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  • Copyright 2014 Pearson Education, Inc. 9-1

  • Chapter Learning Goals

    1. Understand the strategic importance to the firm of the IHRM function and its various responsibilities.

    2. Learn about the major staffing options for global operations and the factors involved in those choices.

    3. To appreciate the challenges involved in staffing operations in emerging market countries

    9-2 Copyright 2014 Pearson Education, Inc.

  • Chapter Learning Goals

    4. Emphasize the need for managing the performance of expatriates through careful selection, training, and compensation.

    5. Discuss the role of host country managers and the need for their training and appropriate compensation package.

    6. Distinguish among various IHRM practices around the world.

    9-3 Copyright 2014 Pearson Education, Inc.

  • Opening Profile: Staffing Company Operations in Emerging Markets

    9-4 Copyright 2014 Pearson Education, Inc.

    BRIC Countries

  • Copyright 2014 Pearson Education, Inc. 9-5

    Chapter Learning Goals

    Understand the strategic importance to the firm of the IHRM function and its various responsibilities.

  • Copyright 2014 Pearson Education, Inc. 9-6

    Opening Profile: BRICThe Shortage of Mid/Upper-Level Managers

  • Opening Profile: What Attracts the Potential Recruits in Emerging Markets?

    9-7 Copyright 2014 Pearson Education, Inc.

  • Copyright 2014 Pearson Education, Inc. 9-8

    Major Challenges in IHRM

    1. Enhancing global business strategy 2. Aligning HR issues with business

    strategy 3. Designing and leading change 4. Building global corporate cultures 5. Staffing organizations with global

    leaders

  • IHRM Functions

    9-9 Copyright 2014 Pearson Education, Inc.

  • Copyright 2014 Pearson Education, Inc. 9-10

    Chapter Learning Goals

    Learn about the major staffing options for global operations and the factors involved in those choices.

  • Staffing for Global Operations

    Ethnocentric Approach Polycentric Approach

    Copyright 2014 Pearson Education, Inc. 9-11

    ! Used at internationalization stage of strategic expansion, with centralized structure

    ! Parent-country nationals (PCNs)

    ! Often used with multinational strategy

    ! Host-country nationals (HCNs)

  • Staffing for Global Operations

    Global Staffing Approach Regiocentric Approach

    Copyright 2014 Pearson Education, Inc. 9-12

    ! Third country nationals (TCNs)

    ! Transpatriates ! Inpatriates: managers

    with global experience who are transferred to the organizations headquarters country

    ! Can produce a mix of PCNs, HCNs, and TCNs

  • Strategic Mode, Organizational Variables, and Staffing Orientation

    Aspect of enterprise Ethnocentric Polycentric Regiocentric Global

    Strategic orientation International Multidomestic Regional Transnational

    PerpetuationExpatriates used for key positions

    Locals used for key positions locally

    Regional people used regionally

    Best people used anywhere

    Evaluation and control

    Home standards applied

    Determined locally

    Determined regionally

    Globally integrated

    RewardsHigh at home; low in subsidiaries

    Wide variation

    Based on contribution to regional objectives

    Based on contribution to local and worldwide objectives

    9-10 Copyright 2014 Pearson Education, Inc.

  • Copyright 2014 Pearson Education, Inc. publishing as Prentice Hall 9-14

    Chapter Learning Goals

    To appreciate the challenges involved in staffing operations in emerging market countries

  • Copyright 2014 Pearson Education, Inc. 9-15

    MNC Staffing

    ! Most MNCs start from their own pool of managers ! polycentric or regiocentric policy: ! Increasing pressure from local governments to

    hire locals ! The greater cost of expatriate staffing ! Improvement in managerial and technical

    competence ! all things being equal, a local national who

    speaks the language, understands the culture and the political system, and is often a member of the local elite should be more effective than an expatriate alien

  • Copyright 2014 Pearson Education, Inc. 9-16

    Global Mind-set Attributes for Successful Expatriates

    ! Intellectual capital !Psychological capital !Social capital

  • Copyright 2014 Pearson Education, Inc. 9-17

    Chapter Learning Goals

    Emphasize the need for managing the performance of expatriates through careful selection, training, and compensation.

  • Managing Expatriates: Selection

    9-18 Copyright 2014 Pearson Education, Inc.

    Success categories

  • Managing Expatriates: Selection

    9-19 Copyright 2014 Pearson Education, Inc.

    Predictors of success

  • Expatriates Performance Management

    9-20 Copyright 2014 Pearson Education, Inc.

  • Expatriates Performance Management

    9-21 Copyright 2014 Pearson Education, Inc.

  • Expatriate Training and Development

    9-22 Copyright 2014 Pearson Education, Inc.

  • Expatriate Training and Development

    9-23 Copyright 2014 Pearson Education, Inc.

  • IHRM Process to Maximize Effectiveness of Expatriate Assignments

    Copyright 2014 Pearson Education, Inc. 9-24

    To improve IHRM process

  • Cross-Cultural Training

    9-25 Copyright 2014 Pearson Education, Inc.

