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1 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
INTRODUCTION
Chapter 1
2 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
Click on an item to
go to its section.
Click on the book
cover below to
return to this table
of contents.
START
Chapter 1
 Vocabulary
 Objectives
 Scope of book
 Defining IHRM
 Domestic vs. international
 Variables that moderate the differences
 The cultural environment
 Industry type
 Extent of MNE reliance on HC market
 Senior mgmt. attitudes to international ops.
 Applying a strategic view of IHRM
 The changing context
INTRODUCTION
3 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
 HRM, IHRM
 PCN, HCN, TCN
 MNE
 expatriate = international assignee, inpatriate
 repatriation
 equity issues
 psychological contract
 culture shock
 convergence/divergence hypotheses
 Porter’s value chain model
 index of transnationality
 global mindset
 asymmetric events
 environmental dynamics
 organizational culture
Vocabulary
4 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
1. Define IHRM and key terms
2. Introduce & review expatriate assignment mgmt.
3. Outline differences between domestic & IHRM
4. Detail a model that captures these differences
5. Discover complexity & increasing challenges to
existing IHRM practices and models
Objectives
5 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
Scope of book
6 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
Inter-relationships between approaches to the field
Figure 1.1
7 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
Defining international HRM
8 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
1. Human resource planning
2. Staffing: recruitment, selection, placement
3. Performance management
4. Training & development
5. Compensation & benefits
6. Industrial relations
HRM activities
9 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
Morgan’s “3-D” definition of IHRM
1. The HR activities of
procurement, allocation & utilization
2. The countries where IHRM occurs:
» Host-country where subsidiary may be located
» Parent-country where firm is headquartered
» Other-countries that may be
source of labor, finance & other inputs
3. The employees of an international firm:
» HCNs (host country nationals)
» PCNs (parent .. .. )
» TCNs (host .. .. )
10 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
International assignments create expatriates
Figure 1.2
11 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
Stahl-Björkman-Morris def. of IHRM
The field of IHRM covers
 All issues related to firm outcomes
 A wide range of HR issues facing MNEs in
different parts of their organizations
This definition includes comparative analyses
of HRM in different countries.
12 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
Domestic vs. international
13 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
IHRM has …
1. more HR activities
2. a need for a broader perspective
3. more involvement in employees’ personal lives
4. changes of emphasis as
the mix of expatriates & locals varies
5. more risk exposure
6. broader external influences
IHRM is more complex than
domestic HRM
14 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
■ International taxation
■ International relocation & orientation
■ Administrative services for expatriates
■ Host-government relations
■ Language translation services
IHRM has international HR activities
15 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
■ Arranging for pre-departure training
■ Providing immigration & travel details
■ Providing housing, shopping, medical care,
recreation & schooling information
■ Finalizing compensation details such as:
 Delivery of salary overseas
 Determination of overseas allowances
 Taxation treatment
International relocation involves:
16 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
Variables that moderate the differences
17 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
1. The cultural environment
2. The industry(ies) with which the MNE is
primarily involved
3. The extent to which the MNE relies on
its HC domestic market
4. The attitudes of senior management
Four more moderators
in addition to IHRM complexity
18 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
A model of all 5 variables that moderate the differences
between domestic and international HRM
Figure 1.3
19 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
The cultural environment
20 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
■ Culture shock
■ Emic ≠ etic
■ Convergence hypothesis research
tends to focus on macro level
■ Divergence hypothesis research
tends to focus on micro level
■ The international HR manager must be
aware of cultural differences
Culture matters
21 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
Industry type
22 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
An MNE performs somewhere in this range:
Multidomestic Industries Global Industries
Examples
retailing, distribution, insurance
International strategy
Collapses to a
series of domestic strategies.
airlines, semiconductors, copiers
Must integrate activities on a
worldwide basis.
The MNE industry type continuum
23 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
1. Parent org. recognizes that its HRM reflects
some assumptions & values of own home culture.
2. Parent org. recognizes that its own peculiar ways are
neither universally better nor worse than others –
just different & likely to exhibit strengths & weaknesses,
particularly abroad.
3. Parent org. recognizes that its foreign subsidiaries may prefer
other ways to manage people – ways that are neither
intrinsically better nor worse, but possibly more effective locally.
4. Headquarters is willing to acknowledge cultural differences &
take steps to make them discussable & therefore usable.
5. All parties build belief that cross-cultural learning invites
more creative & effective ways of managing people.
Laurent’s steps for true IHRM:
24 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
Extent of MNE reliance on HC market
25 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
Chapter
2
The world’s top 10 non-financial TNC, ranked by TNI, 2008a
Table 1.1
26 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
Senior management attitudes
27 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
Some of the changes required
to truly internationalize HR
have more to do with a global mindset
than with behaviors.
What does senior mgmt. think?
28 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
Applying a strategic view of IHRM
29 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
Figure 1.4
A framework of strategic HRM in MNEs
30 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
■ Unmatched in our capabilities & plans
■ Highly leveraged against our particular assets
■ Designed to
1. Secure leverage against our assets
2.
what in other contexts are our strengths
3. Be difficult to respond to in a
discriminate & proportionate manner
Asymmetric events tend to be
Work around,
Offset, &
negate
31 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
The changing context of IHRM
32 of 32
Chapter
1
For use with International Human Resource Management 6e
By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr.
