1. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 1 Managing a global workforce Chapter 14

2. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 14-2 Managing a global workforce  Objectives ÙDiscuss the meaning of international HRM (IHRM). ÙHave an understanding of the dimensions of international HR activities. ÙBe aware of the impact of internationalisation on the activities and policies of HRM. ÙUnderstand the variables that moderate differences between domestic and international HRM.

3. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 14-3 Managing a global workforce  Objectives (continued) ÙUnderstand the complexity of operating in different countries and employing different national categories of employees. ÙUnderstand the role of strategic HRM in multinational enterprises.

4. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 14-4 Three approaches to IHRM  Cross-cultural management approach ÙExamines human behaviour within organisations from an international perspective.  Comparative HRM ÙSeeks to describe, compare and analyse HRM systems in various countries.  HRM in multinational enterprises (MNEs) ÙExplores the implications of the process of internationalisation on HRM activities and policies.

5. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 14-5 Source: Adapted from P.V. Morgan, ‘International human resource management: Fact or fiction?’, Personnel Administrator, 31(9), 1986, p.44. Figure 14.1 Model of IHRM

6. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 14-6 Types of employees in an MNE  Parent-country nationals (PCNs) ÙEmployees who were born and live in a parent country. ÜA parent (or home) country: the country in which a company’s corporate headquarters is located.  Host-country nationals (HCNs) ÙEmployees born and raised in a host country. ÜHost country: a country in which the MNE seeks to locate or has already located a facility.  Third-country nationals (TCNs) ÙEmployees born in a country other than a parent or host country.

7. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 14-7 Types of international work  Expatriates ÙAn employee sent by his/her company in one country to work in a different country.  Global team project ÙBringing together employees from different locations to complete a specific team project.  Short-term assignments ÙSending employees on assignments, such as a three- month assignment, to a foreign location.  Virtual assignment. ÙAssignments requiring employees in different locations to use information technology to communicate on job projects and tasks.

8. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 14-8 Factors which differentiate international from domestic HRM  More HR activities  The need for a broader perspective  More involvement in employees' personal lives  Changes in emphasis with variable mix of expatriates and locals in workforce  Risk exposure  More external influences

9. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 14-9 Source: P.J. Dowling, University of Canberra. Used with permission. Figure 14.2 Variables that moderate differences between domestic and international HRM

10. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 14-10 The cultural environment: key terms  Culture ÙA distinct way of life, shared by members of a group or society, with common values, attitudes and behaviours that are transmitted over time in a gradual, yet dynamic, process.  Culture shock ÙA phenomenon experienced by people who move across cultures. They experience a shock reaction (or psychological disorientation) when exposed to new cultural experiences, because they misunderstand or do not recognise important cues.

11. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 14-11 The cultural environment: the emic-etic distinction  Emic ÙCulture-specific aspects of concepts or behaviour.  Etic: ÙCulture-common aspects of concepts or behaviour.

12. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 14-12 The cultural environment: the convergence hypothesis  The hypothesis that management practices around the world would converge, based on two assumptions: ÊThat the principles of sound management would hold, regardless of national environment. ËThat the universality of sound management practices would lead to societies becoming more and more alike in the future.

13. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 14-13 The cultural environment: the divergence hypothesis  In opposition to the convergence hypothesis, the notion that societies and management practices around the world will remain, or become more, dissimilar.

14. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 14-14 Industry type  Multi-domestic industry: ÙAn industry in which competition in each country is essentially independent of competition in other countries.  Global industry: ÙAn industry in which a firm’s competitive position in one country is significantly influenced by its position in other countries.

15. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 14-15 Extent of MNE reliance on domestic market  The ‘top ten’ MNEs on the UNCTAD ‘index of transnationality’ ÀNestlé (Switzerland) ÁThomson (Canada) ÂHolderbank Financière (Switzerland) [now Holcim] ÃSeagram (Canada) ÄSolvay (Belgium) ÅAsea Brown Boveri (Sweden/Switzerland) ÆElectrolux (Sweden) ÇUnilever (Britain/Netherlands) ÈPhilips (Netherlands) ÉRoche (Switzerland)

16. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 14-16 Attitudes of senior management to international operations  Ethnocentrism ÙThe assumption that one’s own cultural approach is superior to any other. ÙAn ethnocentric approach to international staffing typically results in all key management positions being held by PCNs. ÙAlso, international HRM activities are typically developed and administered by PCNs.

17. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 14-17 Source: Adapted from H. De Cieri & P.J. Dowling, ‘Strategic human resource management in multinational enterprises: theoretical and empirical developments’, in P.M. Wright, L.D. Dyer, J.W. Boudreau & G.T. Milkovich (eds.), Research in Personnel and Human Resources Management in the Twenty-First Century, supplement 4. JAI Press, Stamford CT, 1999, p.318. Strategic HRM HR function strategy HR practices External factors Industry characteristics Country/regional characteristics Inter-organisational networks Internal organisational factors MNE structure - Structure of international operations - Intra-organisational networks - Mechanisms of coordination - International entry mode MNE strategy - Corporate-level strategy - Business-level strategy Organisational life-cycle stage Experience in managing international operations Headquarters international orientation MNE concerns & goals Competitiveness Efficiency Balance of global integration & local responsiveness Flexibility Figure 14.3 Framework of strategic HRM in multinational enterprises

18. Copyright  2003 McGraw-Hill Australia Pty Ltd. PPTs t/a Human Resource Management in Australia: Strategy-People-Performance by De Cieri & Kramar 14-18 Summary  Three main approaches have been applied to the study of international HRM.  Several variables moderate differences between domestic and international HRM.  Strategic HRM research examines the relationships between internal organisational characteristics, HRM strategy and practices, and firm performance or competitive advantage. The evidence is inconclusive and important questions remain about the nature of these relationships.