1. Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall International HRM Challenge 17-1 Chapter 17

2. Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Chapter 17 Objectives  Specify the HRM strategies that are most appropriate for firms at different stages of internationalization.  Identify the best mix of host-country and expatriate employees given the conditions facing the firm.  Explain why international assignments often fail and the steps a firm can take to ensure success in this area. 17-2

3. Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Chapter 17 Objectives  Reintegrate returning employees into the firm after they complete an international assignment.  Develop HRM policies and procedures that match the needs and values of different cultures.  Consider ethical implications of HRM policies and procedures on a global basis. 17-3

4. Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Stages of International Involvement  Expatriate —citizen of one country and lives and works in another country 17-4   Multinational corporation (MNC)   Firm with assembly and production facilities in several regions of the world   Transnational corporation   Firm with highly decentralized operations in many countries   Has little allegiance to its country of origin and weak ties to any country

5. Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Stages of International Involvement 17-5

6. Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Stages of International Involvement  Outsourcing  Used extensively by firms in stages 3 to 5  Challenges include  Online security  Safety issues  Client complaints 17-6   Falling Barriers   Trade, production, services, and finances barriers largely disappeared

7. Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall The Mix of Host-Country and Expatriate Employees  Wholly owned subsidiary and joint ventures  Must decide who will manage overseas unit  Three approaches  Ethnocentric approach  Polycentric approach  Geocentric approach 17-7

8. Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall The Mix of Host-Country and Expatriate Employees Reliance on expatriates increases when: 17-8   Sufficient local talent is not available   Part of firm’s overall business strategy is to create a corporate-wide global vision   International units and domestic operations are highly interdependent   The political situation is unstable   Are significant cultural differences between the host and home countries

9. Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Challenges of Expatriate Assignments  20–40% failure rate for U.S. expatriates  3–4 times higher than Europeans or Asians 17-9   Many reasons assignments end in failure   Career blockage   Culture shock   Lack of pre-departure cross-culture training   Overemphasis on technical qualifications   Getting rid of a troublesome employee   Family problems

10. Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Challenges of Expatriate Assignments  Difficulties on Return 17-10   Lack of respect of acquired skills   Loss of status   Poor planning for return position   Reverse culture shock

11. Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Using HRM to Effectively Manage Expatriates Selection  Emphasize cultural sensitivity as a selection criterion  Establish a selection board of expatriates  Require previous international experience  Consider hiring foreign-born employees who can serve as future expatriates  Screen candidates’ spouses and families 17-11

12. Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Training  9–12 months before assignment  At least some training should go to the expatriate’s family  Three approaches to training:  Information-giving approach  Affective approach  Impression approach  Local managers need to be prepared to train incoming expatriates 17-12

13. Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Career Development  Position the international assignment as a step toward advancement within the firm  Provide support for expatriates  Provide career support for spouse 17-13

14. Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Compensation  Provide a disposable income equivalent to what the expatriate would receive at home  Provide an explicit “add-on” incentive for accepting an international posting  Don’t put expatriates in the same jobs held by locals or lower-ranking jobs  Calculating compensation for expatriates is very difficult  Fluctuating exchange rates  Cost of living varies tremendously 17-14

15. Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Using HRM to Effectively Manage Expatriates  Role of HR Department  Women and International Assignments 17-15

16. Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Developing HRM Policies in a Global Context  Western-style management likely to clash with foreign norms and values  Must mold practices to culture 17-16   Hofstede’s 5 Dimensions of Culture   Power distance   Individualism   Uncertainty avoidance   Masculinity/femininity   Long-term/short-term orientation

17. Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall EEO in the International Context  EEO prohibition of discrimination based on age, sex, race, etc. apply to international assignments too  Foreign national employees of U.S. companies working outside the US are not covered by U.S. employment law  Immigration and Control Act (1986)  Non-U.S. citizens living and working in the U.S.  May not be discriminated against 17-17

18. Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Developing HRM Policies: Caveats “National culture” may be an elusive concept Culture changes over time Companies sometimes blame international personnel problems on culture without study Virtually no data on the success/failure of HRM practices as a function of culture Different cultures often have very different notions of right and wrong The business laws of other countries often force companies to change their practices 17-18

19. Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Human Resource Management and Exporting Firms  Key impediments to exporting:  Lack of knowledge about international markets, business practices, and competition  Lack of management commitment to generating international sales  Impediments can be attributed to lack of utilization of human resources 17-19

20. Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Other International HR Considerations  Ethics and Social Responsibility  Many ethical dilemmas face expatriates  Ethical and legal are not the same Foreign Corrupt Practices Act (1977) 17-20   Political Risk   Government pressures can impact operations negatively.   Expatriates often get caught in the middle

21. Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Summary and Conclusions  Five stages of international involvement  Three approaches to managing foreign operations  Ethnocentric, polycentric and geocentric  Emphasize cultural sensitivity when selecting people for international assignments  Position international assignments as step towards advancement in the firm  Don’t transfer home HRM practices abroad  Reinforce export activities with HR practices 17-21

22. Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall 17-22 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.