IHRM: Sustaining international business operations

IHRM: Sustaining international business operations

Approaches to staffing

• Factors affecting approaches to staffing– General staffing policy on key positions at

headquarters and subsidiaries• Ethnocentric• Polycentric• Geocentric• Regiocentric

– Constraints placed by host government– Staff availability

Ethnocentric

• Strategic decisions are made at headquarters

• Limited subsidiary autonomy

• Key positions in domestic and foreign operations are held by headquarters’ personnel; PCNs manage subsidiaries

Polycentric

• Each subsidiary is a distinct national entity with some decision-making autonomy

• HCNs manage subsidiaries who are seldom promoted to HQ positions

• PCNs rarely transferred to subsidiary positions

Geocentric

• A global approach - worldwide integration

• View that each part of the organization makes a unique contribution

• Nationality ignored in favour of ability:– Best person for the job– Colour of passport does not matter when it

comes to rewards, promotion and development

Figure 3-1: Geocentric staffing requirements

Regiocentric

• Reflects a regional strategy and structure

• Regional autonomy in decision making

• Staff move within the designated region, rather than globally– Staff transfers between regions are rare

Table 3-1: The advantages and disadvantages of using PCNs, TCNs and HCNs

Figure 3-2: Determinants of IHRM approaches and activities

Reasons for international assignments

• Position filling– Eg. Skills gap, launch of new endeavour, technology

transfer

• Management development– Training and development purposes, assisting in

developing common corporate values

• Organizational development– Need for control, transfer of knowledge, competence,

procedures and practices

Types of international assignments

• Short term – Up to 3 months

• Extended– Up to 1 year

• Long term– Varies from 1 to 5 years– The traditional expatriate assignment

Non-standard assignments

• Commuter assignments• Rotational assignments• Contractual assignments• Virtual assignmentsSome of these arrangements assist in overcoming the high cost of international assignments but are not always effective substitutes for the traditional expatriate assignment

Figure 3-3: Factors influencing virtual assignments

Roles of an expatriate

• Agent of direct control

• Agent of socialization

• Network builder

• Boundary spanner

• Language node

• Transfer of competence and knowledge

Figure 3-4: The roles of an expatriate

The role of non-expatriates

• People who travel internationally yet are not considered expatriates as they do not relocate to another country– Road warriors, globetrotters, frequent fliers

• Much of international business involves visits to foreign locations, eg. – Sales staff attending trade fairs– Periodic visits to foreign operations

A glamorous life?

• International business travelers cite the positives as:– Excitement and thrills of conducting business

deals in foreign locations– Life style (top hotels, duty-free shopping,

business class travel)– General exotic nature

But a high level of stress!

• Home and family issues – frequent absences • Work arrangements – domestic side of

position still has to be attended to• Travel logistics – waiting in airports, etc.• Health concerns – poor diet, lack of sleep, etc.• Host culture issues – limited cultural training

Table 3-2: Various roles of corporate HR

The role of the corporate HR function

• Can we manage our people like a global product? The feasibility of:– The concept of a global internal labour market– Standardization of work practices and HR

activities

• What HR matters require central control and what can be decentralized?