mondy hrm12 inppt14

Human Resource Management 12th Edition

Chapter 14Global Human Resource

Management

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 14-1

HRM in Action: Getting Tougher to Bribe in the International Arena

• Foreign Corrupt Practices Act prohibits U.S. firms from bribing foreign officials.

• 43% reported that they had lost business because a competitor had paid a bribe.

• Conducting business globally exposes companies in the U.S. and other countries to an environment that permits bribery.


HRM in Action: Global Bribery (Cont.)

• Attacks of 9/11/2001 caused authorities to take much closer look at financial data as they searched for terrorists' funds.– Found bribery corruption in the process

• Siemens agreed to pay $1.6 billion to settle enforcement actions.

• Lucent recently paid multimillion-dollar fine.• Baker Hughes paid $44 million in penalties. • KBR and Halliburton fined $579 million over bribes.


Evolution of Global Business

• Not long ago, Mercedes-Benz was still a German company, General Electric was American, and Sony was Japanese.

• Many United States firms, such as Coca-Cola, Procter & Gamble, and Texas Instruments, do most of their business and employ most of their workers outside the U.S.

• Many non-U.S. companies make products here; for example, Toyota American makes cars in Kentucky.


Evolution of Global Business

• Exporting: Selling abroad retaining foreign agents and distributors

• Licensing: Organization grants foreign firm right to use intellectual property

• Franchising: Parent company grants another firm right to do business in prescribed manner


Evolution of Global Business (cont.)

• Multinational corporation: Firm based in one country that produces goods or provides services in one or more foreign countries

• Global corporation: Corporate units in countries are integrated to operate as one organization worldwide

• Transnational corporation: Moves work to places with talent to handle the job and time to do it at right cost


Global Professional in Human Resources

• New certification for HRCI• Focuses on:

– Strategic HR management– Global talent acquisition and mobility– Global compensation and benefits– Organizational effectiveness– Talent development– Workforce relations– Risk management


Global Human Resource Management

• Functional areas similar to domestic HR

• Manner in which they are implemented may differ



Environment of Global Human Resource Management

1Human

Resource Managemen

t Other Functional

Areas

OperationsMarketing

Finance

Lega

l Con

side

ratio

ns E

cono

my

Technology

Society

Shareholders

Unions

Customers Competition Labor Market

Human Resource

Development

Com

pens

atio

n

Staffing

Employee and

Labor Relations

Safety and Health

INTERNAL ENVIRONMENT

EXTERNAL ENVIRONMENT UNITED STATES

GLOBAL ENVIRONMENTU

nanticipated E

ventsP

oliti

cal P

artie

s

Global Staffing

• Types of global staff members

• Approaches to global staffing


Types of Global Staff Members

• Expatriate: Employee working in firm who is not a citizen of country in which firm is located, but a citizen of country where organization is headquartered

• Host-country national: Employee’s nationality same as location of subsidiary

• Third-country national: Citizen of one country, working in second country, and employed by organization headquartered in third country


Approaches to Global Staffing

• Ethnocentric staffing: Primarily hiring expatriates for higher-level foreign positions

• Polycentric staffing: More host-country nationals are used throughout the organization, from top to bottom


Approaches to Global Staffing (cont.)

• Regiocentric staffing: Regional groups of subsidiaries reflect organization’s strategy and structure work as a unit

• Geocentric staffing: Using worldwide integrated business strategy to hire the best person for the job


Selecting Expatriates

Four distinct stages: 1. Self-selection2. Creating a candidate

pool3. Technical skills

assessment4. Making a mutual

decision


Background Investigation

• Conducting background investigations in other countries is equally, or more, important than in U.S.

• Differences across cultures and countries often create barriers.

• Each country has own laws, customs, and procedures for background screenings.


Cyberwork in the Global Environment

• Can communicate throughout the world virtually instantaneously.

• Creates possibility of a never-ending workday.

• Smart phones make a worker available for work 24 hours a day.

• Some workers believe that their employer wants them available 24/7.


