Managing differences is the central challenge in HR Global Strategy. The CAGE Distance Framework identifies Cultural, Administrative, Geographic and Economic differences or distances between countries that companies should address when defining international HR strategies. However, understanding differences is not a sufficient basis for setting global strategy. Discover as well what are our globalization options and strategies, and how leading organizations are doing to "globally localice" the HR function.

1. Alfredo Amores
Talent Management & Training International HR Executive
es.linkedin.com/in/alfredoamores - @AlfredoAmores
Managing Differences:
The Central Challenge in
HR Global Strategy
Operational Excellence in Human Resources Summit, Barcelona 2015

2. “Managing Differences: The Central Challenge in HR Global Strategy” Alfredo AmoresOperational Excellence in Human Resources Summit, Barcelona 2015
Understanding how
global we really are

3. “Managing Differences: The Central Challenge in HR Global Strategy” Alfredo AmoresOperational Excellence in Human Resources Summit, Barcelona 2015
The global reality check
25%
7%
10%
20%
20%
35%
3%
17%
1%
21%
15%
2%
2%
17%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Bank deposits
Charity
Direct investment
Equity investment
Exports
Government debt
Inmigrants
Internet traffic
Mail
News media
Patents
Telephone calls
University students
Venture capital
internationalization levels
(*) World 3.0: Global Prosperity and How to
Achieve it, Pankaj Ghemawat 2011

4. Differences matter
“Managing Differences: The Central Challenge in HR Global Strategy” Alfredo AmoresOperational Excellence in Human Resources Summit, Barcelona 2015

5. “Managing Differences: The Central Challenge in HR Global Strategy” Alfredo AmoresOperational Excellence in Human Resources Summit, Barcelona 2015
Cultural Administrative
Economic Geographic
CAGE distance framework (*)
(*) Prof. Pankaj Ghemawat - IESE
 Language
 Etnicity
 Religion
 Work systems
 Tradition
 Values, social norms,
and dispositions
 Colonial ties
 Trade agreements
 Currency
 Legal system
 Government policies
 Political hostility
 Visa and work permit
requirements
 Corruption
 Physical distance
 Common land border
 Time zones
 Climate
 Landlockedness
 Transportation
 Communication
 Per capita income
 Cost of labor
 Avaliability of human
resources
 Organizational
capabilities
 Economic size

6. C A
E G
Culture differences matter in HR
“Managing Differences: The Central Challenge in HR Global Strategy” Alfredo AmoresOperational Excellence in Human Resources Summit, Barcelona 2015
Language
Diversity
Employee selection
(Give more emphasis
to social class, or to education)
Evaluations
(Focus on compliance,
or on performance)
Compensation
(Wage differences between managers
and workers are larger or shorter)
Leadership
(More authoritarian,
or more participative)
Motivation
(Based on that subordinates
dislike work: more coercive,
or more reward-based)
Organizations
(More hierarchical and regulated,
or more flat and flexible)
Change management
(Tell subordinates what to do,
or explain the reasons for change
and involve employees)Management by objectives
(Short-term oriented, or more longterm oriented;
individual contributions, or group contribution)

7. Administrative differences matter in HR
C A
E G
“Managing Differences: The Central Challenge in HR Global Strategy” Alfredo AmoresOperational Excellence in Human Resources Summit, Barcelona 2015
Labor union power
Protection of workers during
collective disputes
Social security benefits
Employment contracts
Diversity and inclusion
Labor relations
Personnel administrationTaxes
Payroll
Expatriates
Health & Safety
Collective agreements
Outsourcing regulation
Employee classification
Schedules
Holidays
Currency
Subsidies
Visa and work
permit requirements

8. Geographic differences matter in HR
C A
E G
“Managing Differences: The Central Challenge in HR Global Strategy” Alfredo AmoresOperational Excellence in Human Resources Summit, Barcelona 2015
Physical distance
Where to localize HR people
Remoteness
Time zones
Communications Transportation
Size of the country
Climate Diseases

9. Economic differences matter in HR
C A
E G
“Managing Differences: The Central Challenge in HR Global Strategy” Alfredo AmoresOperational Excellence in Human Resources Summit, Barcelona 2015
Labor costs
Avaliability of qualified
human resources
Standard of living
Per capita income
Organizational capabilities
HR budget
Suppliers of HR services
Access to internet
Market competitiveness
(compensation)
Minimun wage Subsidies

