CPI Worldview Religion Bibliography You need at least 5 annotated bibliographies, and no more than 10.  Please note:  Wikipedia is not considered a reliable source. CPI Power Point Presentation Each group should do a power point presentation, of at least 10 slides and no more than 15. Background: Fit 4 Life is a fitness chain throughout the United States. They recently decided to open up four new gyms in Florence, Italy, with the objective of growing the organization globally and establishing an international presence. The premise of Fit 4 Life’s strategy is that clients use gyms as a social event. They promote clubs, small groups and large events throughout the month to encourage clients to come together socially as well as to work out. Each club has a general manager and 3-5 fitness instructors who provide support for the clients and the events. The organization has decided to use this expansion as a pilot project and if all goes well, they will consider spreading out across Europe and South America. This is a strategic endeavor, so it is important that the organization finds an effective formula to operate successfully in the global arena. The organization has hired you to provide consultation on how they should proceed. Part 1 (Due at the end of Week 3) This assignment allows you to demonstrate mastery of the course outcomes 3 and 4: · Identify the key challenges and trends in the changing globalized workforce in order to implement effective human resource practices · Analyze and assess global human resource policies, practices, and functions in order to meet an organization's goals and objectives while maintaining the values and traditions of the local culture You are part of the HR department. Your supervisor asks you to write a memo to management that explains recruiting, selecting and staffing employees for the new clubs. Some of the questions they would like to see addressed are: 1. What are the different sources of staffing and which one would be recommended for these new clubs? (Both the general manager and the instructors) 2. How should recruiting be carried out? 3. What kind of selection process should be used? 4. Create a Job Description for the manager’s role ( Template attached). Respond to the management with a memo. Respond to each question in depth and give a suggestion on how the club should proceed. 5 FULL PAGES FOR THE MEMO Be sure to support your suggestions with both the literature and current facts or statisticsthat you research for this task, as well as information from the course. You should use atleast three sources from the class materials. Part 2 (Due at the end of Week 5) This assignment allows you to demonstrate mastery of course outcomes 2 and 4: · Distinguish national and global culture and the impact they have on the globalized workforce in order to contribute to human resource practices across countries and cultures.

1. CPI Worldview Religion Bibliography
You need at least 5 annotated bibliographies, and no more than
10. Please note: Wikipedia is not considered a reliable source.
CPI Power Point Presentation
Each group should do a power point presentation, of at least 10
slides and no more than 15.
Background:
Fit 4 Life is a fitness chain throughout the United States. They
recently decided to open up four new gyms in Florence, Italy,
with the objective of growing the organization globally and
establishing an international presence.
The premise of Fit 4 Life’s strategy is that clients use gyms as a
social event. They promote clubs, small groups and large events
throughout the month to encourage clients to come together
socially as well as to work out. Each club has a general manager
and 3-5 fitness instructors who provide support for the clients
and the events.
The organization has decided to use this expansion as a pilot
project and if all goes well, they will consider spreading out
across Europe and South America. This is a strategic endeavor,
so it is important that the organization finds an effective
formula to operate successfully in the global arena.
The organization has hired you to provide consultation on how
they should proceed.
Part 1 (Due at the end of Week 3)
This assignment allows you to demonstrate mastery of the
course outcomes 3 and 4:
·
Identify the key challenges and trends in the changing
globalized workforce in order to implement effective human

2. resource practices
·
Analyze and assess global human resource policies,
practices, and functions in order to meet an organization's goals
and objectives while maintaining the values and traditions of
the local culture
You are part of the HR department. Your supervisor asks you to
write a memo to management that explains recruiting, selecting
and staffing employees for the new clubs. Some of the questions
they would like to see addressed are:
1. What are the different sources of staffing and which one
would be recommended for these new clubs? (Both the general
manager and the instructors)
2. How should recruiting be carried out?
3. What kind of selection process should be used?
4. Create a Job Description for the manager’s role (
Template attached).
Respond to the management with a memo. Respond to each
question in depth and give a suggestion on how the club should
proceed.
5 FULL PAGES FOR THE MEMO
Be sure to support your suggestions with both the literature and
current facts or statisticsthat you research for this task, as well
as information from the course. You should use atleast three
sources from the class materials.
Part 2 (Due at the end of Week 5)
This assignment allows you to demonstrate mastery of course
outcomes 2 and 4:
·
Distinguish national and global culture and the impact
they have on the globalized workforce in order to contribute to
human resource practices across countries and cultures
·
Analyze and assess global human resource policies,
practices, and functions in order to meet an organization's goals

3. and objectives while maintaining the values and traditions of
the local culture
The management team has now hired 4 managers, who are
PCNs (parent country nationals). Now they need to figure out
how to develop a compensation plan that is aligned with the
company’s compensation but also takes into consideration the
host country’s financial situation. You are asked to:
a. Put together a compensation plan along with a balance sheet
(see example I week 5). Assume that the base salary of a
manager in the U.S. is $5500 a month. You may need to do
some additional research to find out what taxes are in Florence,
what is a typical housing allowance, and cost of living. Your
balance sheet should reflect monthly amounts.
b. List the top three benefits that should be offered to the
expatriate. Explain why you chose these as the most important.
Make sure the cost is included in your balance sheet.
Review the Balance Sheet Approach to Compensation in the
course file “Global Compensation” in week 5.
Use at least three course resources for this assignment.
Part 3 (Due at the end of Week 7)
This assignment allows you to demonstrate mastery of the
course outcomes 1 and 4:
·
Demonstrate the inter-cultural competencies of an
effective citizen
·
Analyze and assess global human resource policies,
practices, and functions in order to meet an organization's goals
and objectives while maintaining the values and traditions of
the local culture
The organization has hired four general managers. The success
of these managers is vital to ensure the success of the expansion
into the international market. You are asked to propose the
content and format of a 3 day training program for the new
managers. Typically, this will consist of some pre-departure
training, as well as some in country training upon arrival.

4. Your task is to put together a proposal for the training program.
Your proposal should include three sections:
a. Importance of Training. Explain why training is such a
critical factor in expatriate success. Present an argument for
this, using literature and statistics. See: “Learn to support your
arguments” in week 7 readings.
b. Importance of Intercultural Competency. Describe
intercultural competency and why it is important for these
managers. How are you going to assess intercultural
competency?
How are you going to include this in the training?
c. Proposal for 3 day training. Create an agenda for three days
of training. Include topics to be addressed and rationale. See
example:
Day
Topic
Rationale
1
Introduction to Fit 4 Life
Managers need to know background and history of organization
in order to create organizational culture in the new clubs
(Shumer, 2019).
Use at least three course resources for this assignment.
image1.jpg
PLEASE READ CAREFULLY
- Please cite your work in your responses
- Please use APA (7th edition) formatting
- All questions and each part of the question should be answered

5. in detail (Go into depth)
- Response to questions must demonstrate understanding and
application of concepts covered in class,
- Use in-text citations and at
LEAST 2 resources per discussion from the school
materials that I provided to support all answers. -
The use of course materials to support ideas is HIGHLY
RECOMMENDED
- Responses MUST be organized (Should be logical and easy to
follow)
- Include at least 2 references and include in-text citations.
“USING REFERENCES FROM THE CLASS MATERIALS IS A
MUST. IF YOU CAN’T, THEN DON’T ACCEPT THIS OFFER”
Please refer to the attached "
Case Study" and complete Part 1 ONLY. As usual, I
added to each class material both the link and the book title in
order to help you with the in-text citations and references. So,
no need to apologize again for not using any class materials.
Thanks!
[removed]
Staffing Internationally
LEARNING OBJECTIVES
1. Be able to explain the three staffing strategies for
international businesses and the advantages
and disadvantages for each.

6. 2. Explain the reasons for expatriate failures.
One of the major decisions for HRM when a company decides to
operate overseas is how the overseas
operation will be staffed. This is the focus of this section.
Types of Staffing Strategy
There are three main staffing strategies a company can
implement when entering an overseas market,
with each having its advantages and disadvantages. The first
strategy is a home-country national strategy.
This staffing strategy uses employees from the home country to
live and work in the country. These
individuals are calledexpatriates. The second staffing strategy is
a host-country national strategy, which
means to employ people who were born in the country in which
the business is operating. Finally, a third-
country national strategy means to employee people from an
entirely different country from the home
country and host country. Table 14.4 "Advantages and
Disadvantages of the Three Staffing Strategies" lists
advantages and disadvantages of each type of staffing strategy.
Whichever strategy is chosen,
communication with the home office and strategic alignment
with overseas operations need to occur for a

7. successful venture.
Table 14.4 Advantages and Disadvantages of the Three Staffing
Strategies
Home-Country National Host-Country National Third-Country
National
Advantages
Greater control of organization
Language barrier is
eliminated
The third-country national
may be better equipped to
bring the international
perspective to the business
Managers gain experience in
local markets
Possible better
understanding of local rules
and laws
Costs associated with hiring

8. such as visas may be less
expensive than with home-
country nationals
Possible greater understanding
and implementation of business
strategy
Hiring costs such as visas
are eliminated
Book: UMGC (n.d.). Staffing Internationally.
Link:
https://learn.umgc.edu/d2l/le/content/721593/viewContent/2910
2369/View
Home-Country National Host-Country National Third-Country
National
Cultural understanding
Morale builder for employees
of host country
Disadvantages

9. Adapting to foreign
environment may be difficult
for manager and family, and
result in less productivity
Host-country manager may
not understand business
objectives as well without
proper training
Must consider traditional
national hostilities
Expatriate may not have
cultural sensitivity
May create a perception of
“us” versus “them”
The host government and/or
local business may resent
hiring a third-country
national

10. Language barriers
Can affect motivation of
local workers Cost of visa and hiring factors
HUMAN RESOURCE RECALL
Compare and contrast a home-country versus a host-country
staffing strategy.
Expatriates
According to Simcha Ronen, a researcher on international
assignments, there are five categories that
determine expatriate success. They include job factors,
relational dimensions, motivational state, family
situation, and language skills. The likelihood the assignment
will be a success depends on the attributes
listed in Table 14.5 "Categories of Expatriate Success
Predictors with Examples". As a result, the
appropriate selection process and training can prevent some of
these failings. Family stress, cultural
inflexibility, emotional immaturity, too much responsibility,
and longer work hours (which draw the
expatriate away from family, who could also be experiencing
culture shock) are some of the reasons cited
for expatriate failure.

