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IAF 605 - International Business Management
Week 13
Human Resource Management
Agenda
review Chapter 15
Tel-Comm-Tek (TCT) Case
Chapter 20 – HR Management
TCT – Case Questions
Which candidate should the committee nominate for the assignment? Why?
What challenges might each candidate encounter in the position?
How might TCT go about minimizing the challenges facing each candidate?
TCT – Case Questions
Should TCT offer all candidates the same compensation package? If not, what factors should influence the features of each package?
Returning to material covered in Chapter 15, specifically that dealing with the idea of a matrix organization, do you see any benefit to appointing two of the individuals described here to the post? Operationally, one individual would be in charge of internal affairs, and the other would manage external affairs. What might be the benefits and problems with this arrangement?
Chapter Objectives
To discuss the importance of
human resource management
To profile the staffing
frameworks used by MNEs
To explain the types and
competencies of expatriates
To examine how MNEs select,
prepare, compensate,
and retain expatriates
Human Resource Management (HRM) - activities necessary to staff the organization…more difficult for the international company than it’s domestic counterpart due to:
environmental differences and organizational challenges due
to leadership styles and management practices.
Expatriate - an employee
who leaves her or his native
country to live and work in
another.
Third-country national - an
employee who is a citizen
of neither the home
nor the host country.
Source: zimbio.com
Definitions
The strategic function of international HRM – creates superior value
MNE whose HRM policies support its chosen strategy creates superior value but many MNEs struggle to develop effective HRM policies
Trends in Expatriate Assignment – demand in
developing countries; short-term more common
The Young, The Old, and The Restless – more
females; more developing to richer countries vs
sending expats to a host nation
The Impact of Market Disruption – trying to
reduce expenses / less “permanent assignments”
The Perspective of Expatriates
Three perspectives describe how companies set about staffing their international operations:
• fills management positions with home-country nationals
ethnocentric
• uses host-country nationals to manage local subsidiaries
polycentric
• seeks the best people for key jobs throughout the organization, regardless of their nationality
geocentric approaches
Discussion and Debate
ethnocentric polycentric geocentric
Managing Expatriates
Selecting Expatriates
Expatriate Failure
Preparing Expatriates
Compensating Expatriates
Repatriating Expatriates
Selecting Expatriates – objective measures are rough estimators!
technical competence
•often the strongest determinant of who is selected for an international assignment
adaptiveness
•self-maintenance & personal resourcefulness
•developing satisfactory relationships
•sensitivity to host environment
leadership ability
• top managers in subsidiaries usually assume a greater range of leadership roles and broader duties
Expatriate Failure
operationally costly and professionally detrimental
a leading cause of expatriate failure is the inability of a spouse to adapt to the host country (NOT their technical skills)
see more short-term assignments, “commuter” assignments and young or old expats
Image source: http://www.flickr.com/photos/carbonnyc/
Preparing ExpatriatesFocusing on Adaptiveness and
Related Characteristics
General Country Understanding
Cultural Sensitivity
Practical Skills – schooling,
socializing and shopping
culture
shock
Compensating Expatriates
The Pay-Performance Link
Types of Compensation Plans –
• Home Based
• Headquarter Based
• Host Based Methods
In designing compensation packages for expatriates, HRM considers the following topics
Base Salary
Foreign Service Premium
Allowances – COL; Housing; Spouse; Hardship
Fringe Benefits
Tax Differentials
Image source: http://www.flickr.com/photos/symic/
Complications posed by National Differences – pay based on standards in the host country or on a global basis? Legal, cultural and regulatory factors.
• may pay someone more than necessary to persuade them to go abroad
polycentric and
ethnocentric
• manager performs the same job but in different locations – paid the same salary?
geocentric
Repatriating Expatriates - act of returning home from a foreign assignment
Repatriation stress: financial | work | social
The principal cause of repatriation frustrations is finding the right job for someone to return to!
International Labor Relations
Labor union -association of workers who have united to represent their collective views for wages, hours, and working conditions.
Collective bargaining -negotiations between labor union representatives and employers to reach agreement on a work contract.
Source: http://www.flickr.com/photos/ellafunnt/
Labor claims it is disadvantaged in dealing with MNEs because:
It is hard to get full data on MNEs’ global operations.
MNEs can manipulate investment incentives.
They can easily move value activities to other countries.
Ultimate decision making occurs in another country.
How Labor Responds To The MNE:
tries to strengthen its bargaining power through
cross-national cooperation
Future: Which Countries Will Have the Jobs of the Future?
Worker populations will grow faster in developing countries.
Wealthier countries will continue to grow in the number of retirees
Image sources: http://www.flickr.com/photos/aheram/; http://www.flickr.com/photos/ngoaengaf/
Adjustments for developed economies:Nationalism | Men vs. Machines | Brains: Drains, Recycle, or Halt
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