ISBN-10: 1408032090
© Cengage Learning
An MNE case study result
MNEs fail primarily because of
a lack of understanding of
in managing human resources
in foreign environments.
the
differences

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chapter_1ihrm (1).pptx

  • 1. 1 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning INTRODUCTION Chapter 1
  • 2. 2 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning Click on an item to go to its section. Click on the book cover below to return to this table of contents. START Chapter 1  Vocabulary  Objectives  Scope of book  Defining IHRM  Domestic vs. international  Variables that moderate the differences  The cultural environment  Industry type  Extent of MNE reliance on HC market  Senior mgmt. attitudes to international ops.  Applying a strategic view of IHRM  The changing context INTRODUCTION
  • 3. 3 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning  HRM, IHRM  PCN, HCN, TCN  MNE  expatriate = international assignee, inpatriate  repatriation  equity issues  psychological contract  culture shock  convergence/divergence hypotheses  Porter’s value chain model  index of transnationality  global mindset  asymmetric events  environmental dynamics  organizational culture Vocabulary
  • 4. 4 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning 1. Define IHRM and key terms 2. Introduce & review expatriate assignment mgmt. 3. Outline differences between domestic & IHRM 4. Detail a model that captures these differences 5. Discover complexity & increasing challenges to existing IHRM practices and models Objectives
  • 5. 5 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning Scope of book
  • 6. 6 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning Inter-relationships between approaches to the field Figure 1.1
  • 7. 7 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning Defining international HRM
  • 8. 8 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning 1. Human resource planning 2. Staffing: recruitment, selection, placement 3. Performance management 4. Training & development 5. Compensation & benefits 6. Industrial relations HRM activities
  • 9. 9 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning Morgan’s “3-D” definition of IHRM 1. The HR activities of procurement, allocation & utilization 2. The countries where IHRM occurs: » Host-country where subsidiary may be located » Parent-country where firm is headquartered » Other-countries that may be source of labor, finance & other inputs 3. The employees of an international firm: » HCNs (host country nationals) » PCNs (parent .. .. ) » TCNs (host .. .. )
  • 10. 10 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning International assignments create expatriates Figure 1.2
  • 11. 11 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning Stahl-Björkman-Morris def. of IHRM The field of IHRM covers  All issues related to firm outcomes  A wide range of HR issues facing MNEs in different parts of their organizations This definition includes comparative analyses of HRM in different countries.
  • 12. 12 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning Domestic vs. international
  • 13. 13 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning IHRM has … 1. more HR activities 2. a need for a broader perspective 3. more involvement in employees’ personal lives 4. changes of emphasis as the mix of expatriates & locals varies 5. more risk exposure 6. broader external influences IHRM is more complex than domestic HRM
  • 14. 14 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning ■ International taxation ■ International relocation & orientation ■ Administrative services for expatriates ■ Host-government relations ■ Language translation services IHRM has international HR activities
  • 15. 15 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning ■ Arranging for pre-departure training ■ Providing immigration & travel details ■ Providing housing, shopping, medical care, recreation & schooling information ■ Finalizing compensation details such as:  Delivery of salary overseas  Determination of overseas allowances  Taxation treatment International relocation involves:
  • 16. 16 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning Variables that moderate the differences
  • 17. 17 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning 1. The cultural environment 2. The industry(ies) with which the MNE is primarily involved 3. The extent to which the MNE relies on its HC domestic market 4. The attitudes of senior management Four more moderators in addition to IHRM complexity
  • 18. 18 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning A model of all 5 variables that moderate the differences between domestic and international HRM Figure 1.3
  • 19. 19 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning The cultural environment
  • 20. 20 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning ■ Culture shock ■ Emic ≠ etic ■ Convergence hypothesis research tends to focus on macro level ■ Divergence hypothesis research tends to focus on micro level ■ The international HR manager must be aware of cultural differences Culture matters
  • 21. 21 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning Industry type
  • 22. 22 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning An MNE performs somewhere in this range: Multidomestic Industries Global Industries Examples retailing, distribution, insurance International strategy Collapses to a series of domestic strategies. airlines, semiconductors, copiers Must integrate activities on a worldwide basis. The MNE industry type continuum
  • 23. 23 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning 1. Parent org. recognizes that its HRM reflects some assumptions & values of own home culture. 2. Parent org. recognizes that its own peculiar ways are neither universally better nor worse than others – just different & likely to exhibit strengths & weaknesses, particularly abroad. 3. Parent org. recognizes that its foreign subsidiaries may prefer other ways to manage people – ways that are neither intrinsically better nor worse, but possibly more effective locally. 4. Headquarters is willing to acknowledge cultural differences & take steps to make them discussable & therefore usable. 5. All parties build belief that cross-cultural learning invites more creative & effective ways of managing people. Laurent’s steps for true IHRM:
  • 24. 24 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning Extent of MNE reliance on HC market
  • 25. 25 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning Chapter 2 The world’s top 10 non-financial TNC, ranked by TNI, 2008a Table 1.1
  • 26. 26 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning Senior management attitudes
  • 27. 27 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning Some of the changes required to truly internationalize HR have more to do with a global mindset than with behaviors. What does senior mgmt. think?
  • 28. 28 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning Applying a strategic view of IHRM
  • 29. 29 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning Figure 1.4 A framework of strategic HRM in MNEs
  • 30. 30 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning ■ Unmatched in our capabilities & plans ■ Highly leveraged against our particular assets ■ Designed to 1. Secure leverage against our assets 2. what in other contexts are our strengths 3. Be difficult to respond to in a discriminate & proportionate manner Asymmetric events tend to be Work around, Offset, & negate
  • 31. 31 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning The changing context of IHRM
  • 32. 32 of 32 Chapter 1 For use with International Human Resource Management 6e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning An MNE case study result MNEs fail primarily because of a lack of understanding of in managing human resources in foreign environments. the differences