11. Table 14.5 Categories of Expatriate Success Predictors with
Examples
Job Factors
Relational
Dimensions Motivational State
Family
Situation Language Skills
Technical skills
Tolerance for
ambiguity Belief in the mission
Willingness of
spouse to live
abroad
Host-country
language
Familiarity with host
country and
headquarters

12. operations Behavioral flexibility
Congruence with
career path
Adaptive and
supportive
spouse
Nonverbal
communication
Managerial skills Nonjudgmentalism
Interest in overseas
experience
Stable marriage
Administrative
competence
Cultural empathy and
low ethnocentrism
Interest in specific
host-country culture

13. Interpersonal skills
Willingness to
acquire new patterns
of behavior and
attitudes
Source: Adapted from Simcha Ronen, Training the International
Assignee (San Francisco: Jossey-Bass,
1989), 426–40.
Most expatriates go through four phases of adjustment when
they move overseas for an assignment. They
include elation/honeymoon, resistance, adaption,
andbiculturalism. In the elation phase, the employee is
excited about the new surroundings and finds the culture exotic
and stimulating. In the resistance phase,
the employee may start to make frequent comparisons between
home and host country and may seek out
reminders of home. Frustration may occur because of everyday
living, such as language and cultural
differences. During the adaptation phase, the employee gains
language skills and starts to adjust to life
overseas. Sometimes during this phase, expatriates may even
tend to reject their own culture. In this

14. phase, the expatriate is embracing life overseas. In the last
phase, biculturalism, the expatriate embraces
the new culture and begins to appreciate his old life at home
equally as much as his new life overseas.
Many of the problems associated with expatriate failures, such
as family life and cultural stress, have
diminished.
Host-Country National
The advantage, as shown in Table 14.4 "Advantages and
Disadvantages of the Three Staffing Strategies",
of hiring a host-country national can be an important
consideration when designing the staffing strategy.
First, it is less costly in both moving expenses and training to
hire a local person. Some of the less obvious
expenses, however, may be the fact that a host-country national
may be more productive from the start, as
he or she does not have many of the cultural challenges
associated with an overseas assignment. The host-
country national already knows the culture and laws, for
example. In Russia, 42 percent of respondents in
an expatriate survey said that companies operating there are

15. starting to replace expatriates with local
specialists. In fact, many of the respondents want the Russian
government to limit the number of
expatriates working for a company to 10 percent. [1] When
globalization first occurred, it was more likely
that expatriates would be sent to host countries, but in 2011,
many global companies are comfortable that
the skills, knowledge, and abilities of managers exist in the
countries in which they operate, making the
hiring of a host-country national a favorable choice. Also
important are the connections the host-country
nationals may have. For example, Shiv Argawal, CEO of ABC
Consultants in India, says, “An Indian CEO
helps influence policy and regulations in the host country, and
this is the factor that would make a global
company consider hiring local talent as opposed to foreign
talent.” [2]
Third-Country Nationals
One of the best examples of third-country nationals is the US
military. The US military has more than
seventy thousand third-country nationals working for the
military in places such as Iraq and Afghanistan.
For example, a recruitment firm hired by the US military called
Meridian Services Agency recruits

16. hairstylists, construction workers, and electricians from all over
the world to fill positions on military
bases. [3] Most companies who utilize third-country national
labor are not new to multinational
businesses. The majority of companies who use third-country
national staffing have many operations
Figure 14.2 Phases of Expatriate Adjustment
already overseas. One example is a multinational company
based in the United States that also has
operations in Spain and transfers a Spanish manager to set up
new operations in Argentina. This would be
opposed to the company in the United States sending an
American (expatriate) manager to Argentina. In
this case, the third-country national approach might be the
better approach because of the language
aspect (both Spain and Argentina speak Spanish), which can
create fewer costs in the long run. In fact,
many American companies are seeing the value in hiring third-
country nationals for overseas
assignments. In an International Assignments Survey,[4] 61

17. percent of United States–based companies
surveyed increased the use of third-country nationals by 61
percent, and of that number, 35 percent have
increased the use of third-country nationals to 50 percent of
their workforce. The main reason why
companies use third-country nationals as a staffing strategy is
the ability of a candidate to represent the
company’s interests and transfer corporate technology and
competencies. Sometimes the best person to
do this isn’t based in the United States or in the host country.
KEY TAKEAWAYS
international business. First, in the home-
country national strategy, people are employed from the home
country to live and work in the
country. These individuals are called expatriates. One advantage
of this type of strategy is easier
application of business objectives, although an expatriate may
not be culturally versed or well
accepted by the host-country employees.
-country strategy, workers are employed within that
country to manage the operations
of the business. Visas and language barriers are advantages of

18. this type of hiring strategy.
-country national staffing strategy means someone
from a country, different from home
or host country, will be employed to work overseas. There can
be visa advantages to using this
staffing strategy, although a disadvantage might be morale lost
by host-country employees.
EXERCISES
1. Choose a country you would enjoy working in, and visit that
country’s embassy page. Discuss the
requirements to obtain a work visa in that country.
2. How would you personally prepare an expatriate for an
international assignment? Perform
additional research if necessary and outline a plan.
[1] “Russia Starts to Abolish Expat jobs,” Expat Daily, April
27, 2011, accessed August 11, 2011, http://www.expat-
daily.com/news/russia-starts-to-abolish-expat-jobs/.
[2] Divya Rajagorpal and MC Govardhanna Rangan, “Global
Firms Prefer Local Executives to Expats to Run Indian
Operation,” Economic Times, April 20, 2011, accessed

19. September 15,
2011, http://articles.economictimes.indiatimes.com/2011-04-
20/news/29450955_1_global-firms-joint-ventures-
investment-banking.
[3] Sarah Stillman, “The Invisible Army,” New Yorker, June 6,
2011, accessed August 11,
2011,http://www.newyorker.com/reporting/2011/06/06/110606fa
_fact_stillman.
[4] “More Third Country Nationals Being Used,” n.d., SHRM
India, accessed August 11,
2011,http://www.shrmindia.org/more-third-country-nationals-
being-used.
http://www.expat-daily.com/news/russia-starts-to-abolish-expat-
jobs/
http://www.expat-daily.com/news/russia-starts-to-abolish-expat-
jobs/
http://articles.economictimes.indiatimes.com/2011-04-
20/news/29450955_1_global-firms-joint-ventures-investment-
banking
http://articles.economictimes.indiatimes.com/2011-04-
20/news/29450955_1_global-firms-joint-ventures-investment-
banking
http://www.newyorker.com/reporting/2011/06/06/110606fa_fact
_stillman
http://www.shrmindia.org/more-third-country-nationals-being-
used

20. This text was adapted under a Creative Commons Attribution-
NonCommercial-ShareAlike 3.0 License without attribution as
requested
by the work’s original creator or licensee.
Book: UMGC (n.d.). Global HR and Culture (International
HRM).
Link:https://learn.umgc.edu/d2l/le/content/721593/viewContent/
29102368/View
http://creativecommons.org/licenses/by-nc-sa/3.0/
http://creativecommons.org/licenses/by-nc-sa/3.0/
International HRM
Things Weren’t What They Seemed
When your organization decided to go “global” two years ago,
the executives didn’t know what they were
getting into. While the international market was attractive for
your company’s product, the overall plan
wasn’t executed well. The organization was having great
success selling its baby bath product in the
domestic market, and once that market was saturated, the
organization decided to sell the product in

21. South America. Millions of dollars’ worth of research went into
product marketing, and great success was
had selling the product internationally. It was only when the
organization decided to develop a sales
presence in Peru and purchase a company there that the
problems started. While market research had
been done on the product itself, the executives of the company
did little research to find out the cultural,
economic, and legal aspects of doing business in that country. It
was assumed that the Peru office would
run just like the US office in terms of benefits, compensation,
and hiring practices. This is where the
strategy went wrong.
Many cultural aspects presented themselves. When executives
visited the Peru office, the meeting was
scheduled for 9 a.m., and executives were annoyed that the
meeting didn’t actually start until 9:45 a.m.
When the annoyed executives started in on business
immediately, the Peruvian executives disapproved,
but the US executives thought they disapproved of the ideas and
weren’t aware that the disapproval came
from the fact that Peruvians place a high emphasis on
relationships, and it was rude to get down to
business right away. When the executives walked around the

22. office and spoke with various employees,
this blunder cost respect from the Peruvian executives. Because
Peru has a hierarchical structure, it was
considered inappropriate for the executives to engage
employees in this way; they should have been
speaking with management instead.
Besides the cultural misunderstandings, executives had grossly
underestimated the cost of compensation
in Peru. Peru requires that all employees receive a bonus on the
Peruvian Independence Day and another
on Christmas. The bonus is similar to the monthly salary. After
a year of service, Peruvians are allowed to
go on paid vacation for thirty calendar days. Higher benefit
costs were also an issue as well, since Peru
requires workers to contribute 22 percent of their income to
pension plans, and the company is required
to pay 9 percent of salaries toward social (universal) health
insurance. Life insurance is also required to be
paid by the employer after four years of service, and severance
payments are compulsory if the
organization has a work stoppage or slowdown.
As you wade through the variety of rules and regulations, you