10. Strategies for
dealing with
differences
“Managing Differences: The Central Challenge in HR Global Strategy” Alfredo AmoresOperational Excellence in Human Resources Summit, Barcelona 2015

11. “Managing Differences: The Central Challenge in HR Global Strategy” Alfredo AmoresOperational Excellence in Human Resources Summit, Barcelona 2015
What are our globalization options?
Adaptation (to the differences of
the countries)… to achieve local
responsiveness
Aggregation (exploitation of
similarities)… to achieve greater
economies of scale
Arbitrage (exploitation of
differences as opportunities)… to
achieve absolute economies
Cultural: locate the corporate university facilities in Bologna
Administrative: locate global payroll department where tax and
labor laws are more advantageous
Geographic: move the workplace to other geography in order to
“get rid of” staff that is no longer valid for the new challenges
Economic: locate global HR information system department to
access highly skilled workers at lower cost
Cultural: translate elearning trainings to “International Spanish” for
all Spanish speaking countries
Administrative: manage expatriates globally
Geographic: locate training facilities where there can be more
attendees
Economic: subsidize the use of a common HR information system
in poorer countries
Cultural: translate elearning trainings to local languages
Administrative: make payrolls locally
Geographic: provide labor advice locally
Economic: adapt compensation policies according to local market
competitiveness

12. Case Study
“Managing Global
Training Programs”
“Managing Differences: The Central Challenge in HR Global Strategy” Alfredo AmoresOperational Excellence in Human Resources Summit, Barcelona 2015

13. “Managing Differences: The Central Challenge in HR Global Strategy” Alfredo AmoresOperational Excellence in Human Resources Summit, Barcelona 2015
Managing Global Training Programs
Adaptation (to the
differences of the countries)…
to achieve local
responsiveness
Aggregation (exploitation
of similarities)… to achieve
greater economies of scale
Arbitrage (exploitation of
differences as
opportunities)… to achieve
absolute economies
Cultural Administrative
Economic Geographic
 Translation to languages
(adaptation or aggregation)
 Cultural adaptation or
aggregation
 Work systems adaptation or
aggregation
 Change management
 Use prestigious providers
 User friendly tools
 Competences 80% common
 Legal, regulatory and
technical adaptation
 Calendar adaptation
 Easy to implement training
solutions
 Build training contents in a
modular way
 Centralization or support in
the course management
 Local or regional trainers
homologated
 Global training providers
 Training contents 80% global
 Schedules adaptation or
aggregation
 Locate training venues in
“close in travel time” places
 Elearning, webinars, and 2.0
communities ox expertise
 Previuos leveling courses
 Move trainers
 Negotiate fees globally
 Subsidize the cost of the
training
 Provide training facilities
 Support in the course
organization
 Outsourcing to cheaper
countries the development of
elearning contents, call
centers and other
administrative tasks

14. How leading
organizations are doing
to "globally localice" the
HR function
“Managing Differences: The Central Challenge in HR Global Strategy” Alfredo AmoresOperational Excellence in Human Resources Summit, Barcelona 2015

15. A distributed form of HR is possible
(*) High-Impact HR in a
Globally Local World,
Bersin by Deloitte 2013
Expert,
specialized HR
professionals
located CLOSE to
the business
DISTRIBUTED HR
program design
and delivery, to
be tailored
locally, by local
HR people with
central support
AGILE and
ALIGNED HR
operations, with
optimized HR
processes, and
measurement of
utilization and
ajustment to
local needs
Evidence based
practice and
DATA-DRIVEN
decision making
COMMUNITIES of
HR expertise in
order to work
collaborately to
provide
standards and
scalable high-
value processes
Culture of
EMPOWERMENT in
the HR team,
with authority to
“call the shots”
BUSINESS-
DRIVEN HR
leaders, that
understand the
business, hold
accountable, and
measure impact
& effectiveness
HR teams
coordinated
through COMMON
HR platforms
and standards,
that can include
local or cultural
needs
“Managing Differences: The Central Challenge in HR Global Strategy” Alfredo AmoresOperational Excellence in Human Resources Summit, Barcelona 2015

16. Managing Differences: The Central Challenge in HR
Global Strategy
Alfredo Amores. Talent Management & Training International HR Executive
es.linkedin.com/in/alfredoamores - @AlfredoAmores
Operational Excellence in Human Resources Summit, Barcelona 2015
Thanks for letting me
share
“Knowledge is the only resource that increases with use”
Probst, Raub & Romhardt, 1999