International HR 1

Globalization Forces for Globalization Free Trade (EU, NAFTA, WTO) Free Trade (EU, NAFTA, WTO) Political and economic liberalization Political and economic liberalization Decreased cost of transportation Decreased cost of transportation Increase effectiveness of communication technologies Increase effectiveness of communication technologies People moving between countries in addition to goods State Department: At least 2 million American citizens work abroad State Department: At least 2 million American citizens work abroad Foreign companies account for about: Foreign companies account for about: 6 percent of the U.S. workforce 15 percent of manufacturing employees 8/6/02 Washington Post Over the past 30 years, imports of goods to the United States, and exports of American-made goods abroad, have increased to from 8% to 18% of gross domestic product. 10/12/02 Washington Post

Stages of Internationalization Domestic production Begin exporting products Start international operations (Need for expatriates) Have operations in several countries (Multinational) International integration (Transnational)

Types of Organizations

International Companies And the World Economy Their production and distribution extend beyond national boundaries, making it easier to transfer technology. They have direct investments in many countries, affecting the balance of payments. They have a political impact that leads to cooperation among countries and to the breaking down of barriers of nationalism.

The Global Environment And Management Unified Economies Closely partnered nations such as the European Union (EU) have developed into strong competitors. Closely partnered nations such as the European Union (EU) have developed into strong competitors. Promotes job growth in trading nations. Promotes job growth in trading nations. Cultural Environment The communication patterns, religion, values and ideologies, education, and social structure of a host country influence how HR is conducted in that country. The communication patterns, religion, values and ideologies, education, and social structure of a host country influence how HR is conducted in that country.

Cultural Environment of International Business

Issues in International HR Success in International Markets Identifying and partnering with local talent Identifying and partnering with local talent Managing Expatriates Moving employees between countries Moving employees between countries Different Legal Environments Understanding laws which impact your business Understanding laws which impact your business Protecting workers Protecting workers Work councils Work councils Layoff restrictions Layoff restrictions Personal information restrictions Personal information restrictions Treatment of rewards, options, etc. Treatment of rewards, options, etc.

Domestic versus International HRM Issues in international HRM in helping employees adapt to a new and different environment outside their own country: Relocation Relocation Orientation Orientation Translation services Translation services

International Staffing Expatriates, or Home-country Nationals Employees from the home country who are on international assignment. Employees from the home country who are on international assignment. Host-country Nationals Employees who are natives of the host country. Employees who are natives of the host country. Third-country Nationals Employees who are natives of a country other than the home country or the host country. Employees who are natives of a country other than the home country or the host country.

Changes in International Staffing over Time

Hiring Host-Country Nationals Advantages: 1. Hiring local citizens is generally less costly than relocating expatriates. 2. Since local governments usually want good jobs for their citizens, foreign employers may be required to hire locally. 3. Most customers want to do business with companies they perceive to be local versus foreign.

When to Use Locals?

When to use Expatriates?

Selecting and Preparing ExPats Selection Emphasize cultural sensitivity as a selection criteria Emphasize cultural sensitivity as a selection criteria Establish a selection board of expatriates Establish a selection board of expatriates Require previous international experience Require previous international experience Hire foreign-born employees who can serve as “expatriates” Screen candidates’ spouses and families Hire foreign-born employees who can serve as “expatriates” Screen candidates’ spouses and familiesTraining Cultural protocols Cultural protocols Religion Religion Language Language Country and politics Country and politics

Expatriate Challenges Career Blockage Many feel that the home office has forgotten them and that their career has been sidetracked Many feel that the home office has forgotten them and that their career has been sidetracked Culture Shock Many people who take international assignments cannot adjust to a different cultural environment Many people who take international assignments cannot adjust to a different cultural environment Lack of Predeparture Cross-Cultural Training Only one-third of MNCs provide cross-cultural training Only one-third of MNCs provide cross-cultural training Overemphasis on Technical Qualifications Getting Rid of a Troublesome Employee Family Problems Loss of Status on Return

Recruiting Internationally Work Permit, or Visa Government document granting a foreign individual the right to seek employment. Government document granting a foreign individual the right to seek employment. Guest Workers Foreign workers invited to perform needed labor. Foreign workers invited to perform needed labor.

Skills of Expatriate Managers CORE SKILLS Experience Decision-making Resourcefulness Strategic thinking Adaptability Cultural sensitivity Change management Team building Maturity AUGMENTED SKILLS Technical skills Negotiation skills Strategic thinking Delegation skills Change management

EEO in the International Context U.S. EEO law applies to international assignments. Under the Immigration Control and Reform Act of 1986, people who are not U.S. citizens but who are living and have legal work status in the United States may not be discriminated against. Foreign national employees of U.S. companies in their own country or in some other foreign country are not covered by U.S. employment law.