23. think that this could have been avoided if
research had been performed before the buyout happened. If this
had occurred, your company would have
known the actual costs to operate overseas and could have
planned better.
Source: Based on information from CIA World Factbook and
PKF Business Advisors.
Offshoring, Outsourcing
LEARNING OBJECTIVES
1. Be able to explain the terminology related to international
HRM.
2. Define global HRM strategies.
3. Explain the impact of culture on HRM practices.
As you already know, this chapter is all about strategic human
resource management (HRM) in a global
environment. If this is an area of HRM that interests you,
consider taking the WorldatWork Global
Remuneration Professional certification (GRP). The GRP
consists of eight examinations ranging from
global rewards strategy to job analysis in a global setting. [1]
Before we begin to discuss HRM in a global environment, it is
important to define a few terms, some of

24. which you may already know. First, offshoring is when a
business relocates or moves some or part of its
operations to another country. Outsourcinginvolves contracting
with another company (onshore or
offshore) to perform some business-related task. For example, a
company may decide to outsource its
accounting operations to a company that specializes in
accounting, rather than have an in-house
department perform this function. Thus a company can
outsource the accounting department, and if the
function operates in another country, this would also be
offshoring. The focus of this chapter will be on
the HRM function when work is offshored.
The Global Enviornment
Although the terms international, global multinational, and
transnational tend to be used
interchangeably, there are distinct differences. First, a domestic
market is one in which a product or
service is sold only within the borders of that country.
Aninternational market is one in which a company
may find that it has saturated the domestic market for the
product, so it seeks out international markets in
which to sell its product. Since international markets use their

25. existing resources to expand, they do not
respond to local markets as well as a global organization. A
global organization is one in which a product
is being sold globally, and the organization looks at the world
as its market. The local responsiveness is
high with a global organization. Amultinational is a company
that produces and sells products in other
markets, unlike an international market in which products are
produced domestically and then sold
overseas. A transnational company is a complex organization
with a corporate office, but the difference is
that much of the decision making, research and development,
and marketing are left up to the individual
foreign market. The advantage to a transnational is the ability to
respond locally to market demands and
needs. The challenge in this type of organization is the ability
to integrate the international offices. Coca-
Cola, for example, engaged first in the domestic market, sold
products in an international market, and
then became multinational. The organization then realized they
could obtain certain production and
market efficiencies in transitioning to a transnational company,
taking advantage of the local market

26. knowledge.
Table 14.1 Differences between International, Global,
Multinational, and Transnational Companies
Global Transnational
Centrally controlled operations
Foreign offices have control over production,
markets
No need for home office integration, since home office makes
all decisions Integration with home office
Views the world as its market
High local responsiveness Low market responsiveness, since it
is centrally controlled
International Multinational
Centrally controlled Foreign offices are viewed as subsidiaries
No need for home office integration, as home office makes all
decisions Home office still has much control
Uses existing production to sell products overseas
High local responsiveness Low market responsiveness
Globalization has had far-reaching effects in business but also

27. in strategic HRM planning. The signing of
trade agreements, growth of new markets such as China,
education, economics, and legal implications all
impact international business.
Trade agreements have made trade easier for companies. A trade
agreement is an agreement between two
or more countries to reduce barriers to trade. For example, the
European Union consists of twenty-seven
countries (currently, with five additional countries as
applicants) with the goal of eliminating trade
barriers. The North American Trade Agreement (NAFTA) lifts
barriers to trade between Canada, the
United States, and Mexico. The result of these trade agreements
and many others is that doing business
overseas is a necessity for organizations. It can result in less
expensive production and more potential
customers. Because of this, along with the strategic planning
aspects of a global operation, human
resources needs to be strategic as well. Part of this strategic
process can include staffing differences,
compensation differences, differences in employment law, and
necessary training to prepare the

28. workforce for a global perspective. Through the use of trade
agreements and growth of new markets, such
as the Chinese market, there are more places available to sell
products, which means companies must be
strategically positioned to sell the right product in the right
market. High performance in these markets
requires human capital that is able to make these types of
decisions.
The level of education in the countries in which business
operates is very important to the HR manager.
Before a business decides to expand into a particular country,
knowledge of the education, skills, and
abilities of workers in that country can mean a successful
venture or an unsuccessful one if the human
capital needs are not met. Much of a country’s human capital
depends on the importance of education to
that particular country. In Denmark, for example, college
educations are free and therefore result in a
high percentage of well-educated people. In Somalia, with a
GDP of $600 per person per year, the focus is
not on education but on basic needs and survival.
Economics heavily influences HRM. Because there is economic
incentive to work harder in capitalist
societies, individuals may be more motivated than in communist

29. societies. The motivation comes from
workers knowing that if they work hard for something, it cannot
be taken away by the government,
through direct seizure or through higher taxes. Since costs of
labor are one of the most important strategic
considerations, understanding of compensation systems (often
based on economics of the country) is an
important topic. This is discussed in more detail in Section
14.3.3 "Compensation and Rewards".
The legal system practiced in a country has a great effect on the
types of compensation; union issues; how
people are hired, fired, and laid off; and safety issues. Rules on
discrimination, for example, are set by the
country. In China, for example, it is acceptable to ask someone
their age, marital status, and other
questions that would be considered illegal in the United States.
In another legal example, in Costa Rica,
“aguinaldos” also known as a thirteenth month salary, is
required in December. [2]This is a legal
requirement for all companies operating in Costa Rica. We
discuss more specifics about international laws
in Section 14.3.5 "The International Labor Environment".

30. Table 14.2 Top Global 100 Companies
Rank Company Revenues ($ millions) Profits ($ millions)
1 Walmart Stores 408,214 14,335
2 Royal Dutch Shell 285,129 12,518
3 Exxon Mobil 284,650 19,280
4 BP 246,138 16,578
5 Toyota Motor 204,106 2,256
6 Japan Post Holdings 202,196 4,849
7 Sinopec 187,518 5,756
8 State Grid 184,496 −343
9 AXA 175,257 5,012
10 China National Petroleum 165,496 10,272
11 Chevron 163,527 10,483
12 ING Group 163,204 −1,300
13 General Electric 156,779 11,025
14 Total 155,887 11,741
15 Bank of America Corp. 150,450 6,276
16 Volkswagen 146,205 1,334

31. 17 ConocoPhillips 139,515 4,858
18 BNP Paribas 130,708 8,106
Rank Company Revenues ($ millions) Profits ($ millions)
19 Assicurazioni Generali 126,012 1,820
20 Allianz 125,999 5,973
21 AT&T 123,018 12,535
22 Carrefour 121,452 454
23 Ford Motor 118,308 2,717
24 ENI 117,235 6,070
25 J.P. Morgan Chase & Co. 115,632 11,728
26 Hewlett-Packard 114,552 7,660
27 E.ON 113,849 11,670
28 Berkshire Hathaway 112,493 8,055
29 GDF Suez 111,069 6,223
30 Daimler 109,700 −3,670
31 Nippon Telegraph & Telephone 109,656 5,302
32 Samsung Electronics 108,927 7,562

32. 33 Citigroup 108,785 −1,606
34 McKesson 108,702 1,263
35 Verizon Communications 107,808 3,651
36 Crédit Agricole 106,538 1,564
37 Banco Santander 106,345 12,430
38 General Motors 104,589 —
Rank Company Revenues ($ millions) Profits ($ millions)
39 HSBC Holdings 103,736 5,834
40 Siemens 103,605 3,097
41 American International Group 103,189 −10,949
42 Lloyds Banking Group 102,967 4,409
43 Cardinal Health 99,613 1,152
44 Nestlé 99,114 9,604
45 CVS Caremark 98,729 3,696
46 Wells Fargo 98,636 12,275
47 Hitachi 96,593 −1,152
48 International Business Machines 95,758 13,425

33. 49 Dexia Group 95,144 1,404
50 Gazprom 94,472 24,556
51 Honda Motor 92,400 2,891
52 Électricité de France 92,204 5,428
53 Aviva 92,140 1,692
54 Petrobras 91,869 15,504
55 Royal Bank of Scotland 91,767 −4,167
56 PDVSA 91,182 1,608
57 Metro 91,152 532
58 Tesco 90,234 3,690
Rank Company Revenues ($ millions) Profits ($ millions)
59 Deutsche Telekom 89,794 491
60 Enel 89,329 7,499
61 UnitedHealth Group 87,138 3,822
62 Société Générale 84,157 942
63 Nissan Motor 80,963 456
64 Pemex 80,722 −7,011

34. 65 Panasonic 79,893 −1,114
66 Procter & Gamble 79,697 13,436
67 LG 78,892 1,206
68 Telefónica 78,853 10,808
69 Sony 77,696 −439
70 Kroger 76,733 70
71 Groupe BPCE 76,464 746
72 Prudential 75,010 1,054
73 Munich Re Group 74,764 3,504
74 Statoil 74,000 2,912
75 Nippon Life Insurance 72,051 2,624
76 AmerisourceBergen 71,789 503
77 China Mobile Communications 71,749 11,656
78 Hyundai Motor 71,678 2,330
Rank Company Revenues ($ millions) Profits ($ millions)
79 Costco Wholesale 71,422 1,086
80 Vodafone 70,899 13,782

35. 81 BASF 70,461 1,960
82 BMW 70,444 284
83 Zurich Financial Services 70,272 3,215
84 Valero Energy 70,035 −1,982
85 Fiat 69,639 −1,165
86 Deutsche Post 69,427 895
87 Industrial & Commercial Bank of China 69,295 18,832
88 Archer Daniels Midland 69,207 1,707
89 Toshiba 68,731 −213
90 Legal & General Group 68,290 1,346
91 Boeing 68,281 1,312
92 US Postal Service 68,090 −3,794
93 Lukoil 68,025 7,011
94 Peugeot 67,297 −1,614
95 CNP Assurances 66,556 1,396
96 Barclays 66,533 14,648
97 Home Depot 66,176 2,661
98 Target 65,357 2,488

