International human resource management

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International human resource management:

International human resource management Chapter 1- introduction The enduring context of IHRM The organisational context Chapter 2-IHRM-sustaining international business operations Chapter 3- recruiting and selecting staff for international assignment Chapter 3-training and development Chapter 4-compensation Chapter 5-re entry and career issues

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Chapter 6-global hr issues HRM in the host country context Industrial relations Performance management IHRM trends and future challenges cases and exercises

The multinational context introduction-the enduring context of IHRM:

The multinational context introduction-the enduring context of IHRM HRM refers to those activities undertaken by an organisation to utilize its human resources effectively. Human resource planning Staffing(recruitment, selection, placement) Performance management Training and development Compensation Industrial relations

A model of HRM:

A model of HRM

What is an expatriate:

What is an expatriate He is an employee who is working and temporarily residing in a foreign country. Some firms prefer to call such employees “international assignees”.

International assignment create expatriates:

International assignment create expatriates

Variables that moderate differences between domestic and international IHRM:

Variables that moderate differences between domestic and international IHRM

Reliance of the multinational on its home country domestic market:

Reliance of the multinational on its home country domestic market Top 10 multinationals Rio tinto ( uk , australia ) Thompson corporations( canada ) ABB SWITZERLAND Nestle( switzerland ) British american tobacco(UK) ELECTROLUX(Sweden) Interbrew ( belgium ) Anglo american (UK) ASTRAZENECA(UK) PHILIPS ELECTRONICS( THE Netherlands)

Factors influencing the global work environment:

Factors influencing the global work environment

The organisation context:

The organisation context

The path to globalisation:

The path to globalisation

Export department:

Export department

Sales subsidiary:

Sales subsidiary As the firm develops expertise in foreign markets, agents and distributors are often replaced by direct sales with the establishment of sales subsidiaries or branch offices in the foreign market countries.

international division :

international division HR activities are confined to supervising the selection of staff for the new international devision . As the firm firm expands its foreign workforce accompanied by the growth in the no of expatriates, more formal hr policies become necessary.

Global product –area devision:

Global product –area devision As the result of these various forces for change, the multinationals confronts 2 major issues of Structure. The extent to which the key decisions has to made at thhe parent co, or at the subsidiary units. The type or form of control exerted by the parent co over the subsidiary unit

The networked organisation:

The networked organisation



Linking operation mode and IHRM:

Linking operation mode and IHRM

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MODES OF OPERATION Variety Franchising Management contracts Joint ventures IHRM Staff placement training

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Management contracts They involve a management role in the foreign country for a specified period of time and fee. And therefore require the posting of staff for extended periods of time. For ex; walt disney .

Interfirm linkages:

Interfirm linkages It is an alliance, a form of business relationship that Involves interfirm integration that goes beyond the traditional buyer and seller relationship. Stops short of a full merger or acquisition through some alliances can develop into mergers or take over at a later date. Linkages depends upon the particular type of ventures and extent to which the parent seeks control over the resources alloted to the ventures.

Mergers and acquisition:

Mergers and acquisition Acc to UNCAD(UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT), acqusition is the preferred mode of entry by firms from developed countries towards other developed country. ex: hawlet packard , compaq .

IHRM: sustaining international business operations:

IHRM: sustaining international business operations Chapter objectives Issues relating to the various approaches to staffing foreign operations Reasons for using international assignments Position filling Management development Organisation development Types of international assignment Short term Long term Non standard arrangements: commuter,rotator , contractual, virtual Role of expatriates The role of corparate hr function

Approaches to staffing:

Approaches to staffing Influencing factors Its general staffing policy on key position in HQ and subsidiaries The constraints placed by the government on hiring policies Staff availibility


Ethnocentric Few foreign subsidiaries have any autonomy and strategic decisions are made at HQ. key position in domestic and foreign operations are held by HQ personnel. Subsidiaries are managed by staff from the home countries.

Key points:

Key points A lack of host country nationals The need to maintain good communication, coordination and control links with corporate HQ.




polycentric MNE treats each subsidiary as a distinct national entity with some decision making autonomy . Parent co are rarely transferred to foreign subsidiary operations. Some of the advantages Are Remove the need for expensive cultural awareness training programme.employment of HCN is less expensive avoids the turn over of key managers

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Disadvantages 1.Personnel value differences and differences in attitude to busines 2.Fewer oppurtunities to managers results in limited exposure to international operations 3. This will constrain strategic decision making and resource allocation.


Geocentric Here the MNE is taking a global approach to its Operation, recognising that each part makes a unique contribution with its unique competence. advantages 1.Helps in developing international executive team which assists in developing a global perspective and internal pool of labor 2.It supports cooperation and resource sharing across units.

