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GLOBAL HUMAN RESOURCE

MANAGEMENT

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The Global Environment

Figure 4.3

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Chapter Objectives

• Describe the evolution of global business.

• Explain the development of global human resource management.

• Describe the global human resource management function.

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Chapter Objectives (Continued)

• Explain possible barriers to effective global human resource management.

• Describe the global impact of the Internet.

• Explain global equal employment opportunity.

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Chapter Objectives (Continued)

• Describe the keys to global human resource management of expatriates.

• Explain the importance of maintaining corporate identity through corporate culture.

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Increasing Importance of Global Human Resource Understanding

International International Mergers and Mergers and AcquisitionsAcquisitions

International International Mergers and Mergers and AcquisitionsAcquisitions

Importance of Global Human

Resources Management

Importance of Global Human

Resources Management

Foreign Human Foreign Human ResourcesResources

Foreign Human Foreign Human ResourcesResources

Global Global CompetitionCompetition

Global Global CompetitionCompetition

Market Access Market Access OpportunitiesOpportunities

Market Access Market Access OpportunitiesOpportunities

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Managing Across Borders

• International corporation– Domestic firm that

uses its existing capabilities to move into overseas markets.

• Multinational corporation (MNC)– Firm with independent

business units operating in multiple countries.

• Global corporation– Firm that has

integrated worldwide operations through a centralized home office.

• Transnational corporation– Firm that attempts to

balance local responsiveness and global scale via a network of specialized operating units.

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Types of OrganizationsTypes of Organizations

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The Evolution of Global Business

• Exporting - Selling abroad• Licensing - Organization

grants a foreign firm the right to use intellectual properties

• Franchising - Parent company grants another firm the right to do business in a prescribed manner

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The Evolution of Global Business (Continued)

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

• Global corporation - Has corporate units in a number of countries that are integrated to operate as one organization worldwide

• Globalization - Creation of shareholder value worldwide through differentiation and competitive advantage

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Evolution of Global Human Resource Management

• Globally, HR executives are strategic partners with line managers

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Development of Global Human Resource Management (Continued)

• Actively participate in top-level business decisions

• Focused on being strategic business partner and decision maker

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Global Human Resource Management

• Global Staffing• Global Human

Resource Development

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Global Human Resource Management (Continued)

• Global Compensation and Benefits• Global Safety and Health• Global Employee and Labor

Relations

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Environment Of Global HR ManagementGlobal Environment

External Environment (US)Internal Environment (US)

Staffing

Employee &

Labor Relations

Safety &Health

Compensation& Benefits

Human Resource

Development

HR ManagementFunctions

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Hofstede’s Model of National Culture

Figure 4.4

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Hofstede’s Model of National Culture

• Collectivism–A worldview that values subordination

of the individual to the goals of the group and adherence to the principle that people should be judged by their contribution to the group

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Hofstede’s Model of National Culture

• Individualism–A worldview that values individual

freedom and self-expression and adherence to the principle that people should be judged by their individual achievements rather than by their social background

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Hofstede’s Model of National Culture

• Power Distance–A society’s acceptance of differences

in the well being of citizens due to differences in heritage, and physical and intellectual capabilities (individualism).

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Hofstede’s Model of National Culture

Achievement versus Nurturing Orientation–Achievement orientations –

worldview that values assertiveness, performance, success, and competition.

–Nurturing orientation - worldview that values quality of life, warm personal friendships, and services and care for the weak.

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Hofstede’s Model of National Culture

Uncertainty Avoidance – degree to which societies are willing to tolerate uncertainty and risk– Low uncertainty avoidance cultures (e.g.,

U.S. and Hong Kong) value diversity and tolerate differences in personal beliefs and actions

– High uncertainty avoidance societies (e.g., Japan and France) are more rigid and skeptical about people whose behaviors or beliefs differ from the norm

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Hofstede’s Model of National Culture

• Long Term orientation – worldview that values thrift and persistence in achieving goals

• Short-term orientation – worldview that values personal stability or happiness and living for the present

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National Culture and Global Management

• Management practices that are effective in one culture might be troublesome in another

• Managers must be sensitive to the value systems and norms of an individual’s country and behave accordingly

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Global Staffing

• Types of Global Staff Members

• Approaches to Global Staffing

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Types of Global Staff Members

• Expatriate - Employee working in a firm who is not a citizen of the country in which the firm is located but is a citizen of the country in which the organization is headquartered

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

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

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Approaches to Global Staffing

• Ethnocentric staffing - Companies primarily hire expatriates to staff higher-level foreign positions

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

• Regiocentric staffing - Regional groups of subsidiaries reflecting the organizations strategy and structure work as a unit

• Geocentric staffing - Uses a worldwide integrated business strategy

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Global Human Resource Development

• Expatriate Development

• Repatriation Orientation and Training

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Global Compensation and Benefits

• Main reason firms relocate to other areas is high wage pressure

• If wage pressures cannot be offset by increased productivity, company will make global move

• Overcompensating expatriates is common

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Global Safety and Health

• U.S. global operations are often safer and healthier than those of host-country operations

• Laws and regulations vary greatly from country to country

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Global Employees and Labor Relations

• Unionism maintains much of its strength abroad

• Foreign unions are less adversarial with management

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Possible Barriers to Effective Global Human Resource

Management• Political and legal factors• Cultural factors• Economic factors• Labor/management relations

factors• Other barriers

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Eight Keys to Global HR Management of Expatriates

• Global business plan must be completely understood

• Company's foreign service policy should be set of guidelines, not rigid rules

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Eight Keys to Global HR Management of Expatriates

(Continued)• Develop global budget process• Profile candidate and his or her

family• Clearly state terms and conditions

of global assignment• Prepare expatriates and families

for relocation

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Eight Keys to Global HR Management of Expatriates

(Continued)• Develop and implement continual

development process• Prepare returning expatriates and

their families

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Maintaining Corporate Identity Through Corporate Culture

• Requires innovative insight• Risks losing set of values and

operating procedures that defines corporate culture

• Ideally, corporate culture of global corporations will closely parallel that of home country

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Key Terms

• augmented skills• balance-sheet approach• codetermination• core skills• cultural environment• culture shock• expatriates, or home-

country nationals• failure rate• global corporation• global manager• guest workers

• home-based pay• host-based pay• host country• host-country nationals• international corporation• localization• multinational corporation

(MNC)• repatriation• third-country nationals• transnational corporation• transnational teams• work permit, or visa

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Application Exercises

Case Incident 01: Boss, I Think We Have A Problem(Report on 12/31)

Case Incident 02: Carter Cleaning Company Going Abroad (Report on 12/31)

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