36. Rank Company Revenues ($ millions) Profits ($ millions)
99 ArcelorMittal 65,110 118
100 WellPoint 65,028 4,746
Source: Adapted from Fortune 500 List
2010,http://money.cnn.com/magazines/fortune/global500/2010/f
ull_list/ (accessed August 11, 2011).
HRM Global Strategies
When discussing HRM from the global perspective, there are
many considerations. Culture, language,
management styles, and laws would all be considerations before
implementing HRM strategies. Beechler
et al. [3] argued that for multinational companies, identifying
the best HRM processes for the entire
organization isn’t the goal, but rather finding the best fit
between the firm’s external environment (i.e., the
law) and the company’s overall strategy, HRM policies, and
implementation of those policies. To this end,
Adler and Bartholomew developed a set of transnational
competencies that are required for business to
thrive in a global business environment.[4] A transnational
scope means that HRM decisions can be made

37. based on an international scope; that is, HRM strategic
decisions can be made from the global perspective
rather than a domestic one. With this HRM strategy, decisions
take into consideration the needs of all
employees in all countries in which the company operates. The
concern is the ability to establish
standards that are fair for all employees, regardless of which
country they operate in.
Atransnational representation means that the composition of the
firm’s managers and executives should
be a multinational one. A transnational process, then, refers to
the extent to which ideas that contribute to
the organization come from a variety of perspectives and ideas
from all countries in which the
organization operates. Ideally, all company processes will be
based on the transnational approach. This
approach means that multicultural understanding is taken into
consideration, and rather than trying to
get international employees to fit within the scope of the
domestic market, a more holistic approach to
HRM is used. Using a transnational approach means that HRM
policies and practices are a crucial part of
a successful business, because they can act as mechanisms for
coordination and control for the

38. international operations. [5] In other words, HRM can be the
glue that sticks many independent operations
together.
http://money.cnn.com/magazines/fortune/global500/2010/full_li
st/
Before we look at HRM strategy on the global level, let’s
discuss some of the considerations before
implementing HRM systems.
Culture as a Major Aspect of HRM Overseas
Culture is a key component to managing HRM on a global scale.
Understanding culture but also
appreciating cultural differences can help the HRM strategy be
successful in any country. Geert Hofstede,
a researcher in the area of culture, developed a list of five
cultural dimensions that can help define how
cultures are different. [6]
The first dimension of culture is individualism-collectivism. In
this dimension, Hofstede describes the
degree to which individuals are integrated into groups. For
example, in the United States, we are an
individualist society; that is, each person looks after him- or
herself and immediate family. There is more

39. focus on individual accomplishments as opposed to group
accomplishments. In a collective society,
societies are based on cohesive groups, whether it be family
groups or work groups. As a result, the focus
is on the good of the group, rather than the individual.
Power distance, Hofstede’s second dimension, refers to the
extent to which the less powerful members of
organizations accept that power is not distributed equally. For
example, some societies may seek to
eliminate differences in power and wealth, while others prefer a
higher power distance. From an HRM
perspective, these differences may become clear when
employees are asked to work in cross-functional
teams. A Danish manager may have no problem taking advice
from employees because of the low power
distance of his culture, but a Saudi Arabian manager may have
issues with an informal relationship with
employees, because of the high power distance.
Uncertainty avoidance refers to how a society tolerates
uncertainty. Countries that focus more on
avoidance tend to minimize the uncertainty and therefore have
stricter laws, rules, and other safety
measures. Countries that are more tolerant of uncertainty tend

40. to be more easygoing and relaxed.
Consider the situation in which a company in the United States
decides to apply the same HRM strategy
to its operations in Peru. The United States has an uncertainty
avoidance score of 46, which means the
society is more comfortable with uncertainty. Peru has a high
uncertainty avoidance, with a score of 87,
indicating the society’s low level of tolerance for uncertainty.
Let’s suppose a major part of the pay
structure is bonuses. Would it make sense to implement this
same compensation plan in international
operations? Probably not.
Masculinity and femininity refers to the distribution of
emotional roles between genders, and which
gender norms are accepted by society. For example, in countries
that are focused on femininity,
traditional “female” values such as caring are more important
than, say, showing off. The implications to
HRM are huge. For example, Sweden has a more feminine
culture, which is demonstrated in its
management practices. A major component in managers’
performance appraisals is to provide mentoring

41. to employees. A manager coming from a more masculine culture
may not be able to perform this aspect of
the job as well, or he or she may take more practice to be able
to do it.
The last dimension is long-term–short-term orientation, which
refers to the society’s time horizons. A
long-term orientation would focus on future rewards for work
now, persistence, and ordering of
relationships by status. A short-term orientation may focus on
values related to the past and present such
as national pride or fulfillment of current obligations. We can
see HRM dimensions with this orientation
in succession planning, for example. In China the person getting
promoted might be the person who has
been with the company the longest, whereas in short-term
orientation countries like the United States,
promotion is usually based on merit. An American working for
a Chinese company may get upset to see
someone promoted who doesn’t do as good of a job, just
because they have been there longer, and vice
versa.
Based on Hofstede’s dimensions, you can see the importance of
culture to development of an
international HRM strategy. To utilize a transnational strategy,

42. all these components should be factored
into all decisions such as hiring, compensation, and training.
Since culture is a key component in HRM, it
is important now to define some other elements of culture.
Table 14.3 Examples of Countries and Hofstede’s Dimensions
Country
Power
Distance Individualism/Collectivism Masculinity/Femininity
Uncertainty
Avoidance
Long/Short
Term
Orientation
New
Zealand 22 79 58 49 30
UK 35 89 66 35 25
United
States 40 91 62 46 29

43. Country
Power
Distance Individualism/Collectivism Masculinity/Femininity
Uncertainty
Avoidance
Long/Short
Term
Orientation
Japan 54 46 95 92 80
Taiwan 58 17 45 69 87
Zambia 64 27 41 52 25
India 77 48 56 40 61
China 80 20 66 40 118
Philippines 94 32 64 44 19
Chile 63 23 28 86
(this
dimension
was only

44. studied in 23
countries)
Power distance: Refers to the comfort level of power
differences among society members. A lower score
shows greater equality among levels of society, such as New
Zealand.
Individualism/collectivism: A high ranking here, such as the
United States, means there is more concern
for the individualistic aspects of society as opposed to
collectivism. Countries with high scores on
individualism means the people tend to be more self-reliant.
Masculinity/femininity: A lower score may indicate lower levels
of differentiation between genders. A
lower score, such as Chile, may also indicate a more openly
nurturing society.
Uncertainty avoidance: Refers to the tolerance for uncertainty.
A high score, such as Japan’s, means
there is lower tolerance for uncertainty, so rules, laws, policies,
and regulations are implemented.
Long/short term orientation: Refers to thrift and perseverance,
overcoming obstacles with time (long-
term orientation), such as China, versus tradition, social
obligations.

45. Culture refers to the socially accepted ways of life within a
society. Some of these components might
include language, norms, values, rituals, andmaterial culture
such as art, music, and tools used in that
culture. Language is perhaps one of the most obvious parts of
culture. Often language can define a culture
and of course is necessary to be able to do business. HRM
considerations for language might include
something as simple as what language (the home country or host
country) will documents be sent in? Is
there a standard language the company should use within its
communications?
FORTUNE 500 FOCUS
For anyone who has traveled, seeing a McDonald’s overseas is
common, owing to the need to expand
markets. McDonald’s is perhaps one of the best examples of
using cultural sensitivity in setting up its
operations despite criticism for aggressive globalization. Since
food is usually a large part of culture,
McDonald’s knew that when globalizing, it had to take culture
into consideration to be successful. For
example, when McDonald’s decided to enter the Indian market

46. in 2009, it knew it needed a vegetarian
product. After several hundred versions, local McDonald’s
executives finally decided on the McSpicy
Paneer as the main menu item. The spicy Paneer is made from
curd cheese and reflects the values and
norms of the culture.[7]
In Japan, McDonald’s developed the Teriyaki Burger and
started selling green tea ice cream. When
McDonald’s first started competing in Japan, there really was
no competition at all, but not for the reason
you might think. Japanese people looked at McDonald’s as a
snack rather than a meal because of their
cultural values. Japanese people believe that meals should be
shared, which can be difficult with
McDonald’s food. Second, the meal did not consist of rice, and
a real Japanese meal includes rice—a part
of the national identity [8] and values. Most recently,
McDonald’s introduced the McBaguette in France to
align with French cultural values. [9] The McBaguettes will be
produced in France and come with a variety
of jams, a traditional French breakfast. Just like in product
development, HRM must understand the
differences between cultures to create the best HRM systems
that work for the individual culture.

47. Norms are shared expectations about what is considered correct
and normal behavior. Norms allow a
society to predict the expected behavior and be able to act in
this manner. For many companies operating
in the United States, a norm might be to dress down for work,
no suit required. But if doing business
overseas, that country’s norm might be to wear a suit. Not
understanding the norms of a culture can
offend potential clients, customers, and colleagues.
Values, another part of culture, classify things as good or bad
within a society. Values can evoke strong
emotional feelings from a person or a society. For example,
burning of the American flag results in strong
emotions because values (love of country and the symbols that
represent it) are a key component of how
people view themselves, and how a culture views society. In
April 2011, a pastor in Florida burned a holy
book, the Koran, which sparked outrage from the Muslim
community all over the world. This is an
example of a strongly held value that when challenged can
result in community rage. [10]
Rituals are scripted ways of interacting that usually result in a

48. specific series of events. Consider a
wedding in the United States, for example. The basic wedding
rituals (first dance, cutting of cake, speech
from best man and bridesmaid) are practiced throughout society.
Besides the more formalized rituals
within a society, such as weddings or funerals, daily rituals,
such as asking someone “How are you?”
(when you really don’t want to know the answer) are part of
culture, too. Even bonding rituals such as
how business cards are exchanged and the amount of eye
contact given in a social situation can all be
rituals as well.
The material items a culture holds important, such as artwork,
technology, and architecture, can be
considered material culture. Material culture can range from
symbolic items, such as a crucifix, or
everyday items, such as a Crockpot or juicer. Understanding the
material importance of certain items to a
country can result in a better understanding of culture overall.
HUMAN RESOURCE RECALL
Which component of culture do you think is the most important
in HRM? Why?
KEY TAKEAWAYS

