1. © 2008 by Prentice Hall14-1 Human Resource Management 10 th Edition Chapter 14 GLOBAL HUMAN RESOURCE MANAGEMENT

2. © 2008 by Prentice Hall14-2 Cultural Differences Affecting Global Human Resource Management Cultural differences vary from country to country with corresponding differences in HR practices

3. © 2008 by Prentice Hall14-3 Country’s Culture Set of values, symbols, beliefs, languages, and norms that guide human behavior within country Learned behavior that develops as individuals grow from childhood to adult Countries are recognizing that they need to understand culture of countries in which they do business

4. © 2008 by Prentice Hall14-4 Evolution of Global Business Not long ago, Mercedes-Benz was still a German company, General Electric was American, and Sony was Japanese Many United States firms such as Coca-Cola, Procter & Gamble, and Texas Instruments do most of their business and employ most of their workers outside the U.S. Many non-U.S. companies make products here such as with Toyota American making their cars in Kentucky

5. © 2008 by Prentice Hall14-5 Evolution of Global Business Exporting - Selling abroad retaining foreign agents and distributors Licensing - Organization grants foreign firm right to use intellectual properties Franchising - Parent company grants another firm right to do business in prescribed manner

6. © 2008 by Prentice Hall14-6 Evolution of Global Business (Cont.) Multinational corporation - Firm based in one country and produces goods or provides services in one or more foreign countries Global corporation - Corporate units in countries are integrated to operate as one organization worldwide - Operates as if the entire world were one entity

7. © 2008 by Prentice Hall14-7 Global Professional in Human Resources (HRCI) Strategic international HR management Organizational effectiveness and employee development Global staffing International assignment management Global compensation International employee relations and regulations

8. © 2008 by Prentice Hall14-8 Global Human Resource Management Global HR managers develop and work through integrated global human resource management system similar to one they experience domestically

9. © 2008 by Prentice Hall14-9 Environment of Global Human Resource Management 1 Human Resource Management Other Functional Areas OperationsMarketing Finance Legal Considerations Economy Technology Society Shareholders Unions CustomersCompetitionLabor Market Human Resource Development Compensation Staffing Employee and Labor Relations Safety and Health INTERNAL ENVIRONMENT EXTERNAL ENVIRONMENT UNITED STATES GLOBAL ENVIRONMENT Unanticipated Events

10. © 2008 by Prentice Hall14-10 Global Staffing Types of Global Staff Members Approaches to Global Staffing

11. © 2008 by Prentice Hall14-11 Types of Global Staff Members Expatriate - Employee working in firm who not citizen of country in which firm is located but citizen of country where organization is headquartered Host-country national - Employee’s nationality same as location of subsidiary Third-country national - Citizen of one country, working in second country, and employed by organization headquartered in third country

12. © 2008 by Prentice Hall14-12 Approaches to Global Staffing Ethnocentric staffing - Companies primarily hire expatriates to staff higher- level foreign positions Polycentric staffing - When more host- country nationals are used throughout the organization, from top to bottom

13. © 2008 by Prentice Hall14-13 Approaches to Global Staffing (Cont.) Regiocentric staffing - Regional groups of subsidiaries reflecting organization’s strategy and structure work as a unit Geocentric staffing - Uses worldwide integrated business strategy

14. © 2008 by Prentice Hall14-14 Expatriate Selection Stages Self-selection - Employees determine if they are right for a global assignment (family also) Creating a candidate pool Technical skills assessment Making a mutual decision

15. © 2008 by Prentice Hall14-15 Background Investigation Conducting background investigations is equally, or more, important Differences across cultures and countries often put up barriers to overcome Each country has own laws, customs and procedures for background screenings

16. © 2008 by Prentice Hall14-16 Global Human Resource Development Expatriate Training & Development Continual Development: Online Assistance and Training Repatriation Orientation and Training

17. © 2008 by Prentice Hall14-17 Expatriate Preparation and Development Program Expatriate Preparation and Development Prior to Departure: Orientation and Training During Assignment: Continual Development Near Completion: Repatriation Orientation Training Language Culture History Local Customs Living Conditions Expanding Skills Career Planning Home-Country Development U.S. Lifestyle U.S. Workplace U.S. Employees