Global Human Resource Development

• Pre-move orientation and training

• Continual development: Online assistance and training

• Repatriation orientation and training


Expatriate Preparation and Development Program


Expatriate Preparation and Development

Prior to Departure: Orientation and Training

During Assignment: Continual Development

Near Completion: Repatriation Orientation Training

Language Culture History Local Customs Living Conditions

Expanding Skills Career Planning Home-Country Development

U.S. Lifestyle U.S. Workplace U.S. Employees

Global E-Learning

• Globalization has created special need for e-learning.

• Challenges for global e-learning implementation include language and localization issues.

• Companies that want to offer courses in several languages usually turn to translators.


Virtual Teams in Global Environment

• Necessity of everyday working life

• Enable companies to accomplish things more quickly and efficiently


Difficulties that Virtual Teams Confront

• Do not feel as connected or committed to team

• Communication problems directly proportional to number of time zones separating them

• Language and culture problems


Compensation for Host-Country Nationals

• Organizations should think globally but act locally.

• Compensation is normally slightly above prevailing wage rates in the area.

• Variations in laws, living costs, tax policies, and other factors must be considered.


Compensation for Host-Country Nationals (cont.)

Factors to consider: – Minimum wage requirements – Working time information such as

annual holidays and vacation time and pay

– Hiring and termination rules – Regulations covering severance

practices Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 14-23

Compensation for Host-Country Nationals (cont.)

• Culture often plays a part. • North American practices encourage

individualism and high performance. • Continental European programs typically

emphasize social responsibility.• Traditional Japanese approach considers

age and company service as primary determinants of compensation.


Expatriate Compensation

• Largest expatriate costs include overall remuneration, housing, cost-of-living allowances, and physical relocation.

• U.S. citizens living overseas can exclude up to $91,400 of income earned abroad.

• Additional challenges in the last few years include devaluation of the U.S. dollar.


Global Safety and Health

• Employees who work in safe environment and enjoy good health more likely to be productive and yield long-term benefits to organization.

• U.S.-based global operations are often safer and healthier than host-country operations, but not as safe as similar operations in U.S.


Global Safety Programs

• Global companies continue to face global safety risks.

• Bhopal Disaster of 1984 was the worst industrial disaster in history.

• Companies have discovered that the way they treat their workers anywhere on the planet can pose a risk to their corporate reputation.

• It is easier to teach someone the company global standards than the local mores.


Global Employees and Labor Relations

Strength and nature of unions differ from country to country, with unions ranging from nonexistent to relatively strong.


Global Employees and Labor Relations in European Countries

• Codetermination: Requiring firms to have union or worker representatives on their boards of directors, is very common.

• Laws make it hard to fire workers, so companies are reluctant to hire.

• Generous and lengthy unemployment benefits can discourage jobless from seeking new work.


Global Employees and Labor Relations in South American Countries

• In countries such as Chile, collective bargaining for textile workers, miners, and carpenters is prohibited.

• Unions are generally allowed only in companies of 25 workers or more.

• This practice has encouraged businesses to split into small companies to avoid collective bargaining.


North American Free Trade Agreement (NAFTA)

• Between Canada, Mexico, and United States

• Facilitated movement of goods across boundaries within North America

• Free-trade zone of over 400 million people

• Combined gross domestic profit of about $12 trillion


Central American Free Trade Agreement

• Ratified after long political battle, and signed into law in 2005

• Could provide huge economic boost for region


Legal and Political Factors

The nature and stability of legal and political systems vary throughout the world.


Legal and Political Factors (cont.)

• Legal and political forces are unique to each country, and sometimes laws of one country contradict those of another.

• HR regulations and laws vary greatly among countries.

• “Does operating under local laws and customs free a company of all ethical considerations?”


Tariffs and Quotas

• Tariffs: Taxes collected on goods shipped across national boundaries

• Quotas: Limits on the number or value of goods imported across national boundaries


Global EEO and Sexual Harassment

• Women currently make up nearly 25% of expatriates.

• Gains in female expatriate participation rates have not been equally distributed worldwide.

• A disproportionate number of cross-cultural sexual harassment complaints involve perpetrators and victims from different ethnic, racial, or national origin groups.



All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.