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Disadvantages Host govt want a high no of their citizens employed. Adequate skills are unavailable Providing extensive documents can be time consuming Increased in the cost of training and relocation cost

Geocentric staffing requirements:

Geocentric staffing requirements


Regiocentric This approach reflects the geographic strategy and structure of the multinational.staff may move outside the countries but only within the particular geographic are. Advantages It allows interaction between executives transferred to regional head quarters. It can be a way for a multinational. Disadvantages It can constrain the organisation from taking a global stance It only moves barrier to the regional level.

Determinants of IHRM approaches and activities:

Determinants of IHRM approaches and activities


REASONS FOR INTERNATIONAL ASSIGNMENTS Position filling: Japan relying on short term assignees. Management development:The perceived link between international experiences and career development can be a motivation for staff to agree to such transfers Organisation development: “ To create a truly global organisation one has to embed a culture of cross border mobility into the organisation genetic code, which will take 10 years”.



Non standard assignments:

Non standard assignments Commuter assignments- arrangements where the person concerned commutes from the home country on a weekly or bi- weekly basis to the place of work in another country. For ex:person lives in london , works in moscow Rotational assignments-employees commute from the home country to a place of work in another country for a short, set period followed by a break in the home country.

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3. Contractual assignments- used in situation where employees with specific skills vital to an international projects are assigned for a limited duration of 6-12 months. For ex: research and development team. 4. Virtual assignments: where the employee does not relocate to a host location but manages, from home base, international responsibilities for a part of the organisation in another country.

Factors influencing virtual assignments:

Factors influencing virtual assignments

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Real and virtual presence Role conflict Identification Interpersonal relations Communication medium

The roles of an expatriate:

The roles of an expatriate

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Roles of an expatriate Agent of direct control Agent of socialisation Network builders Boundary spanners Expatriates as language nodes

The role of the corporate HR FUNCTION:

The role of the corporate HR FUNCTION Centralized hr companies Decentralized hr companies 1.Large hr departments 2.Key role management of high grade management positions world wide 3.Key activities:planning international assignments and performance management globally 4.Identifying high potential staff 1.Small hr departments 2. Key role managing elite corporate managers 3.Key activities: influencing operating units to support international assignments 4. Supporting decentralized hr

Transition HR companies:

Transition HR companies Medium sized HR companies Key role- management and career development of senior managers and expatriates Key activities: strategic staffing

Managing and supporting international assignments:

Managing and supporting international assignments

Recruiting and selecting staff for international assignments:

Recruiting and selecting staff for international assignments Chapter objectives 1.The myth of the global manager 2.The debate surrounding expatriate failure Factors moderating intent to stay or leave the international assignment 3. Selection of criteria for international assignments 4. Dual career couples 5. Are female expatriates different?

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>Recruitment is defined as searching for and obtaining potential job candidates in sufficient numbers and quality so that the organisation can select the most appropriate people to fill its job needs. >Selection is the process of gathering information for the purpose of evaluating and deciding who should be employed in particular jobs.

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Difference between domestic and inter national staffing who should hold key position in HQ and subsidiaries(ethnocentric, polycentric,regiocentric,geocentric )

Issues in staff selection:

Issues in staff selection The myth of global managers Myth 1:there is universal approach to Management Myth 2:people can acquire multicultural adaptibility and behaviors Myth 3: there are common characteristics shared by successful international managers. Myth 4: there are no impediments to mobility

Current expatriate profile:

Current expatriate profile Category PCN HCN(16%) TCN(42%) Gender male(82%) female(18%) Age(years) 30- 49(60%) 20-29(17%) Marital status married(65%) single(26%) accompanied by spouse(86%) partner(9%) Duration 1-3 ys (52%) children(55% Location within Europe(35%) short term9 Primary reasons fill a position Prior international experience 30% within Asia



The phases of cultural adjustment:

The phases of cultural adjustment

Selection criteria:

Selection criteria

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Dual –career couples Finding alternative arrangements Making assignments more family friendly Inter company networking Job hunting assistance Intra company employment On-assignment career support

Are female expatriate different?:

Are female expatriate different? External barriers Self established barriers Hr managers reluctant to select female candidates Culturally tough locations or regions predude female expatriates Stereotypes in their minds that influence decision Some women have limited willingness to relocate The dual carreer couple Behaving acc to gender based role models

Training and development:

Training and development Chapter objectives The role of expatriates in supporting expatriate adjustment and on assignment performance The effectiveness of pre departure training Training and developing international business career paths