18. © 2008 by Prentice Hall14-18 Trends & Innovations: Global E-learning Globalization has created special need for e-learning Challenges for global e-learning implementation are language and localization issues Companies that want to offer courses in several languages usually turn to translators

19. © 2008 by Prentice Hall14-19 Compensation for Host-Country Nationals Organizations should think globally but act locally Compensation - Normally, it is slightly above prevailing wage rates in the area Variations in laws, living costs, tax policies, and other factors all must be considered

20. © 2008 by Prentice Hall14-20 Compensation for Host-Country Nationals (Cont.) Factors to consider: minimum wage requirements, which often differ from country to country and even from city to city within a country; working time information such as annual holidays, vacation time and pay, paid personal days, standard weekly working hours, probation periods, and overtime restrictions and payments; and hiring and termination rules and regulations covering severance practices

21. © 2008 by Prentice Hall14-21 Compensation for Host-Country Nationals (Cont.) Culture often plays a part in determining compensation North American compensation practices encourage individualism and high performance Continental European programs typically emphasize social responsibility Traditional Japanese approach considers age and company service as primary determinants of compensation

22. © 2008 by Prentice Hall14-22 Expatriate Compensation Cost 3 - 5 times an assignee’s host- country salary per year and more if currency exchange rates become unfavorable Largest expatriate costs include overall remuneration, housing, cost-of-living allowances and physical relocation U.S. citizens living overseas can exclude up to $80,000 of income earned abroad

23. © 2008 by Prentice Hall14-23 Expatriate Compensation (Cont.) Country’s culture can affect compensation People in U.S. derive great status from high pay Nations in large parts of Europe and Asia shun conspicuous wealth In Italy, teamwork is more valued than individual initiative

24. © 2008 by Prentice Hall14-24 Global Safety and Health Important because employees who work in safe environment and enjoy good health more likely to be productive and yield long-term benefits to organization U.S.-based global operations are often safer and healthier than host- country operations, but not as safe as similar operations in U.S.

25. © 2008 by Prentice Hall14-25 Global Employees and Labor Relations Unionism maintains much of its strength abroad Foreign unions less adversarial with management

26. © 2008 by Prentice Hall14-26 Global Employees and Labor Relations in European Countries Codetermination, which requires firms to have union or worker representatives on their boards of directors, is very common Laws make it hard to fire workers, so companies are reluctant to hire Generous and lengthy unemployment benefits discourage the jobless from seeking new work

27. © 2008 by Prentice Hall14-27 Global Employees and Labor Relations in South American Countries In countries such as Chile, collective bargaining for textile workers, miners, and carpenters is prohibited Unions are generally allowed only in companies of 25 workers or more. Practice has encouraged businesses to split into small companies to avoid collective bargaining

28. © 2008 by Prentice Hall14-28 North American Free Trade Agreement (NAFTA) Between Canada, Mexico, and United States Facilitated movement of goods across boundaries within North America Free-trade zone of over 400 million people Combined gross domestic profit of about $12 trillion

29. © 2008 by Prentice Hall14-29 Central American Free Trade Agreement Ratified by America’s Congress after long political battle, and signed into law in 2005 Could provide huge economic boost for region

30. © 2008 by Prentice Hall14-30 Political and Legal Factors Nature and stability of political and legal systems vary throughout globe

31. © 2008 by Prentice Hall14-31 Tariffs and Quotas Tariffs - Taxes collected on goods shipped across national boundaries Quotas - Limit number or value of goods imported across national boundaries

32. © 2008 by Prentice Hall14-32 Global Bribery Foreign Corrupt Practices Act Law has teeth Not having ability to use bribery as tool of doing business has been costly for American companies

33. © 2008 by Prentice Hall14-33 Global Equal Employment Opportunity Women constitute more than 20% of total expatriate workforce percent of U.S. expatriate managerial workforce Some cultures today will not accept woman as a boss Sexual harassment is global problem Sexual harassment laws differ from country to country

34. © 2008 by Prentice Hall14-34 Virtual Teams in Global Environment Necessity of everyday working life Enable companies to accomplish things more quickly and efficiently

35. © 2008 by Prentice Hall14-35 Difficulties that Virtual Teams Confront Do not feel as connected or committed to team Communication problems directly proportional to number of time zones separating them Language problems

36. © 2008 by Prentice Hall14-36