chapter twelve

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2. (c) 2008 by Nelson, a division of Thomson Canada Limited.. Chapter Learning Objectives. After reading this chapter, you should be able to:discuss international business ethics and HRMdescribe modes of operation other than wholly owned subsidiaries and the required IHRM activitiesoutline ownership issues relating to IHRM requirements of organizations other than the large multinational, such as: - family-owned firms- nongovernment organizations (NGOs).

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1. 1 (c) 2008 by Nelson, a division of Thomson Canada Limited. Chapter Twelve IHRM Trends: Complexity, Challenges and Choices in the Future

2. 2 (c) 2008 by Nelson, a division of Thomson Canada Limited. Chapter Learning Objectives After reading this chapter, you should be able to: discuss international business ethics and HRM describe modes of operation other than wholly owned subsidiaries and the required IHRM activities outline ownership issues relating to IHRM requirements of organizations other than the large multinational, such as: - family-owned firms - nongovernment organizations (NGOs)

3. 3 (c) 2008 by Nelson, a division of Thomson Canada Limited. Chapter Learning Objectives identify safety and security issues and the assessment and planning activities required understand that research is still required to unravel the intricacies and interrelationships among the IHRM function and activities, firm internationalization, and strategic directions and goals

4. 4 (c) 2008 by Nelson, a division of Thomson Canada Limited. Terms family-owned firms NGOs SMEs strategic IHRM

5. 5 (c) 2008 by Nelson, a division of Thomson Canada Limited. OpeningVignette Failed Terror Strike Targeted Canadians develop policies and practices ensuring the safety and security of international employees

6. 6 (c) 2008 by Nelson, a division of Thomson Canada Limited. “General Affairs” Aspect of IHRM the expectation that the human resource function will be the first line of defense in dealing with unpredictable and emergent issues

7. 7 (c) 2008 by Nelson, a division of Thomson Canada Limited. Returning to Topics of Strategic HRM in MNEs (Figure 12.1)

8. 8 (c) 2008 by Nelson, a division of Thomson Canada Limited. External Factors: International Business Ethics and HRM Discuss: Should MNEs apply their own values everywhere they do business, irrespective of the cultural context and standard of local practices? (i.e. bribery, child labour, unsafe workplace). Whose standards should prevail? Those of the MNE’s parent country or the host country?

9. 9 (c) 2008 by Nelson, a division of Thomson Canada Limited. Ethical Relativist there are no universal rights and wrongs depends on a particular culture’s values and beliefs

10. 10 (c) 2008 by Nelson, a division of Thomson Canada Limited. Ethical Absolutist apply home country values and practices regardless of what the host country does or believes in

11. 11 (c) 2008 by Nelson, a division of Thomson Canada Limited. Ethical Universalist fundamental principles of right and wrong transcend cultural boundaries

12. 12 (c) 2008 by Nelson, a division of Thomson Canada Limited. Ethical Universalist United Nations Declaration of Human Rights Guidelines for Multinational Enterprises, Organization of Economic Cooperation and Development (OECD)

13. 13 (c) 2008 by Nelson, a division of Thomson Canada Limited. Translating Ethical Principles instituting a strategic plan for legal compliance international accords regulations

14. 14 (c) 2008 by Nelson, a division of Thomson Canada Limited. Translating Ethical Principles education and training programs - ethics - development of negotiation skills to handle problem situations - difference between corrupt bribery payments, gifts, and allowable facilitation payments

15. 15 (c) 2008 by Nelson, a division of Thomson Canada Limited. Bribery a practice that involves payment or gifts to gain an unfair advantage

16. 16 (c) 2008 by Nelson, a division of Thomson Canada Limited. New Global Developments on the Criminalization of Bribery bribery undermines equity, efficiency and integrity in the public service undercuts public confidence in markets and aid programs adds to the cost of products affects the safety and economic well-being of the general public

17. 17 (c) 2008 by Nelson, a division of Thomson Canada Limited. Criminalization of Bribery (UN) Declaration Against Corruption and Bribery in International Commercial Transactions Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Convention)

18. 18 (c) 2008 by Nelson, a division of Thomson Canada Limited. Criminalization of Bribery (Canada) Corruption of Foreign Public Officials Act

19. 19 (c) 2008 by Nelson, a division of Thomson Canada Limited. Transparency International Corruption Perceptions Index 2006 (Table 12.1)

20. 20 (c) 2008 by Nelson, a division of Thomson Canada Limited. Challenges for the MNEs HR Function Ethical issues are complex due to different social, economic, political, cultural, and legal environments can not be left up to individual employees - the pressures of operating in a foreign environment - internal inconsistencies affecting total global performance.

21. 21 (c) 2008 by Nelson, a division of Thomson Canada Limited. Challenges for the MNEs HR Function Integrity of International Assignee Selection ability to manage with integrity should be an assess job-relevant criterion Performance appraisals not be placed under unreasonable pressure feedback and reinforcement

22. 22 (c) 2008 by Nelson, a division of Thomson Canada Limited. Challenges for the MNEs HR Function Integrity of International Assignee Pre-departure training or orientation ethics global codes of conduct moral imperatives transcend national and cultural boundaries

23. 23 (c) 2008 by Nelson, a division of Thomson Canada Limited. Internal Factors: Mode of Operation and IHRM key role is the transfer of technology and systems, inculcation of company culture, and acting as a screening process short-term staff assignments to deliver training in foreign locations

24. 24 (c) 2008 by Nelson, a division of Thomson Canada Limited. Family-Owned Firms human resource planning and succession planning to top management positions in family-owned firms is a critical factor in the organizations demise or take-over.

