HRMT 20025 For use with International Human Resource
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HRMT 20025 For use with International Human Resource Management 6 e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning 1 of 23 Chapter 4 International Human Resource Managment
Chapter 4 For use with International Human Resource Management 6 e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning 2 of 23 Chapter 4 IHRM in cross-border M&As, international alliances, and SMEs
START Click on an item to go to its section. IHRM in cross-border M&As, international alliances, and SMEs § § § Vocabulary Objectives Cross-border alliances Cross-border mergers & acquisitions International equity joint ventures International SMEs For use with International Human Resource Management 6 e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning 3 of 23 Click on the book cover below to return to this table of contents. Chapter 4 T A B L E O F C O N T E N T S Chapter 4
Vocabulary § § non-equity cross-border alliance equity modes TNCs, EEA Greenfield investments, acquisitions, mergers, M&As pre M&A, due diligence, integration planning, & implementation phases resources, processes, values knowledge transfer, embedded knowledge performance-related pay IJVs recruitment, training, & development partnership role, change facilitator, strategy implementer, innovator, collaborator multicultural teams SMEs internationalization process theory experiential market knowledge For use with International Human Resource Management 6 e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning 4 of 23 Chapter 4 § § §
Objectives You want to understand how these relate to IHRM: 1. Cross-border alliances 2. Equity-based alliances (M&As, IJVs) For use with International Human Resource Management 6 e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning 5 of 23 Chapter 4 3. Globalizing SMEs
For use with International Human Resource Management 6 e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning 6 of 23 Chapter 4 Cross-border alliances
Figure 4. 1 For use with International Human Resource Management 6 e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning 7 of 23 Chapter 4 Equity & non-equity modes of foreign operation
For use with International Human Resource Management 6 e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning 8 of 23 Chapter 4 Cross-Border mergers & acquisitions
Figure 4. 2 For use with International Human Resource Management 6 e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning 9 of 23 Chapter 4 The formation processes of M&As and HR challenges
Figure 4. 3 For use with International Human Resource Management 6 e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning 10 of 23 Chapter 4 Mergers and acquisitions in US$ billions
Typical cross-border M&A problems For use with International Human Resource Management 6 e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning 11 of 23 Chapter 4 § Within the first year of a merger, up to 20% of executives may be lost § The percentage lost gets worse over more than one year after a merger § Personnel issues are often neglected § A large number of M&As fail or do not produce the intended results
Figure 4. 4 For use with International Human Resource Management 6 e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning 12 of 23 Chapter 4 HR activities in the phases of a cross-border M&A
Firms should rely on three conceptual tools: 1. Resources money, people, brands, relationships 2. Processes activities used to convert resources into goods & services 3. Values the way employees think about what they do & why they do it For use with International Human Resource Management 6 e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning 13 of 23 Chapter 4 Strategic HRM in M&As
Comparing HRM in M&As § Performance-related pay is more popular in US than in Japan or Germany § Recruitment in US is more short-term than in Germany, France, & UK § Japan still has longest-term focus § US training & career planning is the most extensive § French still favor French managers For use with International Human Resource Management 6 e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning 14 of 23 Chapter 4 § Germans are the most anxious to adopt international practices for their M&As
For use with International Human Resource Management 6 e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning 15 of 23 Chapter 4 International equity joint ventures
IJV challenges include § HR must manage relations at the interfaces between IJV & parent companies Different rules can create critical dualities HR must recruit, develop, motivate, retain human resources at IJV level For use with International Human Resource Management 6 e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning 16 of 23 Chapter 4 § HR must develop appropriate HRM practices & strategies for the IJV itself.
Figure 4. 5 For use with International Human Resource Management 6 e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning 17 of 23 Chapter 4 Formation of an international equity joint venture
The main reasons for an IJV § To gain knowledge & transfer that knowledge § The host government insists § Increased economies of scale § To gain local knowledge § To obtain vital raw materials § To share risks (e. g. , financial) § To improve global competitive advantage For use with International Human Resource Management 6 e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning 18 of 23 Chapter 4 § Provide an efficient & cost effective response required by market globalization
IJV development stages Partnership role Change facilitator & strategy implementer Innovator Collaborator For use with International Human Resource Management 6 e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning 19 of 23 Chapter 4 § §
For use with International Human Resource Management 6 e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning 20 of 23 Chapter 4 International SMEs
Table 4. 1 For use with International Human Resource Management 6 e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning 21 of 23 Chapter 4 SME definition
In EEA & Sweden: § 99+% of 16 million enterprises in EEA & Sweden are SMEs § Two thirds of jobs are in SMEs In Asia Pacific region: § SMEs are 90% of all enterprises § 32 -48% employment is by SMEs In US: § 80+% employment is by SMEs with less than 20 employees For use with International Human Resource Management 6 e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning 22 of 23 Chapter 4 SMEs are very important
Barriers to international markets by SMEs TOP 1. For use with International Human Resource Management 6 e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning 23 of 23 Chapter 4 1. Not enough working capital to finance exports 102. 2. Inability to identify foreign business opportunities 3. Limited information to locate/analyze markets 4. Inability to contact potential overseas customers 5. Inability to obtain reliable foreign representation 6. Lack of managerial time to handle internationalization 7. Untrained or not enough personnel to go international 8. Difficulty in managing competitors’ prices 9. Lack of home government assistance & incentives 10. Excessive transportation & insurance costs
§ The founder or owner has large impact § Recruitment, selection, & retention: SMEs struggle because of perceptions § Yet SME requirements are similar to those of large organizations § Human resource development – learning § Expatriate management § Limited HR dept resources & outsourcing For use with International Human Resource Management 6 e By Peter J. Dowling, Marion Festing, and Allen D. Engle. Sr. ISBN-10: 1408032090 © Cengage Learning 24 of 23 Chapter 4 IHRM features in SMEs
