must
Advantages
consider national
• Salary and
animosities.
compensation may be • Host government may
lower than for PCNs.
resent TCNs as much
as PCNs.
• May be more familiar
with host country than • TCNs may not comply
with HQ style of
the PCNs.
management.
• TCNs may not want to
return after
assignment.
21. International Recruitment and
Selection
• A selection program for international assignments
involves assessing prospective candidates on certain
criteria thought to be associated with assignment
effectiveness.
• In order to have a successful selection program there
needs to be a broad range of prospective candidates
from which to choose criteria of effectiveness and
valid procedures for assessing candidates on them.
23. International Training and
Development
• Empirical literature give guarded support to the proposition
that cross cultural training has a positive impact on cross
cultural effectiveness.
• Cultural awareness training is not just for the employee
going overseas. It has numerous applications domestically
that will increase organizational effectiveness. Findings
indicate that it should be a regular part of personnel training
especially management development. The realities of a
more pluralistic society and international business make this
a necessity.
24. International Training and
Development
Area studies programs
Culture assimilator programs
Language training programs
Sensitivity training programs
Field experience programs
25. International Compensation
• If compensation is high then problems may
be encountered on return to head office.
• If compensation is not adequate then there
may be no incentive to go for the
international assignment given the
hardships that are usually involved in doing
so.
27. Repatriation
• Virtually all repatriated personnel experienced
some personal difficulty in reintegrating on
return home. The main complaints were loss
of status loss of autonomy lack of recognition
of the value of the experience and lack of
career direction.
28. Repatriation: Reverse Cultureshock
•
•
•
•
JOB RELATED FACTORS
“Out of sight out of mind”
International experience
devalued
Loss of status and pay relatively
peaking
Changes in the HQ
•
•
•
SOCIAL FACTORS
Expat assignment - different
type of social interaction (going
from a very close expat
community to where everyone is
very busy with their own lives)
Problems of spouse returning to
the workforce
Lack of peer support for
teenagers
Editor's Notes
The local managers are aware that their career prospects are limited therefore they are only concerned with the security and stability of only the local operation disregarding the broader goals of the global firm.
When the expatriate receives many rewards to convince them to go abroad the local employees feel discriminated against.