49. operations to a country different
from the one it currently operates in.
company to do some work for another.
This can occur domestically or in an offshoring situation.
the
country that the business operates
in.
products in other countries, while
a multinational one means that not only are products being sold
in a country, but operations are
set up and run in a country other than where the business began.
consists of three components. First,
the transnational scope involves the ability to make decisions on
a global level rather than a
domestic one. Transnational representation means that managers
from all countries in which the
business operates are involved in business decisions. Finally, a

50. transnational process means that
the organization can involve a variety of perspectives, rather
than only a domestic one.
culture. Hofstede developed five
dimensions of culture. First, there is the individualism-
collectivismaspect, which refers to the
tendency of a country to focus on individuals versus the good of
the group.
how willing people are to accept
unequal distributions of power.
the culture is to accept not knowing
future outcomes.
-feminine dimension refers to the acceptance of
traditional male and female
characteristics.
-term
orientation versus short-term orientation in
decision making.
material culture.Norms are the

51. generally accepted way of doing things, and values are those
things the culture finds important.
Every country has its own set of rituals for ceremonies but also
for everyday
interactions. Material culture refers to the material goods, such
as art, the culture finds
important.
market are the economics, the law, and
the level of education and skill level of the human capital in
that country.
EXERCISE
1. Visit http://www.geert-hofstede.com/ and view the cultural
dimensions of three countries. Then
write a paragraph comparing and contrasting all three.
[1] “Global Remuneration Professional,” WorldatWork Society
of Certified Professionals, accessed August 10,
2010,http://www.worldatworksociety.org/society/certification/ht
ml/certification-grp.jsp.
[2] “Labor Laws and Policy,” The Real Costa Rica, accessed
April 29,
2011,http://www.therealcostarica.com/costa_rica_business/costa

52. _rica_labor_law.html.
http://www.geert-hofstede.com/
http://www.worldatworksociety.org/society/certification/html/ce
rtification-grp.jsp
http://www.therealcostarica.com/costa_rica_business/costa_rica
_labor_law.html
[3] Schon Beechler, Vladimir Pucik, John Stephan, and Nigel
Campbell, “The Transnational Challenge: Performance
and Expatriate Presence in the Overseas Affiliates of Japanese
MNCs,” in Japanese Firms in Transition: Responding
to the Globalization Challenge, Advances in International
Management, vol. 17, ed. Tom Roehl and Allan Bird
(Bingley, UK: Emerald Group, 2004), 215–42.
[4] Nancy J. Adler and Susan Bartholomew, “Managing
Globally Competent People,” Executive6, no. 3 (1992): 52–
65.
[5] Markus Pudelko and Anne-Wil Harzing, “Country-of-Origin,
Localization, or Dominance Effect? An Empirical
Investigation of HRM Practices in Foreign Subsidiaries,”
Human Resource Management 46, no. 4 (2007): 535–59.
[6] Geert Hofstede, Cultural Dimensions website, accessed
April 29, 2011, http://www.geert-hofstede.com/.
[7] Gus Lubin, “A Brilliant Lesson in Globalization from
McDonalds,” Business Insider, June 16, 2011, accessed

53. August 13, 2011, http://www.businessinsider.com/a-brilliant-
lesson-in-globalization-from-mcdonalds-2011-6.
[8] Emiko Ohnuki-Tierney, “McDonald’s in Japan: Changing
Manners and Etiquette,” in Golden Arches East:
McDonald’s in East Asia, ed. J. L. Watson (Stanford, CA:
Stanford University Press, 1997), 161-82.
[9] Sarah Rappanport, “McDonalds Introduces France to the
McBaguette,” Business Insider Europe, July 29, 2011,
accessed August 12,
2011,http://www.businessinsider.com/mcbaguette-mcdonalds-
france-2011-7.
[10] Sarah Drury, “Violent Protests Over Koran Burning
Spread,” ABC News, April 4, 2011, accessed April 27,
2011,
http://www.abc.net.au/worldtoday/content/2011/s3181541.htm.
http://www.geert-hofstede.com/
http://www.businessinsider.com/a-brilliant-lesson-in-
globalization-from-mcdonalds-2011-6
http://www.businessinsider.com/mcbaguette-mcdonalds-france-
2011-7
http://www.abc.net.au/worldtoday/content/2011/s3181541.htm

54. Human Resources Management Issues, Challenges and Trends:
“Now and Around the Corner”, pages 31–52.
Copyright © 2019 by Information Age Publishing
All rights of reproduction in any form reserved. 31
CHAPTER 2
GLOBALIZATION AND HUMAN
RESOURCE MANAGEMENT
Ronald R. Sims
The environment in which today’s organizations find
themselves continues to be
more globalized as the world is becoming a “global village.”
This globalization
is driven in part by continued growth in multinational
investment to include more
and more companies entering into alliances with foreign
companies, exporting
their products overseas, and building plants in other countries.
All of the human
resource management (HRM) challenges, issues and
opportunities discussed in
previous chapters in this book are interrelated conceptually and
operationally in
the international context.
This chapter discusses a number of the HRM challenges, issues
and opportuni-
ties HRM professionals and their organizations will need to

55. address in today’s and
tomorrow’s global world of work. The chapter first takes a look
at today’s global
organization and some HRM issues. Next, the discussion turns
to the globaliza-
tion of business and factors affecting HRM in global markets
before focusing
on an analysis of levels of global or international and HRM
operations. Finally,
the chapter discusses globalization and implications and impacts
on HRM in the
future.
C
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p
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r
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56. t
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57. r
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58. o
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59. i
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60. d
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32 • RONALD R. SIMS
TODAY’S GLOBAL ORGANIZATION AND
HUMAN RESOURCE MANAGEMENT ISSUES
For the past decades, there have been profound changes in the
international busi-
ness scene. With geographic national borders being almost
replaced by multi-
national firms, and a heightened level of labor mobility around
the globe, the
implication of HRM to design and develop firms’ global
business strategy, and
to direct individuals (i.e. managers and professional staff alike)
for working in
different countries, is undoubtedly significant. Rosalie Tung
(2016) has recently
suggested that in the past three decades or so,

62. globalization/regionalization, mi-
gration and reverse migration (also referred to as “brain
circulation”), the ascen-
dancy of emerging markets, the demand for people with a global
mindset, and
the worldwide war for talent have brought about fundamental
changes to the na-
ture, magnitude, and raison d’etre for HRM in a global context.
And, that these
changes require HRM professionals and their organizations to
adopt new lenses to
fully understand the dynamics that impact global or
international human resource
management policies and practices.
Organizations are attempting to gain competitive advantage,
which can be pro-
vided by international expansion as these countries are new
markets with large
numbers of potential customers. For example, organizations that
are producing
below their capacity can use expansion to possibly increase
sales and profits. Still
other organizations are building production facilities in other
countries as a means
of capitalizing on those countries’ lower labor costs for
relatively unskilled jobs.
Importing and exporting goods and services is the easiest way
to “go global.”
India has the world’s second-largest population (1.2 billion
people) and a grow-
ing middle class, so businesses are increasingly trying to
expand their exports to
that country (U.S. News & World Report, 2016). According to
Snell and Morris

63. (2019), Apple is one of those companies. Although the iPhone
dominates the U.S.
market, only 5 percent of smartphones in India are iPhone.
Partnerships, mergers
and takeovers are other ways companies are addressing
globalization.
The reality is that most organizations now function in the global
economy.
For example, U.S. businesses are entering international markets
at the same time
that foreign companies are entering the U.S. market. Consider
the reality that
many American and foreign firms have partnered with Chinese
firms to expand
in China, which is the world’s most populous country, with 1.3
billion people.
In turn, cross-border mergers continue to increase (Noe,
Hollenbeck, Gerhart &
Wright, 2019; Shen, 2016) as Chinese and other foreign
companies are merging
with American firms (Sheng, 2016). Consider also that it has
been suggested that
globalization is the dominant driving force in the world
economy, reshaping soci-
eties and politics as it changes lives (Cascio, 2019).
Globalization has also resulted in the blurring of national
identities of prod-
ucts. Many may think of Budweiser as an American beer, but its
maker (Anheus-
er-Busch) is owned by a Belgian company called InBev. Like
many other compa-
nies, Anheuser-Busch InBev has been purchasing or partnering
with factories and

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Globalization and Human Resource Management • 33
brands in other countries such as China and Mexico to expand
its sales. Similarly,
BMW is a German brand, but the automaker builds cars in the
United States, Chi-
na and elsewhere (Choi & Schreiner, 2014; Duprey, 2013; Snell
& Morris, 2019).
Giant multinational corporations such as Nestlé, Unilever, and
AstraZeneca,
began to lose their national identities as they integrated and
coordinated product
design, manufacturing, sales, and services on a worldwide basis.
Further, many
other U.S. firms, for example, generate a substantial portion of
their sales and
profits from other countries; companies such as Coca-Cola,
Exxon/Mobil, and
Microsoft derive a significant portion of total sales and profits
from outside the
United States (Dewhurst, Harris & Heywood, 2012). In 1982
GE, for example,
generated 20 percent of its sales outside the United States and
70 percent in 2017
(Mann & Spegele, 2017). Many foreign organizations have
taken advantage of
growth opportunities in the United States. For example, Toyota,
based in Japan,
has grown its market share and increased its number of jobs in

65. the United States
and elsewhere in North America. Also, Toyota, Honda, Nissan,
and other Japa-
nese automobile manufacturers, electronic firms, and suppliers
have maintained
operations in the United States (Mathis, Jackson, Valentine, &
Meglich, 2017).
Higginbottom (2017) has recently argued that these are indeed
“uncertain
times” (i.e., for global (and local) organizations and HRM
professionals). The
last several years have played host to seismic political events
such as Brexit and
the election of Donald Trump as the U.S. president in 2016. The
acronym VUCA
which stands for volatility, uncertainty, complexity and
ambiguity is a trendy
management term that perfectly encapsulates the conditions that
many multina-
tionals are operating under.
Brexit, for example, which stemmed from a slim majority of
U.K. voters de-
ciding in a June 23, 2016 referendum, that they no longer
wanted to be governed
largely from a bureaucracy located in Brussels, Belgium,
continues to pose a seri-
ous threat to the European Union. The EU and Britain are
currently negotiating
the terms of their separation which will have major implications
for global busi-
nesses and many observers predict that, at least in the short
term, this exit will
have a negative impact on the British economy (see, Amadeo,
2018a; Partington,

66. 2018; Romei, 2018).
Numerous free-trade agreements forged between nations over
the past 60
years, like the General Agreement on Tariffs and Trade (GATT)
in 1948 and the
North American Free Trade Agreement (NAFTA) in 1994,
helped quicken the
pace of globalization. However, the election of Donald Trump
as president of
the U.S. in 2016 has created uncertainty for organizations
making their location
decisions in his efforts to renegotiate, for example, NAFTA
which is the world’s
largest free trade agreement. In an effort to keep companies
from moving produc-
tion outside the United States, Trump announced a 35 percent
tariff on steel and a
10 percent tariff on aluminum on Canada, Mexico and the EU.
President Trump
campaigned on renegotiating NAFTA and frequently berated
companies seeking
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34 • RONALD R. SIMS
to build plants in Mexico, for example, particularly when it
entails closing plants
in the United States (see Amadeo, 2018b; Stoll & Colias, 2016).
While factors like Berxit and the election of Trump as the U.S.

