HRM for MBA Students Lecture 11 HRM in international companies

Learning outcomes An understanding of: –the different approaches to HRM that may be possible in multinational companies (MNCs) –Hofstede’s concept of dimensions of culture and what these can tell us about managing people in the interface between national and organisational culture –the complexity inherent in selecting, preparing and supporting personnel for expatriate assignments

International human resource management (IHRM) The process of employing and developing people in international organisations which operate … globally Armstrong (2003)

Approaches to IHRM Ethnocentric Polycentric Regiocentric Geocentric Perlmutter (1969)

National cultures (Hofstede) Basic dimensions of the differences between national cultures –Power-distance –Uncertainty avoidance –Individualism/collectivism –Masculinity/femininity (or quantity of life versus quality of life ) –Long-term versus short-term orientation

Trust and leadership (Tayeb) Trust –The level of trust in other people’s good intentions varies widely between cultures –Managers will only delegate power to subordinates whom they trust Do they have the required knowledge and competence to do the task? Will they put the company's interests first?

Leadership –Preference for leadership styles varies across cultures People in cultures which have low tolerance for ambiguity and risk-taking tend to prefer major decisions to be taken by their leaders (‘benevolent autocrats’) Those in cultures with a higher tolerance for ambiguity prefer to participate in decisions

Selecting expatriates Personality traits –Ability to tolerate ambiguity; behavioural flexibility; ability to be non-judgmental; level of cultural empathy and ethnocentrism Interpersonal skills Motivational state –Belief in mission; congruence of assignment with career path; interest in overseas experience; interest in host-country culture; willingness to learn new behaviour patterns and attitudes Family situation –Willingness of partner to live overseas; adaptability and supportiveness of partner; stability of relationship with partner Language skills –Host-country language ability

Expatriate re-entry General cultural readjustment –Feelings of cultural and social loss –Children may experience difficulties in readjusting to school –There may be unexpected financial difficulties in reverting to domestic salary levels –All these can result in marital strain

Expatriate re-entry (Cont.) Job readjustment –Returning expatriates may feel isolated from changes which have occurred during their foreign assignment –They may feel that they have fallen behind with new technology –They may feel that they have missed promotion opportunities –If they enjoyed a higher level of authority and responsibility while on their foreign assignment, they may find it difficult to go back to their former role –All these difficulties mean that many returning expatriates are vulnerable to feelings of demotivation and are more likely to accept offers from other organisations

Criteria for successful expatriate reintegration Returning expatriates should: – perform at a level and quality expected by their managers – exhibit a reasonable level of job satisfaction with the new position – be able to use the skills developed during the foreign assignment – be able to maintain a career progression comparable to cohorts who did not go abroad – remain with the employer for a reasonable period of time after returning – avoid dysfunctional levels of stress during re-entry.

Factors for successful expatriate reintegration The similarity of the international and domestic assignments The amount of change in the home organisation The nature and personality of the expatriate The support available to the returning expatriate The career planning system of the organisation