© 2010 by Prentice Hall 17-1 International HRM Challenge Chapter 17 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall.

© 2010 by Prentice Hall 17-1

International HRM

Challenge

Chapter 17

Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall


Stages of International Involvement Determining the Mix of Host Country and Expatriate Employees

Expatriate Assignments Challenges Enhancing the Effectiveness with HRM

Developing HRM Policies in Global Context

HRM and Exporting Firms

Chapter 17 OverviewChapter 17 Overview



Expatriate—citizen of one country Lives and works in another country

Stages of International Stages of International InvolvementInvolvement

Multinational corporation (MNC) Firm with assembly and production

Facilities in several regions of the world Transnational corporation

Firm with highly decentralized operations In many countries Has little allegiance to its country of

origin Weak ties to any given country






Outsourcing Used extensively by firms in stages 3 to 5 Challenges include

o Online securityo Safety issueso Client complaints


Falling Barriers Trade, production, services, and finances

barriers largely disappeared



Wholly owned subsidiary and joint ventures Must decide who will manage overseas unit

Three approaches Ethnocentric approach Polycentric approach Geocentric approach

The Mix of Host-Country and The Mix of Host-Country and Expatriate EmployeesExpatriate Employees



Reliance on expatriates increases when:

The Mix of Host-Country and The Mix of Host-Country and Expatriate EmployeesExpatriate Employees

Sufficient local talent is not available Part of firm’s overall business strategy is

to create a corporate-wide global vision International units and domestic

operations are highly interdependent The political situation is unstable Are significant cultural differences

between the host and home countries



20–40% failure rate for U.S. expatriates 3–4 times higher than Europeans or Asians

Challenges of Expatriate Challenges of Expatriate AssignmentsAssignments

Many reasons assignments end in failure Career blockage Culture shock Lack of predeparture cross-culture training Overemphasis on technical qualifications Getting rid of a troublesome employee Family problems



Difficulties on Return

Challenges of Expatriate Challenges of Expatriate AssignmentsAssignments

Lack of respect of acquired skills

Loss of status Poor planning for

return position Reverse culture

shock



Selection Emphasize cultural sensitivity as a

selection criterion Establish a selection board of expatriates Require previous international experience Consider hiring foreign-born employees

who can serve as future expatriates Screen candidates’ spouses and families Develop an effective selection program for

expatriates and the locals who help

Using HRM to Effectively Manage Using HRM to Effectively Manage ExpatriatesExpatriates



TrainingTraining

Should begin 9–12 months in advance of the assignment

At least some training should go to the expatriate’s family

Are three approaches to training: Information-giving approach Affective approach Impression approach

Local managers need to be prepared to train incoming expatriates



Career DevelopmentCareer Development

Position the international assignment as a step toward advancement within the firm

Provide support for expatriates

Provide career support for spouse



CompensationCompensation

Provide a disposable income equivalent to what the expatriate would receive at home

Provide an explicit “add-on” incentive for accepting an international posting

Don’t put expatriates in the same jobs held by locals or lower-ranking jobs

Calculating compensation for expatriates is very difficult Fluctuating exchange rates Cost of living varies tremendously



Role of HR Department

Women and International Assignments

Using HRM to Effectively Manage Using HRM to Effectively Manage ExpatriatesExpatriates



Western-style management likely to clash with foreign norms and values

Must mold practices to culture

Developing HRM Policies in a Global Developing HRM Policies in a Global ContextContext

Hofstede’s 5 Dimensions of Culture Power distance Individualism Uncertainty avoidance Masculinity/femininity Long-term/short-term orientation



EEO prohibition of discrimination based on age, sex, race, etc. apply to international assignments too

Foreign national employees of U.S. companies working outside the US are not covered by U.S. employment law

Immigration and Control Act (1986) Non-U.S. citizens living and working in

the U.S. May not be discriminated against

EEO in the International ContextEEO in the International Context



“National culture” may be an elusive concept

Culture changes over time Companies sometimes blame international

personnel problems on culture without study Virtually no data on the success/failure of

HRM practices as a function of culture Different cultures often have very different

notions of right and wrong The business laws of other countries often

force companies to change their practices

Developing HRM Policies: CaveatsDeveloping HRM Policies: Caveats



Key impediments to exporting: Lack of knowledge about international

markets, business practices, and competition

Lack of management commitment to generating international sales

Impediments can be attributed to lack of utilization of human resources

Human Resource Management and Human Resource Management and Exporting FirmsExporting Firms



Ethics and Social Responsibility Many ethical dilemmas face expatriates Ethical and legal are not the same

Foreign Corrupt Practices Act (1977)

Other International HR Other International HR ConsiderationsConsiderations

Political Risk Possibility that social or government

pressures negatively impact operations

Expatriates often caught in middleo Should understand political situation



Are five stages of international involvement Are three approaches to managing foreign

ops Ethnocentric, polycentric and geocentric

Emphasize cultural sensitivity when selecting people for international assignments

Position international assignments as step towards advancement in the firm

Don’t transfer home HRM practices abroad Reinforce export activities with HR practices

Summary and ConclusionsSummary and Conclusions


© 2010 by Prentice Hall 17-1 International HRM Challenge Chapter 17 Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall.

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