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18-2. Case: Molex. World's second largest manufacturer of electronic components50 manufacturing plants, 21 countriesHRM viewed as most localized of all the functionsHires experienced , educated foreign nationals in the US for foreign postingsMoves people around the worldIn house management dev
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1. Chapter Global Human Resource Management
2. 18-2 Case: Molex Worlds second largest manufacturer of electronic components
50 manufacturing plants, 21 countries
HRM viewed as most localized of all the functions
Hires experienced , educated foreign nationals in the US for foreign postings
Moves people around the world
In house management development programs
3. 18-3 Human resource management (HRM) Refers to the activities an organization carries out to use its human resources effectively
Four major tasks of HRM
Staffing policy
Management training and development
Performance appraisal
Compensation policy
4. 18-4 International human resource management Strategic role: HRM policies should be congruent with the firms strategy and its formal and informal structure and controls
Right People, Right Place, Right Time
Task complicated by profound differences between countries in labor markets, culture, legal and economic systems
5. 18-5 Strategy, structure and control systems
6. 18-6 Staffing policy Staffing policy
Selecting individuals with requisite skills to do a particular job
Tool for developing and promoting corporate culture
View People as Resource ($in profit out)
Types of Staffing Policy
Ethnocentric
Polycentric
Geocentric
7. 18-7 Ethnocentric policy Key management positions filled by parent-country nationals
Advantages:
Overcomes lack of qualified managers in host nation
Unified culture
Helps transfer core competencies (and skills back)
Disadvantages:
Produces resentment in host country
Can lead to cultural myopia
8. 18-8 Polycentric policy Host-country nationals manage subsidiaries
Parent company nationals hold key headquarter positions
Best suited to multi-domestic businesses
Advantages:
Alleviates cultural myopia.
Inexpensive to implement
Helps transfer core competencies
Disadvantages:
Limits opportunity to gain experience of host-country nationals outside their own country.
Can create gap between home-and host-country operations
9. 18-9 Geocentric policy Seek best people, regardless of nationality
not always possible
Best suited to Global and trans-national businesses
Advantages:
Enables the firm to make best use of its human resources
Equips executives to work in a number of cultures
Helps build strong unifying culture and informal management network
Disadvantages:
National immigration policies may limit implementation
Expensive to implement due to training and relocation
Compensation structure can be a problem.
10. 18-10 Comparison of staffing approaches
11. 18-11 The expatriate problem Expatriate: citizens of one country working in another
Expatriate failure: premature return of the expatriate manager to his/her home country
Cost of failure is high: estimate = 3X the expatriates annual salary plus the cost of relocation (impacted by currency exchange rates and assignment location)
Inpatriates: expatriates who are citizens of a foreign country working in the home country of their multinational employer
12. 18-12 Expatriate failure rates
13. 18-13 Reasons for expatriate failure US multinationals
Inability of spouse to adjust
Managers inability to adjust
Other family problems
Managers personal or emotional immaturity
Inability to cope with larger overseas responsibilities
European multinationals
Inability of spouse to adjust Japanese Firms
Inability to cope with larger overseas responsibilities
Difficulties with the new environment
Personal or emotional problems
Lack of technical competence
Inability of spouse to adjust.
14. 18-14 Expatriate selection Reduce expatriate failure rates by improving selection procedures
An executives domestic performance does not (necessarily) equate his/her overseas performance potential
Employees need to be selected not solely on technical expertise but also on cross-cultural fluency
15. 18-15 Four attributes that predict success Self-Orientation
Possessing high self-esteem, self-confidence and mental well-being
Others-Orientation
Ability to develop relationships with host-country nationals
Willingness to communicate
Perceptual Ability
The ability to understand why people of other countries behave the way they do
Being nonjudgmental and being flexible in management style
Cultural Toughness
Relationship between country of assignment and the expatriates adjustment to it
16. 18-16 Training and management development Training: Obtaining skills for a particular foreign posting
Cultural training : Seeks to foster an appreciation of the host-countrys culture
Language training : Can improve expatriates effectiveness, aids in relating more easily to foreign culture and fosters a better firm image
Practical training: Ease into day-to-day life of the host country
17. 18-17 Training & management development continued Development: Broader concept involving developing managers skills over his or her career with the firm
Several foreign postings over a number of years
Attend management education programs at regular intervals
18. 18-18 Repatriation of expatriates
19. 18-19 Management development & strategy Development programs designed to increase the overall skill levels of managers through:
On going management education
Rotation of managers through a number of jobs within the firm to give broad range of experiences
Used as a strategic tool to build a strong unifying culture and informal management network
Above techniques support transnational and global strategies
20. 18-20 Performance appraisal Problems:
Unintentional bias
Host-nation biased by cultural frame of reference
Home-country biased by distance and lack of experience working abroad
Expatriate managers believe that headquarters unfairly evaluates and under appreciates them
In a survey of personnel managers in U.S. multinationals, 56% stated foreign assignment either detrimental or immaterial to ones career.
21. 18-21 Guidelines for performance appraisal More weight should be given to onsite managers evaluation as they are able to recognize the soft variables
Expatriate who worked in same location should assist home-office manager with evaluation
If foreign on-site managers prepare an evaluation, home-office manager should be consulted before completion of formal the terminal evaluation
22. 18-22 Compensation Two issues:
Pay executives in different countries according to the standards in each country?
or
Equalize pay on a global basis?
Method of payment
23. 18-23 Compensation for four positions in 26 countries
24. 18-24 National differences in compensation
25. 18-25 National differences in CEO pay for midsize companies
26. 18-26 Compensation issues
27. 18-27 Expatriate pay Typically use balance sheet approach
Equalizes purchasing power to maintain same standard of living across countries
Provides financial incentives to offset qualitative differences between assignment locations.
Pay for Schools, health care, etc.
28. 18-28 Components of expatriate pay Base Salary
Same range as a similar position in the home country
Foreign service premium
Extra pay for work outside country of origin
Allowances
Hardship, housing, cost-of-living and education allowances
Taxation
Firm pays expatriates income tax in the host country
Benefits
Level of medical and pension benefits identical overseas
29. 18-29 The balance sheet
30. 18-30 International labor relations Key Issue
Degree to which organized labor can limit the choices of an international business
Aims to foster harmony and minimize conflicts between firms and organized labor
31. 18-31 Concerns of organized labor Multinational can counter union bargaining power with threats to move production to another country
Multinational will keep highly skilled tasks in its home country and farm out only low-skilled tasks to foreign plants
Easy to switch locations if economic conditions warrant
Bargaining power of organized labor is reduced
Attempts to import employment practices and contractual agreements from multinationals home country
32. 18-32 Strategy of organized labor Attempts to establish international labor organizations
Lobby for national legislation to restrict multinationals
Attempts to achieve international regulations on multinationals through such organizations as the United Nations