HRM 5th chapter 15 international human resources management

International Human
Resources Management

Managing Human Resources
Belcourt * Bohlander * Snell
Copyright © 2008 by Nelson, a division of Thomson
Canada Limited.
All rights reserved.

5th Canadian edition

PowerPoint Presentation by
Monica Belcourt, York University and
Charlie Cook, The University of West Alabama


Objectives

After studying this chapter, you should be able to:
1. Identify the types of organizational forms used for
competing internationally.
2. Explain the economic, political-legal, and cultural
factors in different countries that HR managers
need to consider.
3. Explain how domestic and international HRM differ.
4. Discuss the staffing process for individuals working
internationally.
5. Identify the unique training needs for international
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15–2


Objectives

(cont’d)
After studying this chapter, you should be able to:
6. Identify the characteristics of a good international
compensation plan.
7. Reconcile the difficulties of home- and host-country
performance appraisals.
8. Explain how labour relations differ around the
world.

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15–3


Increasing Importance of Global Human Resource
Understanding
International
International

Mergers
Mergersand
and
Acquisitions
Acquisitions

Foreign
ForeignHuman
Human
Resources
Resources

Importance
Importanceof
of
Global
GlobalHuman
Human
Resources
Resources
Management
Management

Global
Global
Competition
Competition

Market
MarketAccess

Access
Nelson,
a
Opportunities
Opportunities

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15–4


Managing Across Borders
• International corporation

• Global corporation

 Domestic firm that uses its
existing capabilities to
move into overseas
markets.

 Firm that has integrated
worldwide operations
through a centralized home
office.

• Multinational corporation
(MNC)

• Transnational corporation

 Firm with independent
business units operating in
multiple countries.

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 Firm that attempts to
balance local
responsiveness and global
scale via a network of
specialized operating units.

15–5


Types of Organizations

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Figure 15.1

15–6

Top International Companies

MARKET VALUE
(BILLIONS OF U.S. DOLLARS)
1. General Electric
$286.10
2. Microsoft

263.99

3. ExxonMobil

244.93

4. Pfizer

244.89

5. Wal-Mart Stores

232.22

6. Citigroup

210.86

7. Johnson & Johnson

161.36

8. Royal Dutch/Shell Group

158.48

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Source: Chester Dawson, “The Global 1000,” Business Week, July 14, 2003, 34.

153.24
150.97

15–7

Figure 15.2


Top International Companies (cont’d)

SALES
(BILLIONS OF U.S. DOLLARS)
1. Wal-Mart Stores

$244.52

2. ExxonMobil

204.51

3. General Motors

184.21

4. Royal Dutch/Shell

179.43

5. BP

178.72

6. Ford Motor

162.59

7. DaimlerChrysler

156.84

8. Toyota Motor

134.23

9. General Electric

131.70

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Source: Chester Dawson, “The Global 1000,” Business Week, July 14, 2003, 34.

126.80

15–8

Figure 15.2


Top International Companies (cont’d)

PROFITS
(BILLIONS OF U.S. DOLLARS)
1. Citigroup

$15.32

2. General Electric

15.13

3. Altria Group

11.10

4. ExxonMobil

11.01

5. Royal Dutch/Shell

9.42

6. Bank of America

9.25

7. Pfizer

9.18

8. Wal-Mart Stores

8.04

9. Toyota Motor

7.90

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Source: Chester Dawson, “The Global 1000,” Business Week, July 14, 2003, 34.

7.83

15–9

Figure 15.2


How International Companies Affect the
World Economy
• Their production and distribution extend beyond
national boundaries, making it easier to transfer
technology.
• They have direct investments in many countries,
affecting the balance of payments.
• They have a political impact that leads to
cooperation among countries and to the
breaking down of barriers of nationalism.
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15–10


How Does the Global Environment
Influence Management?
• Unified Economies
 Closely partnered nations such as the European
Union (EU) have developed into strong competitors.
 Promotes job growth in trading nations.

• Cultural environment
 The communication patterns, religion, values and
ideologies, education, and social structure of a host
country influence how HR is conducted in that
country.
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15–11


The
TheNations
Nationsof
ofthe
the
European
EuropeanUnion
Union

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15–12


Cultural Environment of International Business

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Figure 15.3

15–13


Domestic versus International HRM
• Issues in international HRM in helping
employees adapt to a new and different
environment outside their own country:
 Relocation
 Orientation
 Objective
 Translation services

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15–14


International Staffing
• Expatriates, or Home-country Nationals
 Employees from the home country who are on
international assignment.

• Host-country Nationals
 Employees who are natives of the host country.

• Third-country Nationals
 Employees who are natives of a country other than
the home country or the host country.

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15–15


Changes in International Staffing over Time

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Figure 15.4

15–16


Hiring Host-Country Nationals
• Three main advantages:
1. Hiring local citizens is generally less costly than
relocating expatriates.
2. Since local governments usually want good jobs for
their citizens, foreign employers may be required to
hire locally.
3. Most customers want to do business with
companies they perceive to be local versus foreign.

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15–17


Recruiting Internationally
• Work Permit, or Visa
 Government document granting a foreign individual
the right to seek employment.

• Guest Workers
 Foreign workers invited to perform needed labour.

• Apprenticeships
 Vocational training programs in skilled trades.

• Transnational Teams
 Teams composed of members of multiple
nationalities working on projects that span multiple
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15–18


Selecting Global Managers
• Global manager
 A manager equipped to run an international business

• Skills Categories
Ability to seize strategic opportunities
Ability to manage highly decentralized organizations
Awareness of global issues
Sensitivity to issues of diversity
Competence in interpersonal relations
Skill in building community
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15–19

Selecting Global Managers
1.
2.
3.
4.

Begin with self-selection.
Create a candidate pool.
Assess core skills.
Assess augmented skills and attributes.

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15–20


Highlights in HRM

Skills of Expatriate Managers
CORE SKILLS
Experience
Decision making
Resourcefulness
Adaptability
Cultural sensitivity
Team building
Maturity

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AUGMENTED SKILLS
Technical skills
Negotiation skills
Strategic thinking
Delegation skills
Change management

Highlights 15.4

15–21


Measured Expatriate Characteristics
• Core Skills
 Skills that are considered
critical to an employee’s
success abroad.

• Augmented Skills
 Skills that are helpful in
facilitating the efforts of
expatriate managers.

• Failure rate
 Percentage of expatriates who

do not
perform
satisfactorily.
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15–22


Comparison of Advantages in Sources of Overseas Managers
HOST-COUNTRY
NATIONALS

HOME-COUNTRY NATIONALS
(EXPATRIATES)

THIRD-COUNTRY
NATIONALS

Less costly

Talent available within company

Broad experience

Preferred by host-country

outlook governments

Greater control

International

Intimate knowledge of
environment and culture

Company experience

Multilingualism

Language facility

Mobility
Experience provided to corporate
executives

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Figure 15.6

15–23


Expatriate Selection Criteria

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Figure 15.7

15–24


Causes of Expatriate Assignment Failure

• Family adjustment
• Lifestyle issues
• Work adjustment
• Bad selection
• Poor performance
• Other opportunities arise
• Business reasons
• Repatriation issues
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Figure 15.8

15–25