67. president are
impacting globalization, perhaps none is more important that
the rise of Inter-
net technologies (Dreyfuss, 2017; Quora, 2017; Sato, 2014).
The Internet, as it
continues to develop, has certainly changed the ways that
people live and work.
Indeed, in some industries, such as music and e-commerce, it
has completely
revolutionized the rules of the game (Cascio, 2019).
The Internet gives everyone in the organization, at any level and
in every func-
tional areas, the ability to access a mind-boggling array of
information-instanta-
neously from anywhere. Ideas can be zapped around the globe
in the blink of an
eye instead of seeping out over month or years. A global
marketplace has been
created by factors such as the following:
• Global telecommunications enhanced by fiber optics,
satellites, and com-
puter technology.
• E-commerce that makes organizations global from the moment
their Web
sites are up and running, as customers from around the world
log on.
• Financial markets are now open 24 hours a day around the
world (Lioudis,
2018).
• Cost pressures (that prod firms to move where labor and other
resources are

68. cheapest), coupled with a search for new markets (as firms and
consumers
around the world seek foreign goods and services).
• The integration of cultures and values through international
travel, as well
as the spread of goods such as music, food, and clothing. In
combination,
these have led to common consumer demands around the world
(Tarique,
Briscoe, & Schuler, 2016).
• The emergence of global standards and regulations for trade,
commerce,
finance, products, and services (Gunther, 2005).
The rapid increase in telecommunications and information
technology en-
ables work to be done more rapidly, efficiently, and effectively
all over the world.
Friedman (2016 has suggested that an expanding high-tech,
information-based
economy increasingly defines globalization and shapes the
business cycles within
it. That is, much of the flow of capital, labor, services, and
goods among Asia,
America and Europe are technology based. Without chips,
screens, and software
help from Asia, the U.S. economy would grind to a halt.
Clearly, open borders
continue to allow new ideas and technology to flow freely
around the globe, ac-
celerating productivity growth and allowing businesses to be
more competitive
than they have been in past decades.

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Globalization and Human Resource Management • 35
Globalization and HRM
Due to globalization, companies have to balance a complicated
set of issues
related to different geographies, including different cultures,
employment laws,
and business practices, and the safety of employees and
facilities abroad. HRM
issues underlie each of these and other concerns. They include
such things as
dealing with employees today and tomorrow who, via the
Internet and social me-
dia, are better informed about global job opportunities and are
willing to pursue
them, even if it means working for competing companies or
foreign companies.
Determining the knowledge and skill base of workers worldwide
and figuring out
how best to hire and train them (sometimes with materials that
must be translated
into a number of different languages) is also an issue for
companies in the global
environment.
There is every indication that the recent social and political
changes have con-
tributed to globalization and the movement toward international
competition. De-

70. spite the reasons an organization may have for expanding
operations globally,
HRM is critical to the success of any global initiative. If one
adopts the basic prin-
ciple that HRM strategy must be derived from corporate
strategy and that people
do determine an organization’s success or failure, then the HRM
function needs
to be a key strategic partner in any global operations. Still, in
some instances
HRM is often neglected in the planning and establishment of
global endeavors.
Despite such neglect, today’s and tomorrow’s HRM
professionals must continue
to develop their own and other organizational members
competencies or skills in
the ever-growing international context of the world of work.
This means not only
understanding the events and factors that continue to increase
the global nature of
business but also their role in helping to improve their
organization’s competitive
advantage in global environments.
UNDERSTANDING THE GLOBAL ENVIRONMENT
It is important for HRM professionals to continue to recognize
that because politi-
cal, economic, social and technological conditions are
constantly shifting around
the world, how employees are managed in those changing
environments will need
to shift as well. HRM professionals can better understand the
global environment
by regularly conducting a political, economic, sociocultural,
and technological

71. (PEST) analysis which can act as an audit of a company’s
environmental influ-
ences to assist in determining the corporate strategy and
accompanying HRM
response(s) (see, for example, Post, 2017; Snell & Morris,
2019).
By conducting a PEST analysis HRM professionals and other
organizational
leaders are able to scan different contextual environments to
understand the long-
term trends and how they might impact a company. A PEST
analysis can help
HRM professionals to 1) spot business or human resource
opportunities, and give
them advanced warning of threats, 2) identify trends in the
business environment
so they can proactively adapt to these changes, 3) help to avoid
implementing
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36 • RONALD R. SIMS
HRM practices in a particular country where they may fail, and
4) put an end to
old habits and assumptions about how people should be
managed to help bring
about innovative ideas for the entire organization.
Political Factors

72. Government regulations and legal issues affect a company’s
ability to be profit-
able and successful, and this factor looks at how that can
happen. Issues that must
be considered include tax guidelines, copyright and property
law enforcement,
political stability, trade regulations, social and environmental
policy, employment
laws and safety regulations. Companies should also consider
their local and fed-
eral power structure and discuss how anticipated shifts in power
could affect their
business.
HRM professionals can assess the political factors by examining
a country’s
labor laws, property rights, and patents. When Lincoln Electric,
the Ohio-based
welding company, for example, started operations in Brazil,
they could not offer
their yearly bonus program based on performance because any
bonuses paid for
two consecutive years became a legal entitlement (Siegel &
Larson, 2009).
Property rights in many countries are poorly protected by
governments. Who-
ever has the political power or authority can seize others’
property with few or
no repercussions. Civil unrest can also lead to the poor
enforcement of property
rights. Businesses have less incentive to invest in countries or
locate factories
in countries experiencing strife. Another issue that has
implications for global
companies relates to the intellectual property rights—rights

73. related to patents,
trademarks, and so forth.
Economic Factors
This factor examines the outside economic issues that can play
a role in a
company’s success. Items for HRM professionals and other
organizational mem-
bers to consider include economic growth, exchange, inflation
and interest rates,
economic stability, anticipated shifts in commodity and
resource costs, unemploy-
ment policies, credit availability, unemployment policies, and
the business cycle
followed in the country.
By looking at trends around market and trade cycles, specific
industry changes,
customer preferences, and country economic growth forecasts
HRM profession-
als and other organizational members can best understand the
economic issues
that are bound to have an impact on the company. For example,
in 1995, the World
Trade Organization (WTO) was formalized as a cooperative
forum for country
leaders to come together and increase free trade across the
world. As of Decem-
ber 2017, the WTO member countries represented over 164
member-nations and
covered 97 percent of all international trade (Amadeo, 2018c).
In addition, coun-
tries are continually negotiating free trade agreements with each
other in hopes of
increasing their economic activity.

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Globalization and Human Resource Management • 37
Since China joined the WTO in 2001, its economy has grown
dramatically,
drastically altering its political and trading relationship with
many nations. In a
strange twist of fate, Xi Jinping, the leader of the communist
world and China’s
president, has taken to defending free trade and globalization,
whereas U.S. presi-
dent Donald Trump, leader of the free world, has taken to
attacking them as noted
previously (Elliott & Wearden, 2017).
Sociocultural Factors
The sociocultural factor analyzes the demographic and cultural
aspects of the
company’s market. These factors help companies examine
consumer needs and
determine what pushes them to make purchases. Among the
items that should be
examined are communications, religion, values and ideologies,
education, social
structure, demographics, population growth rates, age
distribution, cultural limi-
tations, lifestyle attitude, attitudes towards work and job market
trends.

75. An understanding of sociocultural factors has important
implications when it
comes to a company’s decision about when and how to do
business in a country.
For example, because of low labor costs and language
similarities, many U.S.
businesses have found India an attractive place to locate their
facilities, particu-
larly call centers.
By recognizing and accommodating different ideologies,
religious beliefs,
communication styles, education systems, and social structures,
HRM profession-
als and other organizational members stand a better chance of
understanding the
culture of a host country—a country in which an international
business operates.
Even in countries that have close language or cultural links,
HRM practices can
be dramatically different. For example, employers might be
expected to provide
employees with meals while at work and transportation between
home and work.
In most of the Islamic Middle East, it is completely acceptable
to ask coworkers
very personal questions about their children, especially their
sons, but never about
their wives (Tulshyan, 2010; Vollmer, 2015).
Technological Factors
Technology issues affect how an organization delivers its
product or service
to the marketplace. Specific items that need to be scrutinized
include, but are not

76. limited to, government spending on the maturity of
manufacturing equipment,
information systems, technological research, technological
advancements, the life
cycle of current technology, the role of the Internet and how
any changes to it
may play out, and the impact of potential information
technology changes. Even
in less-developed countries where manufacturing is typically
stronger due to low
cost of labor and high cost of capital-intensive equipment,
labor-saving technolo-
gy is becoming more affordable and accessible. Take, for
instance, a textile factor
in Vietnam. It is more cost effective for the factory to purchase
high-tech thread-
ing equipment to spin the cotton into thread than to hire
hundreds of people to
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38 • RONALD R. SIMS
thread the cotton by hand, even when the average wage for such
employees is less
than $100 a month. Just like the other factors, companies should
consider genera-
tional shifts and their related technological expectation to figure
out how they will
affect who will use their product and how it’s delivered (Snell
& Morris, 2019).

