chap17 slides

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2004 by Prentice HallTerrie Nolinske, Ph.D. 17 - 1

International

HRMChallenge17


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Challenges

What HRM strategies are appropriate atdifferent stages of internationalization?

How is the best employee mix (host-country and expatriate) determined?

Why do international assignments fail?

How are returning employees re-integrated into the firm?


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Expatriate:

A citizen of onecountry living andworking in anothercountry


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Stages of a Global Organization

Domestic

International

Multinational

Global or Trans-national


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Managing an International Subsidiary

Ethnocentric Approach

Top management and key positions filled bypeople from home country

Polycentric Approach

International subsidiaries managed/staffed bypersonnel from host country

Geocentric Approach Nationality deliberately downplayed

Firm searches worldwide or regionally to hirebest people to fill key positions


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Advantages of Using Local Employees toStaff International Subsidiaries

Lower labor costs

Demonstrates trust in local citizens Increases acceptance of firm by local

community

Firm recognized as part of local economy Represents local opinions in decision-

making


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Advantages of Using Expatriates to StaffInternational Subsidiaries

Cultural similarity with parent companyensures transfer of business practices

Closer control /coordination of internationalsubsidiaries

Employees get multinational orientation

Creates pool of internationally experiencedexecutives

Local talent may not yetadd value


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Disadvantages of Using Local Employees to

Staff International Subsidiaries

Difficult to balance local demands/global

priorities Leads to postponement of difficult local

decisions (such as layoffs)

Difficulty recruiting qualified personnel Reduces amount of control by headquarters


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Disadvantages of Using Expatriates to StaffInternational Subsidiaries

Creates problems of adaptability to foreign

environment and culture

Increases foreignness of subsidiary

Involve high transfer, salary and added costs

May result in personal and family problems

May lower moral and motivation of local management

Subject to local government restrictions


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Why International Assignments Fail

Career blockage

Culture shock Lack of pre-departure cross-cultural

training

Overemphasis on technical qualifications

Getting rid of a troublesome employee

Family problems


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Upon Return

Lack of Respect for Acquired Skills

Loss of Status

Poor Planning for Return Position Reverse Culture Shock


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Selection of Employees for

International Assignments Emphasize cultural sensitivity as a

selection criteria

Establish a selection board of expatriates Require previous international experience

Explore possibility of hiring foreign-born

employees to serve as expatriates atfuture date

Screen candidates spouses and families


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Approach to Cross-Cultural Training

Length of Stay: 1 - 3 yearsTraining 1 - 2 months; High level

Impression ApproachAssessment centerField experiencesSimulationsSensitivity trainingExtensive language training


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Length of stay: 2 - 12 months1 - 4 weeks of training; Moderate level

Affective Approach

Language training

Role playing

Critical incidents

Cases

Stress-reduction training

Moderate language training


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Length of stay: 1 month or less

Less than a weeks of training; Low level

Informative-Giving Approach

Area briefings

Cultural briefings

Films/books

Use of interpreters

Survival-level languagetraining



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Living Costs Around the World

Cost of Living Index 2001

(3 person US Family at $100,000 /year)

Seoul 147.0

Moscow 113.4

New York 100.0

Mexico City 77.6Rio de Janeiro 64.9

Bombay 55.5

Toronto 51.3


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Compensation

Provide expatriate with disposable income

equivalent to what s/he would get at home

Provide explicit add-on incentive foraccepting international assignments

Avoid having expatriates fill same jobsheld by locals or lower-ranking jobs


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Dimensions to Culture

Power distance

Individualism

Uncertainty avoidance

Masculinity/femininity

Long-term/short-term orientation


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EEO in the International Context

U.S. firms cannot base employment decisions onemployee race, sex, and age, butfirms are notrequired to violate a host nation law

Foreign national employees of U.S. firms in theirown country or in another foreign country are notcovered by U.S. employment law

Immigration Control and Reform Act of 1986:

people who are not U.S. citizen, but who are livingand have legal work status in the U.S., may not bediscriminated against


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You work for a global pharmaceutical

company of 75,000 employees. Four of you

have been assigned to each of the followingfour countries for one year: India, Australia,

Zimbabwe and Peru. You are to leave in six

months. How do you prepare for your yearaway? What challenges do you expect?

Case

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