Cross cultural management 3e by cullen ch10

Chapter 10
International Human Resource
Management

Copyright© 2004 Thomson Learning All rights reserved


Learning Objectives
•• Know
Know the
the basic
basic functions
functions ofof human
human resource
resource
management
management
•• Define
Define international
international human
human resource
resource management
management
•• Understand
Understand the
the difference
difference between
between international
international and
and
domestic

domestic human
human resource
resource management
management
•• Know
Know the
the types
types ofof workers
workers used
used by
by multinationals
multinationals

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Learning Objectives
••
••
••
••

Know
Know how
how and
and when
when toto use
use expatriate
expatriate managers
managers

Know
Know the
the skills
skills necessary
necessary for
for aa successful
successful expatriate
expatriate
assignment
assignment
Understand
Understand how
how expatriate
expatriate managers
managers are
are
compensated
compensated and
and evaluated
evaluated
Appreciate
Appreciate the
the issues
issues regarding
regarding expatriate
expatriate
assignments
assignments ofof women
women managers
managers

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Learning Objectives
•• Know
Know what
what toto do
do toto make
make the
the expatriate
expatriate assignment
assignment
easier
easier for
for their
their female
female expatriates
expatriates
•• Understand
Understand e.HR
e.HR systems
systems and
and how
how they
they can
can be
be useful
useful
inin IHRM
IHRM

•• Understand
Understand the
the relationship
relationship between
between choice
choice ofof aa
multinational
multinational strategy
strategy and
and international
international human
human
resource
resource management
management

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Human Resource Management
and Functions
•• HRM:
HRM: deals
deals with
with the
the entire
entire relationship
relationship ofof the
the
employee

employee with
with the
the organization
organization
•• Recruitment:
Recruitment: process
process ofof identifying
identifying and
and attracting
attracting
qualified
qualified people
people toto apply
apply for
for vacant
vacant positions
positions
•• Selection:
Selection: process
process ofof filling
filling vacant
vacant positions
positions inin the
the
organization
organization

Copyright© 2005 South-Western/Thomson Learning All rights reserved

Basic HRM Functions
•• Training
Training and
and development:
development: giving
giving employees
employees the
the
knowledge,
knowledge, skills,
skills, and
and abilities
abilities toto perform
perform successfully
successfully
•• Performance
Performance appraisal:
appraisal: system
system toto measure
measure and
and assess
assess
employees’
employees’work
work performance
performance

Copyright© 2005 South-Western/Thomson Learning All rights reserved

Basic HRM Functions
•• Compensation:
Compensation: organization’s
organization’s entire
entire reward
reward package,
package,
including
including financial
financial rewards,
rewards, benefits,
benefits, and
and job
job security
security
•• Labor
Labor relations:
relations: ongoing
ongoing relationship
relationship between
between an
an
employer
employer and
and those
those employees
employees represented
represented by
by labor
labor

organizations
organizations

Copyright© 2005 South-Western/Thomson Learning All rights reserved


International Human Resource
Management
••
••

All
All HRM
HRM functions,
functions, adapted
adapted toto the
the international
international setting
setting
Two
Two added
added complexities
complexities compared
compared toto domestic
domestic HRM
HRM
•• Must
Must choose
choose aa mixture
mixture ofof international

international employees
employees
•• Must
Must decide
decide the
the extent
extent ofof adaptation
adaptation toto local
local
conditions
conditions

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Types of Employees in
Multinational Organizations
••
••

Expatriate:
Expatriate: employee
employee from
from aa different
different country
country
Home
Home country
country nationals:
nationals: expatriate

expatriate employees
employees from
from
the
the parent
parent firm’s
firm’s home
home country
country
•• Third
Third country
country nationals:
nationals: expatriate
expatriate workers
workers who
who come
come
from
from neither
neither the
the host
host nor
nor home
home country
country

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Types of Employees in

Multinational Organizations
•• Host
Host country
country nationals:
nationals: local
local workers
workers who
who come
come from
from
the
the host
host country
country where
where the
the unit
unit isis located
located
•• Inpatriate:
Inpatriate: employees
employees from
from foreign
foreign countries
countries who
who work
work
inin the
the country
country where
where the

the parent
parent company
company isis located
located

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Key Questions Regarding
Local Employees
••
••
••

How
How can
can we
we identify
identify talented
talented local
local employees?
employees?
How
How can
can we
we attract
attract these
these employees
employees toto apply
apply for

for jobs?
jobs?
Can
Can we
we use
use our
our home
home country’s
country’s training
training methods
methods with
with
local
local employees?
employees?
•• What
What types
types ofof appraisal
appraisal methods
methods are
are customary?
customary?

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Key Questions Regarding
Local Employees (cont.)
••
••

What
What types
types ofof rewards
rewards do
do local
local people
people value?
value?
How
How can
can we
we retain
retain and
and develop
develop employees
employees with
with aa high
high
potential
potential as
as future
future managers?
managers?
•• Do
Do any
any local
local laws
laws affect
affect staffing,

staffing, compensation,
compensation, and
and
training
training decisions?
decisions?

