McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved.

McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved. CHAPTER Global Human Resource Management

McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved. Key Issues What are the pros and cons of different approaches to staffing policy in international business? Why do managers fail in foreign postings? How can such managers be helped to succeed? What is the role of training, management development, and compensation practices in managing international human resources? Slide 15-1

McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved. Human Resource Management Activities carried out by a firm to use its human resource effectively –Staffing, management development, performance evaluation, compensation Across national borders the process increases in complexity –Environmental differences of: labor markets, culture, legal systems, economic systems –HR differences: compensation practices, labor laws, motivation issues Slide 15-2

McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved. Staffing and International Strategy Slide 15-3

McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved. Expatriate Managers Managers assigned to to unit in country other than that of their national origin High failure rates for US MNCs (in order of importance) Spouse cannot adjust culturally Manager cannot adjust culturally Other family adjustment problems Manager’s lack of personal or emotional maturity Manager’s inability to cope with broader responsibility overseas Slide 15-4

McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved. Expatriate Managers High failure rates for Japanese firms (in order of importance) Manager’s inability to cope with broader responsibility overseas Manager cannot adjust culturally Manager’s lack of personal or emotional maturity Lack of technical competence Spouse cannot adjust culturally Slide 15-5

McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved. Expatriate Success Predictors Self-orientation –Strengthen self-esteem, self-confidence, mental well-being –Adapt to food, music, sport, outside interests –Superior technical competency Others-orientation –Enhance ability to interact effectively with host nationals –Relationship development, willingness to communicate Perceptual ability –Understand why people in other countries behave the way they do –Non-judgmental, non-evaluative in interpreting others’ behavior Cultural toughness –How tough is host culture to adjust to? Mendenhall and Oddou Slide 15-6

McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved. Career Development for Expatriates Pre-departure, on-site training –Cultural training –Language training –Practical training Repatriation –Many repatriating expatriates lost to MNCs because suitable positions not available at home –Autonomy, span of control, compensation –Repatriation strategy failure makes recruitment of competent expatriates difficult Slide 15-7

McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved. Other Expatriate Issues Performance appraisal –Two groups with conflicting perspectives/cultures appraise the expatriate: home managers, host managers Compensation –Different national standards –Expatriate pay issues: base pay, cost-of-living, housing, education, hardship, foreign-service-premium, double- taxation, medical/pension benefits, home leave Slide 15-8

McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved. Other IHRM Issues International labor relations –Concerns of organized labor: cultural and legal differences affect attitudes towards... Better pay, job security, working conditions Bargaining power with management –Strategy of organized labor Establish international, cross-border labor organizations Lobby national governments to restrict MNC activities –Approach to labor relations Degree to which MNC labor relations are centralized or decentralized (integration vs responsiveness…) Slide 15-9