25. 25 (c) 2008 by Nelson, a division of Thomson Canada Limited. Family-Owned Firms handing over control can be fraught with immediate and extended family - dynamic negotiations - conflicts of interests - sibling rivalries - family favoritism

26. 26 (c) 2008 by Nelson, a division of Thomson Canada Limited.  Nongovernment  Organizations (NGOs) utilize variations of structural forms and control mechanisms embrace ideals such as being values-driven, charitable and philanthropic as opposed  to the values of efficiency and effectiveness  of profit orientated MNEs. often located in poor or hostile environments exposing staff to physical security and safety risks complex ethical challenges

27. 27 (c) 2008 by Nelson, a division of Thomson Canada Limited. External Factors: Challenges in an Uncertain World Safety, Security and Counterterrorism Examples 9/11, terrorism kidnapping of executives natural disaster impacting a key facility airline or private aircraft disaster pandemics, SARs, avian flu

28. 28 (c) 2008 by Nelson, a division of Thomson Canada Limited. Safety, Security and Counterterrorism Risk management categories associated with natural disaster protocols emergency and disaster preparedness plans for MNE plant and facilities workplace violence policies industrial theft and sabotage protocols enhance in-house security

29. 29 (c) 2008 by Nelson, a division of Thomson Canada Limited. Management of Occupational Health and Safety IHRM legal compliance and training issues related to safety in the workplace. expanded national and international regulations related to workplace safety professional standards of practice reporting mechanisms risk management practices

30. 30 (c) 2008 by Nelson, a division of Thomson Canada Limited. Corporate Risk Assessment Categories (IHRM Notebook 12.1) In-facility emergency and disaster preparedness In-facility security Industrial espionage, theft, and sabotage Cyberterroism Out-of-facility fire and travel risks

31. 31 (c) 2008 by Nelson, a division of Thomson Canada Limited. In-Facility Emergency and Disaster Preparedness compliance with local safety laws and standards creating a command center and triage area protocols for transport-evacuation & systematic location of employees liaison with public sector emergency workers and media relations.

32. 32 (c) 2008 by Nelson, a division of Thomson Canada Limited. In-Facility Security perimeter security search protocols internal search protocols bomb threat procedures risk control for violence protection and lighting in parking areas the use of cameras in the workplace.

33. 33 (c) 2008 by Nelson, a division of Thomson Canada Limited. Industrial Espionage, Theft and Sabotage activities to secure internal communications open records protection employee privacy regulations clearly defined physical inspections and search processes

34. 34 (c) 2008 by Nelson, a division of Thomson Canada Limited. Cyber-terrorism Hardware, software and human systems (and back up and multiple independent operations systems) to deal with hacking information theft internal sabotage the sabotage of software systems

35. 35 (c) 2008 by Nelson, a division of Thomson Canada Limited. Out-of-Facility Fire and Travel Risks portable five minute air packs travel policies (i.e. employees staying in hotel rooms below the 7th floor, vary airline flights) hotel evacuation training

36. 36 (c) 2008 by Nelson, a division of Thomson Canada Limited. Risk Assessment- Terrorist Threats IHRM assess the potential risk from terrorist threats at three levels of analysis primary, individual person and firm micro, regions and industries, levels in value chains macro, global environment

37. 37 (c) 2008 by Nelson, a division of Thomson Canada Limited. Risk Analysis Dimensions external environmental (geographic region of operation) internal company (industry, firm media profile, national affiliation associated with the company)

38. 38 (c) 2008 by Nelson, a division of Thomson Canada Limited. Risk Analysis low risk companies in low risk environments do not need to invest as heavily in security systems and protocols

39. 39 (c) 2008 by Nelson, a division of Thomson Canada Limited. Risk Analysis high risk companies in low risk environments should follow security strategies that focus on hardening individual sites

40. 40 (c) 2008 by Nelson, a division of Thomson Canada Limited. Risk Analysis low risk companies in high risk environments can follow security strategies that disperse activities across the region and build redundant infrastructure

41. 41 (c) 2008 by Nelson, a division of Thomson Canada Limited. Risk Analysis high risk companies in high risk environments must invest elaborate risk management strategies

42. 42 (c) 2008 by Nelson, a division of Thomson Canada Limited. Discussion Questions Identify a number of HRM problems that typically arise with expatriate assignments. In what ways might the core ethical values and guidelines identified in this chapter apply to them? Why is management succession frequently an issue for family-owned firms? Beyond checklists and systemic analysis, what actions can MNEs take to reduce risks related to terrorism? What roles can HRM take in these processes?

43. 43 (c) 2008 by Nelson, a division of Thomson Canada Limited. Case: Too Little, Too Late? Siemens Belatedly Wakes Up to Reputation Risk Imagine you are in your first serious management job. How would you react when being pressured by your company to win an international multi-million dollar order knowing that you can only get the deal through bribing local authorities (your superiors would provide you with the necessary financial and non-financial resources to support your efforts)? Why would you have that reaction? Be honest with yourself! Browse Siemens’ homepage. Where and how does Siemens illustrate and state its stance against bribery and corruption?

44. 44 (c) 2008 by Nelson, a division of Thomson Canada Limited. Case: Too Little, Too Late? Siemens Belatedly Wakes Up to Reputation Risk 3. In groups discuss recommendations for Siemens to change its organizational culture in the area of anti-corruption. What has Siemens done so far? 4. Where does Siemens stand today in its fight against bribery and corruption? What has changed since December 2006 in terms of Siemens’ personnel politics at a senior management level? What have been the consequences of these HR actions for Siemens’ fight against bribery and corruption?

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