2014 Cengage Learning All rights reserved May not

© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Learning Objectives After studying this chapter, you should be able to: 1. Describe the growth of international business 2. Identify and discuss global issues in international human resource management 3. Discuss the human resource management function in international business 4. Identify and discuss domestic issues in international human resource management 5. Describe the issues involved in managing international transfers and assignments 6. Summarize the issues in international labor relations © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3– 2

The Growth of International Business • During the 1950 s, the U. S. and its economy was the dominant force. • From the 1960 s onward, the U. S. has been challenged by other developing countries. • Recent widespread economic downturns in world markets reflect the extent to which these markets have become interrelated. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3– 3

Global Business Centers © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3– 4

International Hiring Challenges • Understanding the culture • Being aware of motivational aspects • Evaluating employee performance • Understanding technology awareness and usage • Recognizing preferred communication styles • Observing the preferred management structure. • Observing the organizational culture © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3– 5

Global Issues in International HRM © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3– 6

International HRM Strategies International Staffing Considerations Ethnocentric staffing model Polycentric staffing model Geocentric staffing model © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3– 7

International HRM Strategy • Ethnocentric Staffing Model Ø Assumes that home-based perspectives take precedence over local perspectives and issues positions to parent country nationals. Ø Primarily uses parent-country nationals to staff higher level foreign positions. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3– 8

International HRM Strategy • Polycentric Staffing Model Ø Makes dominant use of host-country nationals throughout the organization. • Geocentric Staffing Model Ø Puts parent-country nationals, host-country nationals, and third-country nationals in the same category. Ø Attempts always to hire the best person available for a position. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3– 9

Understanding the Cultural Environment • Culture Ø The set of values, symbols, beliefs, and languages that guide behavior of the people within that culture. • Importance of Cultural Awareness Ø International business managers: v Must be aware of cultural nuances. v Must be cognizant of the role of cultural differences and similarities in workers from different cultures. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3– 10

Hofstede’s Dimensions of Culture Power Distance Individualism versus Collectivism Uncertainty Avoidance Masculinity versus Femininity Time Orientation © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3– 11

Political and Legal Issues of International Business Government stability Trade incentives Political and legal issues Trade controls Economic communities © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3– 12

General Human Resource Issues in International Business Avoiding discrimination in employment Choosing an appropriate source of employees General HR issues in international business Training and development of employees Working conditions, compensation, and the cost of living © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3– 13

Fundamental Management Challenges in International Business © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3– 14

Specific HR Issues in International Business Exporting Licensing Direct Investment Joint Venture Strategic Alliance © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3– 15

Threat of Opportunism and Asymmetry of Information as a Function of International Corporate Strategy © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3– 16

Beyond the Book: Recruiting and Selecting Key Elements Recruitment of employees for international business is an important step in HRM Defining the skills and abilities necessary to perform Defining the skills and abilities that are needed to work in a foreign nation © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3– 17

Domestic Issues in International Human Resource Management © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3– 18

International Transfers and Assignments of Expatriates Important Considerations in the Use of Expatriates Personnel Selection Pre-Posting Training Compensation and Evaluation © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3– 19

Selecting Expatriates for International Assignments Sources for Expatriates Parent-Country Personnel Host-Country Personnel Third-Country Personnel © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3– 20

Local (Host Country) Issues • Local Training and Development Ø Extent of local workforce training and development necessary for nationals to perform effectively • Local Compensation Issues Ø Assessing individuals Ø Assessing groups Ø Necessity for hardship premium for expatriates © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3– 21

Expatriate Compensation Balance Sheet © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3– 22

Beyond the Book: Repatriation of Expatriates § The final step in HRM in global business: ü Bringing an expatriate home is not a simple matter. ü Extensive adjustment by expatriates is often required upon their return at the end of lengthy assignments. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3– 23

International Labor Relations • Labor Relations Ø Is the process of dealing with employees who are organized into labor unions. Ø Are heavily regulated and restricted by law. Ø Are affected by management actions toward labor and labor actions toward management. Ø Are impacted by local cultural, social, political, and economic issues. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3– 24