Globalization and advances in technology have increased the need for companies to operate internationally and manage a global workforce. However, intercountry differences across many factors like culture, economics, labor costs, and industrial relations present significant challenges to human resource management practices. Cultural factors like power distance, individualism, and concepts of time vary widely between countries. Economic systems, labor costs, and the power of labor unions also differ dramatically in different parts of the world. Effective international HR requires understanding these differences and adapting practices accordingly instead of exporting domestic biases globally.

1. Intercountry Differences
and HRM
Deanne Mitzi A. Somollo

2. Globalization and the Destruction of
Time and Space
• The rapid growth of global business
started with the emergence of the
Industrial Revolution.
• Availability of Transportation (Rail roads
and Steam Ships) allowed raw
materials to be transported from one
area to another in bulk. Finished
product was also transported through
these means.

3. • As technology advanced further
so did business.
• The pioneer company that posited
the idea of “going global” was the
Ford Motor Company.
• The idea was mainly to move
from a regional concentration
(America) to a global one.

4. • In the 21st century, technology has taken
global HRM through leaps and bounds.
• There is a rising trend of the use of
teleconferencing in meetings, e-mailing of
resumes, dot. Com job hunting and the
like.
• Global companies (even companies that
are just starting out) must deal with the
“McDonaldization” of society. –That is
looking at the world through a post modern
lens.

5. Human Resource and International
Challenge
Perceived global pressures of international
companies:
Deployment
Knowledge and Innovation Dissemination
Identifying and Developing Talent on the
Global Basis

6. How intercountry
differences affect HRM

7. Cultural Factors
• Wide ranging differences from country to
country require corresponding differences in
HR practices among a company.
• It is wise for an HR Director/Administrator to
learn about the culture of employees of the
company particularly if the work force is very
diverse.

8. Cultural Factors. . .continued
A study was conducted by Professor Geert
Hofstede and identified five major
international cultural differences.
1. Power Distance- how less powerful
members of the workforce accept the
unequal distribution of power (top power
distance countries- Malaysia, Guatemala,
Philippines; lowest Austria, Denmark and
Israel)
2. Masculinity versus Femininity- how society
values assertiveness versus being caring (
Most Masculine cultures-Japan, Austria and

9. Cultural Factors. . .continued
3. Uncertainty Avoidance- ability of a culture
to be “flexible”(Greece, Portugal, Belgium
and Japan)
4. Individualism- extent to which people are
allowed to “do their own thing” (Individualist-
United States and other English Speaking
countries)
5. Long term versus short term orientation-how
a culture programs people to wait for
gratification (Long- term-Taiwan, Hong
Kong, Nigeria, Pakistan, Philippines)

10. Cultural Factors. . .a brief
frameworkAccording to the Wayne Cascio, Managing Human Resources,
there are 10 brief point of cultural variables that have a
profound effect on HR.
These are:
1. Sense of Self and
Space
2. Dress and Appearance
3. Food and Feeding
Habits
4. Communication and
Language
5. Time and Time
Consciousness
6. Relationships
8.Beliefs and Attitudes
9.Work motivation and
Practices
10.Mental Processes
and Learning

11. Cultural Factors. . .examples
For the Filipinos, it may be okay to come to an
appointment late but for Americans, it is a big
no.
For the Japanese, only men can handle higher
level management, but in Sweden there is
equal opportunity for people (regardless of
sex) to advance in management.
For the Chinese it is insulting to stick your
chopsticks upright in rice bowl, For
Australians proper cutlery must be used in
eating while for Filipinos, one can use hands

13. Cultural Factors. . .How to
avoid conflict• Conduct Diversity Training
• Be genuinely interested in the culture of
other people
• Learn the culture of your employees
• Create a responsive feedback mechanism
for employees
• Treat situations like racist comments and
sexist attitude seriously

14. Economic Factors
• Differences in economic systems
(due to difference in beliefs) also
translate into intercountry differences
in HR practices.

15. Economic Factors
• Countries to the right of the political
spectrum (Conservative countries,
Nationalist countries) view profit as one of
the most important goals.
• Countries to the left of the political
spectrum (Liberal Countries, Socialist
countries, Communist countries have
varied HR systems.) Liberal or free
enterprise countries tend to favor
productivity, efficient workers and staff
cutting where market forces dictate but

16. Economic Factors…
According to the 2014 Index of Economic
Freedom the following countries have the
most economic freedom:RANK COUNTRY OVERALL CHANGE RANK COUNTRY
OVER
ALL
CHANGE
1 Hong Kong 90.1 +0.8 4 Switzerland 81.6 +0.6
2 Singapore 89.4 +1.4 5 New Zealand 81.2 -0.2
3 Australia 82.0 -0.6 6 Canada 80.2 +0.8

17. Economic Factors…
While the following countries have the least
economic freedom:
RANK COUNTRY OVERALL CHANGE
173 Iran 40.3 -2.9
174 Eritrea 38.5 +2.2
175 Venezuela 36.3 +0.2
176 Zimbabwe 35.5 +6.9
177 Cuba 28.7 +0.2
178 North Korea 1.0 -0.5

18. Labor Cost Factors
• Labor cost is the overall costs to a company
associated with one employee, including wages,
benefits, taxes and insurance.
• Recruiters and human resources managers have
to take labor costs into account in every aspect of
their jobs.
• How much the department or hiring manager
can pay for an employee will inform everything
from the job description, the job title, the way the
job is marketed to applicants, the type of
candidates the recruiter can seek out and the
offers they can make to those candidates.
• Labor costs are generally the highest
expenditure for most businesses, as they
incorporate the sum total of all human related work
needed for company operations.

19. Labor Cost Factors. . .the
elements
• Salary
• Benefits
• Administrative Costs

20. Labor Cost Factors. . .Examples
1. Madagascar ($0.18 per hour)
2. Bangladesh ($0.23 per hour)
3. Pakistan and Ghana ($0.32 per hour)
4. Vietnam ($0.39 per hour)
5. India ($ 0.48 per hour)

21. Industrial Relations Factor
• Industrial relations refer specifically to
the relationship between the worker, the
union and the employer.
• The differences are dramatic and affects
HR practices tremendously

22. Industrial Relations Factor. . .
worker Labor Union Employer
HR PRACTICES
STATE POLICIES

23. Industrial Relations Factor. . .
The following are some of the world’s most
powerful labor unions:
1. All-China Federation of Trade Unions
(ACFTU)
2. Congress of South African Trade Unions
(COSATU)
3. General Confederation of Labor (CGT)-
France
4. IG Metall- Germany
5. Tunisian General Labor Union (UGTT)

24. The banes and boons of
International HR
International HR, according to Cascio 2010,
is a subject worthy of attention because of
two things:
1. Scope
2. Heightened Risk Exposure

25. On a final note. . .
According to Cascio 2010 and Dessler 2007,
companies that look to take advantage of
the international market must:
Not export headquarters-country bias
Think in global terms
Recognize that no country has all the
answers

26. References
Dessler, Gary Human Resource Management
2007
Cascio, Wayne Managing Human Resources
www.wikipedia.com
www.heritage.com
www.foreignpolicy.com
www.recruiter.com