IHRM Sustaining international business operations Approaches to staffing

IHRM: Sustaining international business operations

Approaches to staffing • Factors affecting approaches to staffing – General staffing policy on key positions at headquarters and subsidiaries • • Ethnocentric Polycentric Geocentric Regiocentric – Constraints placed by host government – Staff availability

Ethnocentric • Strategic decisions are made at headquarters • Limited subsidiary autonomy • Key positions in domestic and foreign operations are held by headquarters’ personnel; PCNs manage subsidiaries

Polycentric • Each subsidiary is a distinct national entity with some decision-making autonomy • HCNs manage subsidiaries who are seldom promoted to HQ positions • PCNs rarely transferred to subsidiary positions

Geocentric • A global approach - worldwide integration • View that each part of the organization makes a unique contribution • Nationality ignored in favour of ability: – Best person for the job – Colour of passport does not matter when it comes to rewards, promotion and development

Figure 3 -1: Geocentric staffing requirements

Regiocentric • Reflects a regional strategy and structure • Regional autonomy in decision making • Staff move within the designated region, rather than globally – Staff transfers between regions are rare

Table 3 -1: The advantages and disadvantages of using PCNs, TCNs and HCNs

Figure 3 -2: Determinants of IHRM approaches and activities

Reasons for international assignments • Position filling – Eg. Skills gap, launch of new endeavour, technology transfer • Management development – Training and development purposes, assisting in developing common corporate values • Organizational development – Need for control, transfer of knowledge, competence, procedures and practices

Types of international assignments • Short term – Up to 3 months • Extended – Up to 1 year • Long term – Varies from 1 to 5 years – The traditional expatriate assignment

Non-standard assignments • Commuter assignments • Rotational assignments • Contractual assignments • Virtual assignments Some of these arrangements assist in overcoming the high cost of international assignments but are not always effective substitutes for the traditional expatriate assignment

Figure 3 -3: Factors influencing virtual assignments

Roles of an expatriate • • • Agent of direct control Agent of socialization Network builder Boundary spanner Language node Transfer of competence and knowledge

Figure 3 -4: The roles of an expatriate

The role of non-expatriates • People who travel internationally yet are not considered expatriates as they do not relocate to another country – Road warriors, globetrotters, frequent fliers • Much of international business involves visits to foreign locations, eg. – Sales staff attending trade fairs – Periodic visits to foreign operations

A glamorous life? • International business travelers cite the positives as: – Excitement and thrills of conducting business deals in foreign locations – Life style (top hotels, duty-free shopping, business class travel) – General exotic nature

But a high level of stress! • Home and family issues – frequent absences • Work arrangements – domestic side of position still has to be attended to • Travel logistics – waiting in airports, etc. • Health concerns – poor diet, lack of sleep, etc. • Host culture issues – limited cultural training

Table 3 -2: Various roles of corporate HR

The role of the corporate HR function • Can we manage our people like a global product? The feasibility of: – The concept of a global internal labour market – Standardization of work practices and HR activities • What HR matters require central control and what can be decentralized?