Copyright© 2005 South-Western/Thomson Learning All rights reserved


The Expatriate or the Host
Country Manager
•• Multinationals
Multinationals must
must decide
decide whether
whether toto use
use expatriates
expatriates
or
or home
home country
country nationals
nationals
•• Need
Need toto look
look atat some
some questions
questions
•• Given

Given the
the firm’s
firm’s strategy,
strategy, what
what isis the
the preference
preference for
for
the
the position?
position?

Copyright© 2005 South-Western/Thomson Learning All rights reserved


The Expatriate or the Host
Country Manager
•• Using
Using expatriate
expatriate managers
managers
•• Do
Do parent
parent country
country managers
managers have
have the
the appropriate
appropriate
skills?

skills?
•• Are
Are they
they willing
willing toto take
take expatriate
expatriate assignments?
assignments?
•• Do
Do any
any laws
laws affect
affect the
the assignment
assignment ofof expatriate
expatriate
managers?
managers?
•• Using
Using host
host country
country managers
managers
•• Do
Do they
they have
have the
the expertise
expertise for
for the

the position?
position?
•• Can
Can we
we recruit
recruit them
them from
from outside
outside the
the company?
company?
Copyright© 2005 South-Western/Thomson Learning All rights reserved


Is the Expatriate Worth It?
•• Decisions
Decisions must
must take
take into
into account
account costs
costs ofof such
such
assignments
assignments
•• High
High cost
cost
•• High
High failure

failure rate
rate

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Exhibit 10.1: Paying for the
Expatriate Manager: Indices of
Cost of Living Abroad

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Reasons for U.S. Expatriate
Failure
•• Individual
Individual
•• Personality
Personality ofof the
the manager
manager
•• Lack
Lack ofof technical
technical proficiency
proficiency
•• No
No motivation
motivation for
for assignment
assignment

•• Family
Family
•• Spouse
Spouse or
or family
family members
members fail
fail toto adapt
adapt
•• Family
Family members
members or
or spouse
spouse do
do not
not want
want toto be
be there
there
Copyright© 2005 South-Western/Thomson Learning All rights reserved


Reasons for U.S. Expatriate
Failure (cont.)
•• Cultural
Cultural
•• Manager
Manager fails
fails toto adapt
adapt

•• Manager
Manager fails
fails toto develop
develop relationship
relationship with
with key
key
people
people
•• Organizational
Organizational
•• Excessively
Excessively difficult
difficult responsibilities
responsibilities
•• Company
Company fails
fails toto pick
pick the
the right
right person
person
•• Company
Company fails
fails toto provide
provide the
the technical
technical support
support
Copyright© 2005 South-Western/Thomson Learning All rights reserved

Strategic Role of Expatriate
Assignments
••
••
••
••

Helps
Helps managers
managers acquire
acquire international
international skills
skills
Helps
Helps coordinate
coordinate and
and control
control operations
operations dispersed
dispersed
activities
activities
Communication
Communication ofof local
local needs/strategic
needs/strategic information
information toto
headquarters

headquarters
In-depth
In-depth knowledge
knowledge ofof local
local markets
markets

Copyright© 2005 South-Western/Thomson Learning All rights reserved


International Cadre: Another
Choice
•• Separate
Separate group
group ofof expatriate
expatriate managers
managers who
who specialize
specialize
inin aa career
career ofof international
international assignments
assignments
•• Have
Have permanent
permanent international
international assignments
assignments
•• Move
Move from

from international
international assignments
assignments toto international
international
assignments
assignments
•• Recruited
Recruited from
from any
any country
country
•• Sent
Sent toto worldwide
worldwide locations
locations toto develop
develop cross-cultural
cross-cultural
skills
skills
Copyright© 2005 South-Western/Thomson Learning All rights reserved


Key Success Factors for
Expatriate Assignments
••
••
••
••
••
••

Technical
Technical and
and managerial
managerial skills
skills
Personality
Personality traits
traits
Relational
Relational abilities
abilities
Family
Family situation
situation
International
International motivation
motivation
Language
Language ability
ability

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Exhibit 10.2: Expatriate
Success Factors and
Selection Methods

Copyright© 2005 South-Western/Thomson Learning All rights reserved

Priority of Success Factors
•• Assignment
Assignment length
length
•• Technical
Technical and
and professionals
professionals skills
skills are
are key
key for
for short
short
assignments
assignments
•• Cultural
Cultural similarity
similarity
•• Required
Required interaction
interaction with
with local
local people
people
•• Job
Job complexity
complexity and
and responsibility

responsibility

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Exhibit 10.3: Selecting
Expatriates: Priorities for Success
Factors by Assignment
Characteristics

Copyright© 2005 South-Western/Thomson Learning All rights reserved


Training and Development
•• Cross-cultural
Cross-cultural training:
training: increases
increases the
the relational
relational abilities
abilities
ofof future
future expatriates
expatriates and
and their
their spouses
spouses and
and families
families
•• Training

Training rigor:
rigor: extent
extent ofof effort
effort by
by both
both trainees
trainees and
and
trainers
trainers required
required toto prepare
prepare the
the trainees
trainees for
for expatriate
expatriate
positions
positions

Copyright© 2005 South-Western/Thomson Learning All rights reserved