International Human Resource Management

1. International Human Resource Management

2. Chapter Vignette Motorola and the Secrets of the Orient Factories in China, Malaysia and Singapore Asian managers utilized Cultural sensitivity

3. Home Country Approach Host Country Approach Regional Approach Global Approach Selection Criteria Past Practices and Criteria Technical Expertise Managerial Expertise Recruitment Philosophy and Approach

4. Technical and Managerial Skills At various levels different skills are needed Interpersonal skills, intelligence, emotional stability Family Support Motives and Desire Social Skills Language Skills Characteristics of an Effective International Executive

5. Characteristics of an Effective International Executive (cont’d) Diplomatic Skills How to deal with host government Representing the home country Maturity and Stability Family Factors Locally contingent factors Older People, Females

6. Three Options Expatriate Manager Host Country National Manager Third Country National Manager Host Country or Third Country Staffing Criteria Same as expatriate Managers Additional Criteria Language of home country Cultural norms of host country Personnel Selection Options

7. High Tech or Product Orientation Growth and Internationalization (market orientation) Multinationalization and Price Competition Globalization Product Life Cycle and HRM

8. High Tech or Product Orientation New and Unique Products High Price Relative to Direct Costs Dominance of Product Development Function Home Market Monopoly Power Buyers (foreign) Absorb the Cost of Mismatch Customer Must Speak the language of the MNC Customer Must Accept Managerial Practices of MNC Ethnocentric: Personnel Selection- Ability to do the Job Product Life Cycle and HRM

9. Growth and Internationalization (Market Orientation) Competition -> Expansion to New Markets Standardization -> Price Competition Begins Short Product Life Cycle Local Responsiveness Cultural Adaptability and Sensitivity Products: Culturally Appropriate Selection: Technical Competence, Expatriates and Locals, Language and Cultural Skills At the Headquarters: Foreign Skills are Not Valued Foreign National Do Not Reach to High Levels at HQ Product Life Cycle and HRM

10. Multinationalization (Price Competition) Undifferentiated Products Price Competition Integration of Worldwide Operations: Standardization of Products & Centralization Reduced Importance of Cultural Factors in Products Personnel Selection - Best People, Other Nationals Integration by Creating or Assuming Similarities: Generic Products and Services, Economies of Scale Home Country Language Home Country Values and Culture Emphasize Corporate Culture Product Life Cycle and HRM

11. Continue– Integration by Creating or Assuming Similarities. Ignore Cultural Differences Reduce the Impact of Cultural Factors Decreasing Importance of Market Segmentation Based on Cultural Considerations. Home Country or Third Country Managers Who Assimilate Into HQ’s Corporate Culture Advance. Product Life Cycle and HRM

12. Globalization Top Quality, Least Cost, Differentiated Products Attention to Local Tastes of Global Customers Global Integration-National Responsiveness Home Country Market is Not Dominant National Boundaries are Less Important Cultural Diversity Within the Firm Market Segmentation Based on Culture Cultural Sensitivity and Language Skills Product Life Cycle and HRM

13. Pre Departure Previous Foreign Assignments Training: Cross-Cultural, International Management Pre-departure Expectations After Arrival at Host Country Work Related Skills: Technical, Functional, Language Individual Attributes: Social, Diplomatic, Maturity Non Work factors: Family, Cultural Distance, Locally Contingent Expatriate Cultural Adjustment

14. Aims: To Reduce Cultural Biases and Develop “Global” Perspective To Increase Awareness about Diversity of Managerial Practices To improve Understanding of Business and Management Philosophies and Practices Around the World. International and Intercultural Training

15. Types: Specific , e.g. Japanese Management General or Regional, e.g. Southeast Asian Location: In-house Educational and Training Institutions Methods: Documentary Business Games Role Playing Scenarios International Management Education and Training

16. Useful for All MNC Managers Operating Abroad: Expatriates Host Country Nationals Third Country Nationals Intend to Develop: Self Awareness: Recognition of personal assumptions, values, needs, etc. Cultural Readings: To understand inherent logic in cultural norms Multiple Perspectives: The ability to suspend judgement about other cultures and appreciate others perspective Intercultural Training

17. Intercultural Communication Send and Receive messages accurately in different cultures Cultural Flexibility Adjust and change expectations and plans in accordance with host country cultural requirements Cultural Resilience: to handle cultural shock Skills in Building Interpersonal Relationships Intercultural facilitation skills Manage cultural differences constructively. Intercultural Training

18. Specific Intercultural Training Generalized International Management Education Introduction and Orientation to the Firm and Corporate Culture: - Purpose, Mission, Policies, etc. - Socialization and Indoctrination Formal e.g. promotion, salary increase Informal e.g. Superior-Sub Relationship - Employees Response / Managers Favoring Own Culture / Host Country & the MNC Cultural Differences Training Host-Country and Third-Country Nationals

19. Foreign Subsidiaries Need Local Employees Technology Transfer- Training Locals - Competition for Skilled Labor: - Observe Cultural Factors e.g. Ethnic Problems (e.g. Moslem-Hindu problem) - Modify Methods for LDC - Cultural Idiosyncrasies of Training, e.g. It may not be appropriate to admit a gap in knowledge. - American Active Learning (by participation) is Not Favored Universally Training Host-Country and Non-Managerial Employees

20. Equitable and Adequate Compensation Package Consider the Difference in Cost of Living, Taxes Exchange Fluctuations, etc. Should Result in no Significant Gain or Loss Comparable to Other MNC Compensation Packages Equitable Compared to Domestic Compensation Allow to Transfer Employees Between Subsidiaries Compensation

21. Compensation Methods - The Headquarters Scale plus Affiliate Differential - The Citizenship Scale - The Global Scale Compensation

22. Cost of Living Allowance Tax Equalization Children’s Education, Home Leave, Medical Inflation and Currency Devaluation Expenses for Professional Obligations Hardship Bonus for Working Abroad Headquarter and Affiliate Differential Scale

23. Citizenship Scale Compensate Third Country Nationals The Manager’s Home Country + Affiliate Differential - Global Scale - Same salary for the same job + Affiliate Differential - Difficulties Hard to Construct Technical Aspect may be Measurable and Universal, Role Expectations are Not. Headquarter and Affiliate Differential Scale

24. Host Country Employees Compensation - Pay More than Local to Attract the Best - Upward Pressure on Local Wages - Problems: Differences with Home Country Managers Headquarter and Affiliate Differential Scale