  • Copyright 2014 Pearson Education, Inc. 9-26

    Culture Shock

    1. Honeymoon 2. Irritation and hostility 3. Gradual adjustment 4. Biculturalism

  • Training Techniques

    9-27 Copyright 2014 Pearson Education, Inc.

  • Corporate Programs to Develop Global Managers

    9-28 Copyright 2014 Pearson Education, Inc.

  • Integrating Training with Global Orientation

    Export Stage Multidomestic Stage

    Copyright 2014 Pearson Education, Inc. 9-29

    ! Training need: low to moderate

    ! Content: interpersonal skills, culture, customer values, business behavior

    ! HCNs: train to understand parent-country products and policies

    ! Training need: moderate to high

    ! Content: interpersonal skills, culture, technology transfer, business practices and laws

    ! HCNs: familiarize with production and service procedures

  • Integrating Training with Global Orientation

    Multinational Stage Global Stage

    Copyright 2014 Pearson Education, Inc. 9-30

    ! Training need: high moderate to high

    ! Content: interpersonal skills, two-way technology transfer, corporate value transfer, strategy, stress management, culture, business practices

    ! HCNs: training in technical areas, products and services, corporate culture

    ! Training need: high ! Content: global corporate

    operations, corporate culture transfer, customers, global competitors, strategy

    ! HCNs: training in proficiency in production and efficiency systems, corporate culture, business systems, global conduct policies

  • Factors that Influence the Integration of Expatriates with Local Staff

    Facilitates Integration Hinders Integration

    Copyright 2014 Pearson Education, Inc. 9-31

    ! Forming close working relationships

    ! Learning local language ! Transferring technical/

    business knowledge ! Cultural adaptability ! Respect

    ! Not using team concept ! Not learning local

    language ! HQ mentality ! Spouse/family adjustment

    problems ! Being autocratic ! Limited time in assignment

  • Copyright 2014 Pearson Education, Inc. 9-32

    Chapter Learning Goals

    Discuss the role of host country managers and the need for their training and appropriate compensation package.

  • Compensating Expatriates

    Copyright 2014 Pearson Education, Inc. 9-33

    ! DuPonts Global Transfer Center of Expertise creates perceptions of equity and goodwill.

    ! Companies are looking for ways to cut the costs of expatriate assignments.

    ! The need to reconcile parent- and host-country practices adds complexity.

    ! The balance sheet approach

    ! Tax equalization

    ! Components of the compensation package: salary, taxes, allowance, benefits

  • Components of the Compensation Package

    9-34 Copyright 2014 Pearson Education, Inc.

  • Copyright 2014 Pearson Education, Inc. 9-35

    Exhibit 9-10

  • Copyright 2014 Pearson Education, Inc. 9-36

    Chapter Learning Goals

    Distinguish among various IHRM practices around the world.

  • Training HCNs

    ! Facilitates indigenization

    ! Links successful corporate culture and local culture

    ! Facilitates e-business adoption

    9-37 Copyright 2014 Pearson Education, Inc.

  • Management Focus: Success! Starbucks Java Style in Beijing

    ! Challenges: recruiting, motivating, and retaining Beijing managers

    ! Chinese recruits want training and advancement opportunities more than money.

    9-38 Copyright 2014 Pearson Education, Inc.

  • Management Focus: Success! Starbucks Java Style in Beijing

    ! Recruits are trained in management and in Starbucks culture !Three months in Seattle !Make coffees in a real store

    ! Training, and resulting trust and participation, also serve as motivators

    9-39 Copyright 2014 Pearson Education, Inc.

  • Compensating HCNs

    9-40 Copyright 2014 Pearson Education, Inc.

  • Comparative Management in Focus: Compensation

    Best Practices

    Regional Clusters

    Country Specific

    Incentives not too large, pay based on individual performance, reduce seniority pay

    Asian and Latin countries use more seniority pay, group/team pay, and pay for future goals

    United States uses less incentives than expected, China and Taiwan use more

    9-41 Copyright 2014 Pearson Education, Inc.

  • Comparative Management in Focus: Selection

    Best Practices

    Regional Clusters

    Country Specific

    Getting along with others and Fit with corporate values

    Anglo cluster focuses on technical skill, work experience; Korea, Japan, and Taiwan deemphasize work experience

    Japan looks at a persons potential; Korea relies on employment tests; Taiwan relies on interviews

    9-42 Copyright 2014 Pearson Education, Inc.

  • Copyright 2014 Pearson Education, Inc. 9-43

    Conclusion

    ! Global HR management = vital component of global strategy

    ! Strategies = ethnocentric, polycentric, regio-centric, and global

    ! Many causes of ex-pat failure: inadequate preparation, inability to adapt, lack of HQ support for repatriation, etc.

    ! Cultural training, language instruction, familiarity with everyday matters ! training is needed

    ! Compensation must be carefully designed

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    United States of America.

    Copyright 2014 Pearson Education, Inc.