1. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-1 Managing Human Resources Managing Human Resources Bohlander  Snell  Sherman Chapter 16 International Human Resources Management Chapter 16 International Human Resources Management

2. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-2 Learning Objectives  Identify the types of organizational forms used for competing internationally.  Explain how domestic and international HRM differ.  Discuss the staffing process for individuals working internationally.  Identify the unique training needs for international assignees.

3. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-3 Learning Objectives, cont.  Reconcile the difficulties of home-country and host-country performance appraisals.  Identify the characteristics of a good international compensation plan.  Explain the major differences between U.S. and European labor relations.

4. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-4 Presentation Slide 16-1 Increasing Importance of Global Human Resource Understanding 16-1 International Mergers and Acquisitions Importance of Global Human Resources Management Foreign Human Resources Global Competition Market Access Opportunities SOURCE: Jagdish N. Sheth and Abdolreza S. Eshghi, Global Human Resources Perspectives (Cincinnati: South-Western, 1989), vii.

5. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-5 Presentation Slide 16-2 Types of Organizations 16-2 GLOBAL Views the world as a single market; operations are controlled centrally from the corporate office. TRANSNATIONAL Specialized facilities permit local responsiveness; complex coordination mechanisms provide global integration. High GLOBAL EFFICIENCY INTERNATIONAL Uses existing capabilioties to expand into foreign markets. Low MULTINATIONAL Several subsidiaries operating as stand-alone business units in multiple countries LowHigh Source: Adapted from Peter J. Dowling, Denice E. Welch, and Randall S. Schuler, International Dimensions of Human Resource Management, 3e (South-Western, 1999). LOCAL RESPONSIVENESS

6. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-6 International Corporation Domestic firm that uses its existing capabilities to move into overseas markets

7. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-7 Multinational Corporation (MNC) Firm with independent business units operating in multiple countries

8. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-8 Global Corporation Firm that has integrated worldwide operations through a centralized home office

9. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-9 Transnational Corporation Firm that attempts to balance local responsiveness and global scale via a network of specialized operating units

10. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-10 The Top 50 Global Firms COMPANY SALES (1998) 1. General MotorsU.S.161,315 2. DaimlerChryslerGermany154,615 3. Ford MotorU.S.144,418 4. Wal-Mart StoresU.S.139,208 5. MitsuiJapan109,373 6. ItochuJapan108,749 7. MitsubishiJapan107,184 8. ExxonU.S.100,697 9. General ElectricU.S.100,469 10. Toyota MotorJapan 99,740 11. Royal Dutch/ShellU.K./Neth. 93,692 12. MarubeniJapan 93,568 13. SumitomoJapan 89,020 14. IBMU.S. 81,667 15. AxaFrance 78,729 16. CitigroupU.S. 76,431 17. VolkswagenGermany 76,306 18. Nipon T&TJapan 76,118 19. BP AmocoU.K. 68,304 20. Nissho IwaiJapan 67,741 21. Nippon Life InsuranceJapan 66,299 22. SiemensGermany 66,037 23. AllianzGermany 64,874 24. HitachiJapan 62,409 25. U.S.Postal ServiceU.S. 60,072 COMPANY SALES (1998) 26. MatsushitaJapan59,771 27. Philip MorrisU.S.57,813 28. Ing GroupNetherlands56,468 29. BoeingU.S.56,154 30. AT&TU.S.53,588 31. SonyJapan53,156 32. MetroGermany52,126 33. Nissan MotorJapan51,478 34. FiatItaly50,999 35. Bank of AmericaU.S.50,777 36. NestleSwitzerland49,504 37. Credit SuisseSwitzerland49,143 38. Honda MotorJapan48,747 39. Assicurazioni GeneraliItaly48,478 40. MobilU.S.47,678 41. Hewlett-PackardU.S.47,061 42. Deutsche BankGermany45,165 43. UnileverU.K./Neth.44,908 44. State Farm InsuranceU.S.44,620 45. Dai-Ichi InsuranceJapan44,485 46. Veba GroupGermany43,407 47. HSBC HoldingsU.K.43,338 48. ToshibaJapan41,471 49. RenaultFrance41,353 50. Sears RoebuckU.S.41,332

11. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-11 HRM Issues of a Unified Europe Compensation and Benefits Training and Development ProductivityStaffing Labor Relations

12. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-12 Cultural Environment Language, religion, values, attitudes, education, social organization, technology, politics, and laws of a country

13. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-13 Host Country Country in which an international corporation operates

14. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-14 Presentation Slide 16-3 Cultural Environment of International Business

15. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-15 Presentation Slide 16-4 Advantages of Different Sources for Overseas Managers

16. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-16 Expatriates, or Home-Country Nationals Employees from the home country who are sent on international assignment

17. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-17 Host-Country Nationals Natives of the host country

18. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-18 Third-Country Nationals Natives of a country other than the home country or the host country

19. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-19 Time Emphasis in Staffing Expatriates Host Country Nationals Host Country Nationals Changes in International Staffing Over Time

20. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-20 International Staffing RecruitmentSelection Training and Development Key Issues

21. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-21 Guest Workers Foreign workers invited in to perform needed labor

22. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-22 Work Permit, or Work Certificate Government document granting a foreign individual the right to seek employment

23. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-23 Technical competence Professional experience Interpersonal skills International experience Family flexibility Country experience Language skills Expatriate Selection Criteria

24. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-24 Core Skills Skills considered critical in an employee’s success abroad

25. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-25 Augmented Skills Skills helpful in facilitating the efforts of expatriate managers

26. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-26 Augmented Skills Experience Decision-making Resourcefulness Adaptability Cultural sensitivity Team building Maturity Augmented Skills Experience Decision-making Resourcefulness Adaptability Cultural sensitivity Team building Maturity Core Skills Experience Decision-making Resourcefulness Adaptability Cultural sensitivity Team building Maturity Core Skills Experience Decision-making Resourcefulness Adaptability Cultural sensitivity Team building Maturity Skills of Expatriate Managers

27. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-27 Failure Rate Percentage of expatriates who do not perform satisfactorily

28. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-28 Why Do Expatriates Fail? Family adjustment Lifestyle issues Work adjustment Bad selection Poor performance Other opportunities arise Business reasons Repatriation issues

29. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-29 Transnational Teams Teams composed of members of multiple nationalities working on projects that span multiple countries

30. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-30 Global Managers Manage Decentralized Operations Aware of Global Issues Interpersonal Competence Sensitive to Diversity Issues Seize Strategic Opportunities Skilled in Building Communities

31. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-31 Global Manager Manager equipped to run a global business

32. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-32 Content of Training Programs Language Training Cultural Training Personal and Family Life Career Development and Mentoring Key Elements Needed to Prepare Employees to Work Overseas

33. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-33 Repatriation Process of employee transition home from an international assignment

34. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-34 Culture Shock Perceptual stress experienced by people who settle overseas

35. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-35 International Performance Appraisals Host-Country Evaluations Augmenting Job Duties Organizational Learning Individual Learning Home-Country Evaluations Providing Feedback Key Issues

36. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-36 Presentation Slide 16-5 Performance Evaluation Home-Country Evaluation Host-Country Evaluation GLOBAL PERSPECTIVE LOCAL PERSPECTIVE

37. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-37 Presentation Slide 16-6 Effective Compensation of Expatriate Managers The compensation program must: u Provide an incentive to leave the U.S. u Maintain a U.S. standard of living. u Facilitate reentry into the U.S. u Provide for the education of children. u Maintain relationships with family, friends, and business associates.

38. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-38 Balance-Sheet Approach Compensation system designed to match the purchasing power of a person’s home country

39. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-39 Country $/Hour Germany28.28 Belgium22.82 Japan19.37 Sweden18.81 U.S.18.24 France17.97 Italy16.74 Canada16.55 Australia16.00 Britain15.47 Spain12.16 Israel12.05 Korea 7.22 Taiwan 5.89 Hong Kong 5.42 Mexico 1.75 Source: Department of Labor (Hourly compensation costs in U.S. dollars for production workers in manufacturing). Presentation Slide 16-7 Hourly Wages in Different Countries

40. Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-40 Codetermination Representation of labor on the board of directors of a company