77. While advances in technology have pushed for more service-
based jobs, infor-
mation systems and technology platforms have also increased
the rate at which
these services can be traded across countries. Along with the
creation of the WTO,
1995 also signifies the beginning of the Internet era mentioned
early which is a
major driver of the increase in globalization.
Table 2.1 provides an example of PEST analysis that can give
HRM profession-
als and other organizational members a clear understanding of
how this works:
Every country varies in terms of its political, economic,
sociocultural and tech-
nological systems. These variations directly influence the types
of HRM systems
that must be developed to accommodate the particular situation.
The extent to
which these differences affect a company depends on how
involved the company
is in global markets.
Today, employees around the world continue to become
empowered to com-
pete without the need of a large company. For example, many
websites such as
guru.com have developed an online marketplace where
individuals can offer vari-
ous services and compete for business throughout the world.
Consider the reality
that one might be interested in developing a new website for
their company. By
going to the Internet one can select various individuals offering

78. specific services.
They may be from different parts of the world. In conclusion,
these PEST factors
shift the way companies are formed and how they and their
HRM professionals go
about managing their human resources in a global environment.
ANALYZING A COMPANY’S LEVEL OF
INTERNATIONAL AND HRM OPERATIONS
Today’s international business operations can take several
different forms. A large
percentage of these operations carry on their international
business with only lim-
ited facilities and minimal representation in foreign countries.
Others have exten-
sive facilities and personnel in various countries of the world.
Managing these
TABLE 2.1. Sample Pest Analysis
Political Economic Sociocultural Technical
• New state tax policies
for accounting
• New employment
laws for employee
handbook maintenance
• Political instability in a
foreign partner country
• International economic
growth

79. • Changes in interest
rates
• Shift in educational
requirements and
changing career
attitudes
• Population growth rate
• Automated processes
in the industry
• Rate of innovation
• Changes in technology
incentives
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Globalization and Human Resource Management • 39
resources effectively, and integrating their activities to achieve
global advantage,
is a challenge to a company’s leaders and HRM professionals.
Often we hear companies referred to as “multinational” or
“international.”
However, it is important for HRM professionals to understand
the different levels
of participation in international markets. This is especially

80. important because as
a company becomes more involved in international trade,
different types of HRM
challenges, problems, and opportunities arise.
Bartlett and Ghoshal (1991) identified the following four
international organi-
zational models:
• Decentralized federation in which each national unit is
managed as a sepa-
rate entity that seeks to optimize its performance in the local
environment.
(This is the traditional multinational corporation).
• Coordinated federation in which the center develops
sophisticated man-
agement systems enabling it to maintain overall control,
although scope is
given to local management to adopt practices that recognize
local market
conditions.
• Centralized hub in which the focus is on the global market
rather than on
local markets. Such organizations are truly global rather than
multinational.
• Transnational in which the corporation develops multi-
dimensional stra-
tegic capacities directed towards competing globally but also
allows local
responsiveness to market requirements.
Adler (2008) offers another categorization of the four various
levels of inter-

81. national participation from which a company may choose and
includes the fol-
lowing levels of involvement or participation: domestic,
international, transna-
tional, multinational. The four basic types of organizations
differ in the in degree
to which international activities are separated to respond to the
local regions and
integrated to achieve global efficiencies.
Domestic. Most organizations begin by operating within a
domestic market-
place. For example, a business that starts in the U.S.
marketplace must recruit,
hire, train, and compensate their employees who are usually
drawn from the local
labor market. The focus of the selection and training programs
is often on the
employees’ technical competence to perform job-related duties
and to some ex-
tent on interpersonal skills. In addition, because the company is
usually involved
in only one labor market, determining the market rate of pay for
various jobs is
relatively easy.
As the company grows it might choose to build additional
facilities in differ-
ent parts of the country to reduce the costs of transporting the
products over large
distances. In deciding where to locate these facilities, the
company must consider
the attractiveness of the local labor markets. Various parts of
the country may
have different cultures that make those areas more or less
attractive according to

82. the work ethics of the potential employees. Similarly, the
potential employees in
the different areas may vary greatly because of differences in
educational systems.
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40 • RONALD R. SIMS
Finally, local pay rates may differ. However, it is important to
note that in most
instances, companies functioning at the domestic level face an
environment with
very similar political, economic, sociocultural, and
technological situations, al-
though the variation might be observed across states and
geographic areas.
International. As more competitors enter the domestic market,
companies face
the possibility of losing market share; thus they often seek other
markets for their
products. This usually means entering international markets,
initially by exporting
products but ultimately by building production facilities in
other countries. The
international corporation is essentially a domestic firm that
builds on its existing
capabilities to penetrate overseas markets. Companies such as
Procter & Gamble,
Honda and General Electric used this approach to gain access to
Europe—they es-

83. sentially adapted existing products for overseas markets without
changing much
else about their normal operations (Snell & Morris, 2019).
The decision to participate in international competition raises a
host of HRM
issues. All the problems regarding locating facilities are
magnified. For example,
HRM professionals must consider whether a particular location
provides an en-
vironment where human resources can be successfully acquired
and managed.
Global. The global corporation, on the other hand, can be
viewed as a multina-
tional frim that maintains control of its operations worldwide
from the country in
which it is headquartered. Japanese companies, such as NEC
and Matsuhita, tend
to treat the world market as a unified whole and try to combine
their activities in
each country to maximize their efficiencies on a global scale.
These companies
operate much like a domestic firm, except that they view the
whole world as their
marketplace.
Global organizations compete on state-of-the-art, top-quality
products and ser-
vices and do so with the lowest cost possible. Whereas MNCs
attempt to develop
identical products distributed worldwide, global companies
increasingly empha-
size flexibility and mass customization of products to meet the
needs of particular
clients. MNCs are usually driven to locate facilities in a country

84. as a means of
reaching that country’s market or lowering production costs,
and the company
must deal with the differences across the countries. Global
organizations, on the
other hand, choose to locate a facility based on the ability to
effectively, efficient-
ly, and flexibly produce a product or service and attempt to
create synergy through
the cultural differences.
This creates the need for HRM systems that encourage flexible
production
(thus presenting a host of HRM issues). These companies
proactively consider the
sociocultural, political, economic, and technological systems to
determine where
production facilities can be located to provide a competitive
advantage. Global
companies have multiple headquarters spread across the globe,
resulting in less
hierarchically structured organizations that emphasize
decentralized decision
making. This results in the need for HRM systems that recruit,
develop, retain,
and use employees who are competent transnationally.
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Globalization and Human Resource Management • 41
Transnational. Finally, a transnational corporation attempts to

85. achieve the lo-
cal responsiveness of a multinational corporation while also
achieving the effi-
ciencies of a global firm. To balance this “global/local”
dilemma, a transnational
uses a network structure that coordinates specialized facilities
positioned around
the world. More specifically, transnational corporations use
geo-diversity to great
advantage, placing their top executives and core corporate
functions in different
countries to gain a competitive edge through the availability of
talent or capital,
low costs, or proximity to their most important customers. Of
course, it is all
made possible by the Internet, as improved communication
facilitates an inte-
grated global network of operations.
By using this flexible structure, a transnational provides
autonomy to inde-
pendent country operations but brings these separate activities
together into an
integrated whole. For most companies, the transnational form
represents an ideal,
rather than a reality. McDonald’s is an example of a
transnational corporation,
especially with culture-specific food items, like India’s
vegetarian McAloo Tikki,
the McKebab in Israel, or a Hawaiian Deluxe Breakfast
complete with span, rice,
eggs, and hash browns. With over 31,000 restaurants across 119
countries serving
58 million people each day, it makes sense that McDonald’s
overseas revenue
makes up nearly 65 percent of their total revenue, and that they

86. cater McDonalds’
core burger-fries-and-shakes menu to local tastes (Johnson,
2011).
The development of transnationals has led to a fundamental
rethinking about
the nature of a multinational company. Does it have a home
country? What does
headquarters mean? Is it possible to fragment corporate
functions like HRM glob-
ally? To be sure, organizational structure directly affects all
HRM functions from
recruitment through retirement because to be effective, HRM
must be integrated
into the overall strategy of the organization. Indeed, from the
perspective of stra-
tegic management, the fundamental problem is to keep the
strategy, structure, and
HRM dimensions of the organization in direct alignment (See
Briscoe & Schuler,
2012) while being respectful of local country laws or
regulations.
GLOBALIZATION AND IMPLICATIONS
AND IMPACTS FOR HRM IN THE FUTURE
Entry into international markets creates a host of HRM issues,
challenges, prob-
lems, and opportunities that must be addressed by HRM
professionals and other
organizational members if a company is to not only survive but
also thrive in a
global environment. Once the choice has been made to compete
in a global arena,
companies must seek to manage employees who are sent to
foreign countries as

87. well as local employees. And this results in another issue facing
international
organizations, the extent to which their HRM practices should
either ‘converge’
worldwide to be basically the same in each location, or
‘diverge’ to be differenti-
ated in response to local requirements. There is a natural
tendency for managerial
traditions in the parent company to shape to the nature of key
decisions, but there
are strong arguments for giving as much local autonomy as
possible in order to
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42 • RONALD R. SIMS
ensure that local requirements are sufficiently taken into
account. (This is known
as the global/local dilemma) (see Andrews, 2011). Convergence
may be increas-
ing as a result of the following factors:
• The power of markets
• The importance of cost
• Quality and productivity pressures
• The development of like-minded international cadres
• The widespread practice of benchmarking ‘best practices.’
However, before focusing on these challenges it is important for
HRM profes-
sionals to first understand what is meant by international human

