global human resource management lecture 1
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GLOBAL HUMAN GLOBAL HUMAN RESOURCE MANAGEMENTRESOURCE MANAGEMENT
IMBA 552IMBA 552
International Business and International Business and HRMHRM
PURPOSE OF THIS CLASSPURPOSE OF THIS CLASS
To understand the management of global human capital
To understand the role of the global human resource function
To begin pre-preparation for your international experience
To begin the process of “writing a thesis”
RANK COUNTRY POPULATION % OF WORLDPOPULATION
- World 6.7 billion 100%
1 People’s RepublicOf China
1.3 billion 19.9%
2 India 1.1 billion 17.04%
3 United States .3 billion 4.57%
4 Indonesia .2 billion 3.47%
5 Brazil .18 billion 3.81%
6 Pakistan .16 billion 2.46%
FACTS For PUBLICLY FACTS For PUBLICLY TRADEDTRADED
• 60,000 MNE’s employ over than 45mm people60,000 MNE’s employ over than 45mm people
• By 2010 this will increase to 75mmBy 2010 this will increase to 75mm
• In 1957 US contributed 53% to global GDP – today In 1957 US contributed 53% to global GDP – today 18%18%
• In 2003 25 countries employed 40mm people In 2003 25 countries employed 40mm people with a total of USD 13.73 trillion in annual with a total of USD 13.73 trillion in annual revenues and USD 45 trillion in assetsrevenues and USD 45 trillion in assets
• Key players besides US, Germany, Great Britain, Key players besides US, Germany, Great Britain, France and Japan is; south Korea, Mexico, Russia, France and Japan is; south Korea, Mexico, Russia, China, BrazilChina, Brazil
OTHERSOTHERS
• Some of the largest international firms Some of the largest international firms are owned by families, especially in are owned by families, especially in China, Taiwan, Thailand, Hong Kong, China, Taiwan, Thailand, Hong Kong, Indonesia, Malaysia and SingaporeIndonesia, Malaysia and Singapore
• Growing numbers of Small Growing numbers of Small Multinationals (SME’s)Multinationals (SME’s)– In Germany there are 350 SME’s that In Germany there are 350 SME’s that
dominate their market nichedominate their market niche
DRIVERS FOR DRIVERS FOR GLOBALIZATIONGLOBALIZATION
• Scale EconomiesScale Economies
• Scope EconomiesScope Economies
• Shorter Product Life CyclesShorter Product Life Cycles
• Direct Foreign InvestmentDirect Foreign Investment
• TechnologyTechnology
RATIONALE FOR GLOBAL HRMRATIONALE FOR GLOBAL HRM
• Increased travelIncreased travel
• Rapid and extensive global Rapid and extensive global communicationscommunications
• Rapid transfer of new technologyRapid transfer of new technology
• Growing trade, foreign competitionGrowing trade, foreign competition
• Improving educationImproving education
• Emigration of large numbers of peopleEmigration of large numbers of people
Porter’s Diamond (Adapted from Porter:1990)
Firm Strategy, Structure and
Rivalry
Factor Endowments Demand
Conditions
Related and Supporting Industries
COMPETITIVE ADVANTAGE OF NATIONS
TRENDS IN THE INTERNATIONAL TRENDS IN THE INTERNATIONAL DIVISION OF LABOR- Reich’s New DIVISION OF LABOR- Reich’s New
World OrderWorld Order
• Routine Production Routine Production ServicesServices
• In-person ServicesIn-person Services
• Symbolic Analytic Symbolic Analytic ServicesServices
• Zero-sum Zero-sum NationalismNationalism
• CosmopolitanismCosmopolitanism
• Positive Economic Positive Economic NationalismNationalism
Routine production servicesRoutine production services
Routine production as an employee on an assembly line or supervisory
jobs or clerical jobs involving repetitive checks on employees and enforcement of standard operating
procedures
In person servicesIn person services
Simple repetitive tasks with little training providing services directly to the consumer, e.g. salespersons, hairdressers, waiters, cleaning staff, receptionists, etc.
Symbolic-analytic servicesSymbolic-analytic services
These jobs require skills in problem solving and problem identification, e.g. engineers,
architects, managers, research scientists, etc.
Zero sum nationalismZero sum nationalism“ The assumption that there are only two outcomes possible in economic warfare:
either we win or they win, so we had better
make sure that we win.
Countries therefore close their eyes to globalization and try to protect and
improve their own position.
Government subsidies for deteriorating industries and a renewed interest in
protectionism are the hallmarks of this scenario.
CosmopolitanismCosmopolitanism
The ideal of free trade is championed. This is not a zero sum game: the world as a whole can improveThrough free trade. By making products where theycan be made most cheaply, we all benefit in the end.
Reich maintains this is the attitude that will most likelydetermine the future.
Positive economic Positive economic nationalismnationalism
Each nations citizens take primary responsibility for enhancing the
capabilities of their countrymen for full and productive lives, but also
work with other nationals to ensure that these improvements do not come
at others’ expense.
This argument provides for free trade with some form of government
intervention
What is Human Resource What is Human Resource ManagementManagement
As a field it is about: the understanding, researching, applying and revising all
human resource activities in their internal and external contexts as they impact the process of managing human resources in
enterprises throughout the global environment to enhance the experience of multiple stakeholders, including investors, customers, employees, partners, suppliers,
environment, and society.
Forms of International HRMForms of International HRM
• Operation of parent-country firmsOperation of parent-country firms
• Operation of foreign firms in the Operation of foreign firms in the home countryhome country
• Operation of Third party nationalsOperation of Third party nationals
• Employment of foreign citizens (or Employment of foreign citizens (or recent immigrants and/or their recent immigrants and/or their familiesfamilies
DIFFERENCES BETWEEN DIFFERENCES BETWEEN DOMESTIC AND INTERNATIONAL DOMESTIC AND INTERNATIONAL
HRMHRM• Responsibility for greater number of activitiesResponsibility for greater number of activities
• Need for greater level of expertiseNeed for greater level of expertise– e.g. employment lawse.g. employment laws
• Necessity for closer involvement with employees Necessity for closer involvement with employees (e.g. expatriate families(e.g. expatriate families
• Greatly expanded and different mix of employeesGreatly expanded and different mix of employees
• Having to deal with more external influencesHaving to deal with more external influences
• Having to face greater exposure to problems and Having to face greater exposure to problems and difficultiesdifficulties