International training and development:

International training and development

Cross cultural training model:

Cross cultural training model

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Information giving approach Area briefings Cultural briefings Films/books/videos Survival-language level Affective approach Culture training Role playing Cases Stress reduction training Immersion approach Assessment centre Field experiments Extensive language training

Cultural awareness training and assignment performance:

Cultural awareness training and assignment performance

The impact of language on power:

The impact of language on power

Developing international teams through international assignments:

Developing international teams through international assignments


compensation Chapter objectives Complexities arising due to the movement of domestic level to international level Key components of an international compensation program Approaches, advantages, disadvantages Taxation , living cost data Global compensation issues

Objectives of international compensation:

Objectives of international compensation The policy should be consistant with the overall strategy, structure and business needs of the multinational Attract and retain staff The policy should facilitate the transfer of international employees in the most effective manner for the firm The policy must give due consideration to equity and ease of administration

Key components of an international compensation program:

Key components of an international compensation program

Approaches to international compensation:

Approaches to international compensation Going rate approach Based on local market rates Relies on survey comparison -local nationals -expatriates of same nationality -expatriates of all nationality Compensation based on selected survey comparisons Base pay and benefits may be supplemented additional payments for low pay countries

Advantages and disadvantages:

Advantages and disadvantages advantages disadvantages Equality with local nationals Identification with host country Equity among different nationalities Variation between assignments for same employee Variation between expatriates of same nationality in different countries Potential re entry problems

The balance sheet approach expatriate compensation worksheet:

The balance sheet approach expatriate compensation worksheet Employee Antony Position marketing manager Country Europe Reason for change new assignment Effective date of change 1 feb 2009

Expatriate compensation work sheet:

Expatriate compensation work sheet Item amount in dollars in local currency Base salary Cost of living allowance Overseas service premium Hardship allowance Housing deduction Tax deduction Total

Patterns for international pay:

Patterns for international pay

Re entry and career issues:

Re entry and career issues Chapter objectives The process of re entry Job related issues Social, family factors that affect re entry and work adjustment Multinational responses Designing a programme

The repatriation process expatriation includes repatriation:

The repatriation process expatriation includes repatriation

The repatriation process:

The repatriation process

Individual reactions to re entry:

Individual reactions to re entry Career anxiety No post assignment guarantee for assignment A fear that the period overseas has caused a loss of visibility and isolation Changes in the home work place Re entry position Devaluating the overseas experience Coping with new role demands Loss of status and pay Social and family factors

The repatriates role:

The repatriates role

The readjustment challenge:

The readjustment challenge

Topics covered by a repatriation program:

Topics covered by a repatriation program

Global HR issues:

Global HR issues

HRM in the host country context:

HRM in the host country context Chapter objectives >Role of HR including host country culture and work place environment, mode of operation, firm size, international experience. retaining, developing the local staff Training and development of language skills Monitoring HR practices used by foreign sub contrcts .

The linkage between culture and behavior:

The linkage between culture and behavior

Factors influencing standardization of work practices:

Factors influencing standardization of work practices

HR implications of language standardisation:

HR implications of language standardisation

Structure of language based companies:

Structure of language based companies


CASES Uniliver’s Indian experience- IHRM in action case- re entry problem Citibank plans for changing staffing needs Happy to be going home Advice for companies going global

Industrial relations:

Industrial relations Chapter objectives Key issues in industrial relations and the policies and practices of multinationals Potential constraints that trade union may have on multinationals Outline key concerns for trade unions Recent trends and issues in the global workforce context Formation of regional economic zone such as European Union


exercises Trade union structure in leading western industrial societies Advice for companies going global Percentage of those employment who were trade union members

Key issues in international industrial relations:

Key issues in international industrial relations Industrial relations policies and practices of multinational firms The degree of inter-subsidiary production integration Nationality of ownership of the subsidiary IHRM approach MNE prior experience in industrial relations Subsidiary characteristics Characteristics of the home market Management attitude towards trade union Industrial disputes

Trade unions and international relations:

Trade unions and international relations Trade unions may limit the strategic choices of multinationals in 3 ways Influencing wage level Constraining the ability of multinationals to vary employment levels at will Preventing global integration of the operations of multinationals

The responses of trade unions to multinationals:

The responses of trade unions to multinationals Alternative sources of supply The ability to move production facilities to other countries A remote locus of authority(corporate HO) Production countries in many countries Superior knowledge and expertise in industrial relations The capacity to stage an investment strike, there by the present plant becomes obsolete and economically non- competive .


assignment Regional integration :The European Union The issue of social dumping and the impact of digital economy

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