88. resources man-
agement (IHRM) and the different levels of participation in
international markets.
This is especially important because as noted previously a
company becomes
more involved in international trade, different types of HRM
issues, challenges,
problems, and opportunities arise.
Broadly defined, global or IHRM is the process of procuring,
allocating, and
effectively utilizing human resources in an international
business. More specifi-
cally, global or international human resource management
(IHRM) is the process
of employing, developing and rewarding people in international
or global organi-
zations. It involves the world-wide management of people, not
just the manage-
ment of expatriates. An international organization or firm is one
in which opera-
tions take place in subsidiaries overseas, which rely on the
business expertise or
manufacturing capacity of the parent company. Such companies
or organizations
bring with them their own management attitudes and business
styles. HRM pro-
fessionals of such organizations cannot afford to ignore the
international influ-
ences on their work.
IHRM involves a number of issues not present when the
activities of the com-
pany or organization are confined to one country. For example,
• The variety of international organizational models that exist

89. • The extent to which HRM policy and practice should vary in
different coun-
tries. (This is also known as the issue of Convergence and
Divergence).
• The problem of managing people in different cultures and
environments.
• The approaches used to select, deploy, develop and reward
expatriates
who could be nationals of the parent company or ‘third-country
nationals’
(TCNs)—nationals of countries other than the parent company
who work
abroad in subsidiaries of that organization.
How Does Globalization Affect HRM?
Globalization has made us a multicultural society which has
implications on
HRM professionals and their function in a company’s host and
other countries.
There are four theoretical frameworks that can help HRM
professionals and other
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Globalization and Human Resource Management • 43
company employees explore the influences on HRM across
international bound-
aries, including: cultural, institutional, universal and

90. contingency perspectives
(White, 2015).
The cultural perspective suggests there are clear cultural
differences between
nationalities and these should be recognized. International
corporations which
accept and recognize these cultural differences in managing
employees through
HRM practices will be successful in their host countries.
The institutional perspective accepts there are differences that
need to be un-
derstood and recognized within societies and these have an
impact on the HRM
practices, but it rejects the concept that certain practices, such
as recruitment and
selection, performance management and reward lead to
improved organizational
performance as these practices may mean different things within
different societ-
ies.
The universal perspective approach claims that certain HRM
practices, such
as performance management, recruitment and selection and
reward lead to higher
organizational performance. It has been suggested that HRM
practices that are
successful in the home country should be adopted into the host
country (March-
ington & Wilkinson, 2012). A criticism of this viewpoint is that
it does not take
into account internal and external factors, such as the
characteristics of the orga-
nization or the culture of its host country (White, 2015).

91. Finally, the contingency perspective depends on both the
internal and external
factors of an organization for the take up of HR practices. The
key features for
HRM are the location of the organization, the product market,
the organizations
life cycle stage and if the organization is privately owned or a
joint venture. Each
of these factors will have an effect on HRM, for example where
the organization
is based will depend on the HR practices and policies it
deploys.
Impacts and Implications on HRM
Given the above one can argue that the impacts and implications
on HRM in
global or international or multinational corporations depends on
the type of orga-
nization, it’s product life cycle and the core belief of its
hierarchy (Marchington
& Wilkinson, 2012). Edwards (2011) takes this view further and
outlines that the
influences are categorized into home country/country of origin
effects, dominance
effects, international integration effects and host country
effects.
The home country/country of origin view supports the enforcing
of headquar-
ter HRM practices from the home country across all countries
where there is a
subsidiary. All countries where there is a subsidiary for the
multinational corpora-
tion will adopt a single approach to HRM practices, such as

92. recruitment and selec-
tion, reward and performance management. Using this model
means the global or
multinational or international company doesn’t take into
account local culture and
practice when implementing HRM practices.
The dominance effect supports a standard approach of HRM
practices across
all countries for the multinational, global or international
corporation as this is
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44 • RONALD R. SIMS
seen to be best practice internationally. Again this doesn’t take
into account local
culture and practices in which the international corporation
operates.
The international integration effect relates to the extent at
which the interna-
tional, global or multinational corporations build closer
relationships across dif-
ferent borders. In some instances, the corporation may move
their headquarters
from their home country to other regional countries, adopting
their exiting HRM
policies while also bringing some best HRM practice from the
home country.

93. The host country effect adopts the HRM practices and policies
of the host
country in which the corporation operates in. This could be due
to it being too
difficult to enforce the home country HRM practices and
policies due to cultural
differences or the practices and policies in place do not need to
be changed.
Globalization is seen to be a complex and controversial subject
with many
supporters and critics. As briefly discussed earlier, the
implications on HRM pro-
fessionals and their functions for international corporations are
dependent on a
variety of factors. Market pressures and local influences, such
as culture, have
strong implications on HRM practices implemented by global
corporations with
research supporting the view of the complexities and different
influences. It can
be argued therefore that there is no one best fit for HRM
practices for all organiza-
tions across the globe, but there are some best fit processes that
can be incorpo-
rated along with the local culture and business practice.
Today’s organizations are becoming more international and
having systems,
policies and process in place to be able to deal with this
changing landscape of
a host companies’ workforce is paramount. A system, for
example, for employ-
ees that supports multiple language and different data formats
will help improve
engagement as employees can manage their own data in their

94. native language.
This also enables organizations to roll out employee self-service
access to other
countries, as well as providing non-host country nationals who
work for the cor-
porations to use the application in their chosen language.
Global HRM is an umbrella term that includes all aspects of an
organization’s
HRM, payroll, and talent management processes operating on a
global scale.
As technological innovations make it easier for organizations to
conduct busi-
ness across the world, global expansion and accompanying
HRM policies and
procedures as noted earlier has become an increasing reality—if
not necessity.
Operating human resources across geographic and cultural
boundaries can often
prove difficult for global organizations. Nonetheless, with the
widespread use of
technology, the ability to communicate with anyone around the
world and access
to new and varied markets, international HRM issues like those
briefly discussed
below are important for HRM professionals to grasp.
Language. As briefly noted earlier, one of the more obvious
effects of work-
force globalization is the need for language services such as
translation. Employ-
ees from foreign countries who speak different languages often
must travel to
meet or communicate with others inside the organization. This
has caused more
companies to hire foreign language translators. Translators help

95. employees from
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Globalization and Human Resource Management • 45
different countries communicate during meetings or at events.
They also help U.S.
employees traveling to foreign countries interact with the local
employees, part-
ners and customers.
Culture. Developing a global organizational culture is much
more complex
than building one domestically. The point of a common culture
is that employ-
ees share norms and values. When a corporation’s employees
come from varying
cultures themselves, they inherently have distinct differences in
their own view
of work, communication and other aspects of the company.
Thus, HRM profes-
sionals must work diligently to train employees on cultural
sensitivity and find
common points shared by employees throughout the
organization. Virtual work
teams often are used to promote cross-cultural teamwork.
Localization. Even while trying to create a global culture, HRM
professionals
often have to emphasize localization in each country. This
correlates with strate-

96. gies used by companies as they enter foreign markets and try to
build good rap-
port with local communities. This means having strong hiring
and training pro-
cesses at national and local levels and compensation and
motivation systems that
fit well with each country of operation.
Compliance with International Laws. One effect of globalization
on HRM
is the need for businesses to understand and apply the laws of
many different
jurisdictions to the particular business. The federal government
sets out a number
of tax and labor laws that businesses operating in the United
States must comply
with, but there may also be local and regional laws that apply to
companies that
operate in different states or different countries.
As companies decide to expand into the global marketplace or
as they hire
employees from diverse geographic and cultural backgrounds,
they may have to
adapt to new labor laws and tax liabilities. Doing business in
Europe, for example,
will require the firm to pay value added tax. Hiring employees
at branch locations
in different locations might change the requirements on
minimum wage, tax al-
lowances or working hours. Also, hiring employees who are
non-naturalized US
citizens might require HRM to apply for work visas and report
economic data to
the federal government. Compliance with international law can
be an issue for

97. companies that have little to no experience in the global
environment, because
these laws tend to be complex and sometimes difficult to
implement. Keeping
well-informed of the legal requirements for the business’s
operations can help al-
leviate some of this complexity. Therefore, understanding a
countries’ laws is vi-
tally essential to the organization because any breach of them
will have a serious
impact not only on the business’s financial well-being but also
on its reputation.
Diversity Recruitment & Cultural Diversity. Globalization
makes for a
larger labor pool from which to choose, but it also increases the
possibility of
language and cultural barriers in the recruitment process. If the
company does
not address such barriers, it can make the recruitment process
increasingly time-
consuming and difficult. HRM professionals must adapt to the
different customs
and cultures when hiring employees in different countries.
Language barriers also
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46 • RONALD R. SIMS
may necessitate hiring bilingual employees and adapting
employee documents,

98. such as employee manuals and training materials, into different
languages.
Globalization also means that companies of all sizes are now
interacting with
customers and stakeholders from diverse cultures, languages
and social back-
grounds. In response, many HRM professionals seek to hire
employees from
equally diverse backgrounds. Companies engaging in this
diversity recruitment
recognize the value of having people on staff that their
customers can relate to,
and they know that having a team of diverse people contributes
to the range of
ideas and influences within the organization.
Successful diversity recruitment in international HRM is
dependent upon un-
derstanding and maintaining cultural diversity. Working with
people from differ-
ent locations or from different cultural backgrounds means
adapting the compa-
ny’s work style to new ideas, new ways of communicating and
unfamiliar social
practices. If the company hires an employee from England, for
example, the em-
ployee might have different ideas about how to manage
employees or on how to
run technology processes based on their own experiences back
home. Being open
to new work styles and cultural differences is the hallmark of
cultural diversity
in HRM.
Benefits and Compensation. Benefits and compensation are the