(Corporate Globalization)Human Resources Management Chapter 5, 6
HRM -- Defined • Labour is the most important ’factor of production’ and is a major component of every ’business plan’. • It involves all activities needed to obtain, train, and retain qualified workers. • Ex’s) ?
HRM - Domestic vs. International • A variety of reasons why HRM differences exist at home and abroad: • Global Labour Markets (costs/wages, level of education, type of worker). • Worker Mobility (physical, economic, legal, cultural) • Managerial Practices (differ greatly b/w countries and cultures) • Global vs. National Orientation • Control (Greater the distance, less control over workers/mangers)
The Labour Market • Host-Country Nationals (locals): are natives of the country in which they work. • Expatriates: are people who live and work outside their native countries. • Parent (Home) Country Nationals: are expatriates who come from the country where the Parent Company is located. • Third-Country Nationals: ‘expats’ who originate from a different country than the Parent company.
The Labour Market • Companies must weigh the pros and cons of hiring each type of worker: • Advantages of Local Worker: 1) culturally sensitive, 2) easy to find, 3) knowledge of local market. • Disadvantages: 1) May not possess necessary skills and knowledge of company, product, and operations. • Advantages Parent-Country Nationals: 1) knowledge and skills, 2) company orientation, 3) loyalty/motivation? • Disadvantages: 1) Lack language and cultural skills, 2) often more costly, 3) local laws could restrict employment
HRM - Approaches • Many factors determine the approach a company takes with respect to human resources management: • Governmental Regulations • Size of Business • Business Structure • Business Strategy • Attitudes and Staffing Policy
HRM –Ethnocentric Approach (pg 151) • Uses natives of the parent country, for all major business positions at home and abroad. • Expansion to a 3rd world country brings experience, expertise of technology. • Parent-Country Nationals train and develop local workers. • Local morale towards company low b/c no opportunity for upper management positions.
HRM –Polycentric Approach (pg 151) • Natives of host country manage operations within their country. • Rarely advance to parent company headquarters.Why? • + :1)knowledge of country/market is great, 2) cheaper, 3) availability • Why would this approach be politically beneficial? • - :1) Cultural gaps b/w headquarters and subsidiary managers, 2) Headquarter managers gain little international experience, 3) promotion only within subsidiary/parent companies
HRM –Geocentric Approach (pg 151) • Uses best available managers regardless of national origins. • Develops international managers while reducing national biases. • Why would political conflict within the host country exist with this approach? • This approach is expensive: • must train employees, • relocation costs, • greater complexities of global management.
Selecting and Training Staff Key areas to cover when staffing company: • Job Assignments • Qualifications • Technical Abilities • Personality Traits • Environmental Factors • Performance Standards • Knowledge and Skills • Experience Requirements Job Description: a document that includes job identification, statement, duties, responsibilities and requirements.
Selecting Qualified Employees • High ranking positions, company may higher specialized recruitment firm known as headhunters. • Ex) IBM hired two firms for CEO. • There are 3 major characteristics a company is concerned about: • Competence • Adaptability • Personality
Classroom Assigned Work • Compare two of the HRM approaches and form logical arguments supporting one(1) approach over the other for your ISP business? • Continue to Work on your ISP! “I just ate my crayon”!
Maximization of Human Resources • Employees daily actions make or break a company both domestically and internationally. • Employers must train and develop employees to maximize potential. • Professional development. • Major business expense. • Traditionally, US companies did not spend much time or money on training/development…suffered as a result! Changing ways now!!
Why Do Global Employees Fail? • Employee unable to adjust to environment. • Spouse or family members can’t adjust to culture. • Lack motivation working abroad. • May lack technical expertise. • May not accept new responsibilities.
Retaining Human Resources • Employee motivation is not universal, varies b/w cultures. • Rewards? • Incentives? • Personal Recognition and Praise? • Managers must find cultural acceptable means to motivate!
Employee Compensation • Cultural Sensitivity: cash and non-cash items (ex’s?), benefits vary from country to country. • Base Salary: maintains standard of living when abroad (minimum) • Expatriate Bonus: payment to persuade employee to take job. • Cost of living Adjustment: living costs vary. • Employee Benefits: includes relocation, insurance, tax, education, and medical expenses
Evaluating Employee Performance • Performance standards must be concise and vary globally. • Ex)Ethnocentric approach, parent-country nationals set standards, polycentric approach standards are set by host-country nationals.Why? • Evaluation Forms? Employee perception of this process? • Meaningful and culturally sensitive evaluation is difficult.
Repatriation • The process a person goes through when returning home and settling back into domestic life after working in a foreign country • Reverse culture shock? • Friends/family who have not shared same experiences --like strangers. • Solutions: • Open lines of communication with home country. • Solidify a domestic job opportunity 1 yr before end of stay in foreign country.
Mapping International Trends(Effects the way we conduct business globally) • 1) Global Workplace • 2) Increased Global Competition • 3) Information & Technology • 4) Asia’s Global Impact • 5) Global Consumer & Culture • 6) Companies vs. Nations
Summarize the six global trends (on pages 194-206 in section 6.3) influencing present and future international trade. • Use an example from your own experience, describe how one of these 6 global trends has personally affected you or a member of your family. • Take a look at Figure 6.20 and make a statement based on what you discover. • Continue to work on ISP! Seatwork(Due Wednesday)