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Copyright 2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance

by De Cieri & Kramar

Managing a global workforce

Chapter 14



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Managing a global workforce

ObjectivesDiscuss the meaning of international HRM

(IHRM).Have an understanding of the dimensions

of international HR activities.Be aware of the impact of

internationalisation on the activities and policies of HRM.

Understand the variables that moderate differences between domestic and international HRM.



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Managing a global workforce Objectives (continued)

Understand the complexity of operating in different countries and employing different national categories of employees.

Understand the role of strategic HRM in multinational enterprises.



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Three approaches to IHRM Cross-cultural management approach

Examines human behaviour within organisations from an international perspective.

Comparative HRMSeeks to describe, compare and analyse HRM

systems in various countries. HRM in multinational enterprises (MNEs)

Explores the implications of the process of internationalisation on HRM activities and policies.



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Source: Adapted from P.V. Morgan, ‘International human resource management: Fact or fiction?’, Personnel Administrator, 31(9), 1986, p.44.

Figure 14.1 Model of IHRM



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Types of employees in an MNE Parent-country nationals (PCNs)

Employees who were born and live in a parent country.

A parent (or home) country: the country in which a company’s corporate headquarters is located.

Host-country nationals (HCNs) Employees born and raised in a host country.

Host country: a country in which the MNE seeks to locate or has already located a facility.

Third-country nationals (TCNs) Employees born in a country other than a parent

or host country.



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Types of international work Expatriates

An employee sent by his/her company in one country to work in a different country.

Global team project Bringing together employees from different locations

to complete a specific team project. Short-term assignments

Sending employees on assignments, such as a three-month assignment, to a foreign location.

Virtual assignment. Assignments requiring employees in different locations

to use information technology to communicate on job projects and tasks.



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Factors which differentiate international from domestic HRM More HR activities The need for a broader perspective More involvement in employees'

personal lives Changes in emphasis with variable mix

of expatriates and locals in workforce Risk exposure More external influences



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Source: P.J. Dowling, University of Canberra. Used with permission.

Figure 14.2 Variables that moderate differences between domestic and international HRM



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The cultural environment: key terms Culture

A distinct way of life, shared by members of a group or society, with common values, attitudes and behaviours that are transmitted over time in a gradual, yet dynamic, process.

Culture shockA phenomenon experienced by people who

move across cultures. They experience a shock reaction (or psychological disorientation) when exposed to new cultural experiences, because they misunderstand or do not recognise important cues.



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The cultural environment: the emic-etic distinction Emic

Culture-specific aspects of concepts or behaviour.

Etic:Culture-common aspects of concepts or

behaviour.



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The cultural environment: the convergence hypothesis The hypothesis that management

practices around the world would converge, based on two assumptions:That the principles of sound management

would hold, regardless of national environment.

That the universality of sound management practices would lead to societies becoming more and more alike in the future.



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The cultural environment: the divergence hypothesis In opposition to the convergence

hypothesis, the notion that societies and management practices around the world will remain, or become more, dissimilar.



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Industry type

Multi-domestic industry:An industry in which competition in each

country is essentially independent of competition in other countries.

Global industry:An industry in which a firm’s competitive

position in one country is significantly influenced by its position in other countries.



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Extent of MNE reliance on domestic market The ‘top ten’ MNEs on the UNCTAD ‘index

of transnationality’ Nestlé (Switzerland) Thomson (Canada) Holderbank Financière (Switzerland) [now Holcim] Seagram (Canada) Solvay (Belgium) Asea Brown Boveri (Sweden/Switzerland) Electrolux (Sweden) Unilever (Britain/Netherlands) Philips (Netherlands) Roche (Switzerland)



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Attitudes of senior management to international operations Ethnocentrism

The assumption that one’s own cultural approach is superior to any other.

An ethnocentric approach to international staffing typically results in all key management positions being held by PCNs.

Also, international HRM activities are typically developed and administered by PCNs.



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Source: Adapted from H. De Cieri & P.J. Dowling, ‘Strategic human resource management in multinational enterprises: theoretical and empirical developments’, in P.M. Wright, L.D. Dyer, J.W. Boudreau & G.T. Milkovich (eds.), Research in Personnel and Human Resources Management in the Twenty-First Century, supplement 4. JAI Press, Stamford CT, 1999, p.318.

Strategic HRM • HR function strategy• HR practices

External factors• Industry characteristics• Country/regional characteristics• Inter-organisational networks

Internal organisational factors

• MNE structure- Structure of international operations- Intra-organisational networks- Mechanisms of coordination- International entry mode

• MNE strategy- Corporate-level strategy- Business-level strategy

• Organisational life-cycle stage• Experience in managing international operations• Headquarters international

orientation

MNE concerns & goals• Competitiveness• Efficiency• Balance of global

integration & local responsiveness

• Flexibility

Figure 14.3 Framework of strategic HRM in multinational enterprises



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Summary

Three main approaches have been applied to the study of international HRM.

Several variables moderate differences between domestic and international HRM.

Strategic HRM research examines the relationships between internal organisational characteristics, HRM strategy and practices, and firm performance or competitive advantage. The evidence is inconclusive and important questions remain about the nature of these relationships.

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