Global human resource management lecture 1

GLOBAL HUMAN GLOBAL HUMAN RESOURCE MANAGEMENTRESOURCE MANAGEMENT

IMBA 552IMBA 552

International Business and International Business and HRMHRM

PURPOSE OF THIS CLASSPURPOSE OF THIS CLASS

To understand the management of global human capital

To understand the role of the global human resource function

To begin pre-preparation for your international experience

To begin the process of “writing a thesis”

RANK COUNTRY POPULATION % OF WORLDPOPULATION

- World 6.7 billion 100%

1 People’s RepublicOf China

1.3 billion 19.9%

2 India 1.1 billion 17.04%

3 United States .3 billion 4.57%

4 Indonesia .2 billion 3.47%

5 Brazil .18 billion 3.81%

6 Pakistan .16 billion 2.46%

FACTS For PUBLICLY FACTS For PUBLICLY TRADEDTRADED

• 60,000 MNE’s employ over than 45mm people60,000 MNE’s employ over than 45mm people

• By 2010 this will increase to 75mmBy 2010 this will increase to 75mm

• In 1957 US contributed 53% to global GDP – today In 1957 US contributed 53% to global GDP – today 18%18%

• In 2003 25 countries employed 40mm people In 2003 25 countries employed 40mm people with a total of USD 13.73 trillion in annual with a total of USD 13.73 trillion in annual revenues and USD 45 trillion in assetsrevenues and USD 45 trillion in assets

• Key players besides US, Germany, Great Britain, Key players besides US, Germany, Great Britain, France and Japan is; south Korea, Mexico, Russia, France and Japan is; south Korea, Mexico, Russia, China, BrazilChina, Brazil

OTHERSOTHERS

• Some of the largest international firms Some of the largest international firms are owned by families, especially in are owned by families, especially in China, Taiwan, Thailand, Hong Kong, China, Taiwan, Thailand, Hong Kong, Indonesia, Malaysia and SingaporeIndonesia, Malaysia and Singapore

• Growing numbers of Small Growing numbers of Small Multinationals (SME’s)Multinationals (SME’s)– In Germany there are 350 SME’s that In Germany there are 350 SME’s that

dominate their market nichedominate their market niche

DRIVERS FOR DRIVERS FOR GLOBALIZATIONGLOBALIZATION

• Scale EconomiesScale Economies

• Scope EconomiesScope Economies

• Shorter Product Life CyclesShorter Product Life Cycles

• Direct Foreign InvestmentDirect Foreign Investment

• TechnologyTechnology

RATIONALE FOR GLOBAL HRMRATIONALE FOR GLOBAL HRM

• Increased travelIncreased travel

• Rapid and extensive global Rapid and extensive global communicationscommunications

• Rapid transfer of new technologyRapid transfer of new technology

• Growing trade, foreign competitionGrowing trade, foreign competition

• Improving educationImproving education

• Emigration of large numbers of peopleEmigration of large numbers of people

Porter’s Diamond (Adapted from Porter:1990)

Firm Strategy, Structure and

Rivalry

Factor Endowments Demand

Conditions

Related and Supporting Industries

COMPETITIVE ADVANTAGE OF NATIONS

TRENDS IN THE INTERNATIONAL TRENDS IN THE INTERNATIONAL DIVISION OF LABOR- Reich’s New DIVISION OF LABOR- Reich’s New

World OrderWorld Order

• Routine Production Routine Production ServicesServices

• In-person ServicesIn-person Services

• Symbolic Analytic Symbolic Analytic ServicesServices

• Zero-sum Zero-sum NationalismNationalism

• CosmopolitanismCosmopolitanism

• Positive Economic Positive Economic NationalismNationalism

Routine production servicesRoutine production services

Routine production as an employee on an assembly line or supervisory

jobs or clerical jobs involving repetitive checks on employees and enforcement of standard operating

procedures

In person servicesIn person services

Simple repetitive tasks with little training providing services directly to the consumer, e.g. salespersons, hairdressers, waiters, cleaning staff, receptionists, etc.

Symbolic-analytic servicesSymbolic-analytic services

These jobs require skills in problem solving and problem identification, e.g. engineers,

architects, managers, research scientists, etc.

Zero sum nationalismZero sum nationalism“ The assumption that there are only two outcomes possible in economic warfare:

either we win or they win, so we had better

make sure that we win.

Countries therefore close their eyes to globalization and try to protect and

improve their own position.

Government subsidies for deteriorating industries and a renewed interest in

protectionism are the hallmarks of this scenario.

CosmopolitanismCosmopolitanism

The ideal of free trade is championed. This is not a zero sum game: the world as a whole can improveThrough free trade. By making products where theycan be made most cheaply, we all benefit in the end.

Reich maintains this is the attitude that will most likelydetermine the future.

Positive economic Positive economic nationalismnationalism

Each nations citizens take primary responsibility for enhancing the

capabilities of their countrymen for full and productive lives, but also

work with other nationals to ensure that these improvements do not come

at others’ expense.

This argument provides for free trade with some form of government

intervention

What is Human Resource What is Human Resource ManagementManagement

As a field it is about: the understanding, researching, applying and revising all

human resource activities in their internal and external contexts as they impact the process of managing human resources in

enterprises throughout the global environment to enhance the experience of multiple stakeholders, including investors, customers, employees, partners, suppliers,

environment, and society.

Forms of International HRMForms of International HRM

• Operation of parent-country firmsOperation of parent-country firms

• Operation of foreign firms in the Operation of foreign firms in the home countryhome country

• Operation of Third party nationalsOperation of Third party nationals

• Employment of foreign citizens (or Employment of foreign citizens (or recent immigrants and/or their recent immigrants and/or their familiesfamilies

DIFFERENCES BETWEEN DIFFERENCES BETWEEN DOMESTIC AND INTERNATIONAL DOMESTIC AND INTERNATIONAL

HRMHRM• Responsibility for greater number of activitiesResponsibility for greater number of activities

• Need for greater level of expertiseNeed for greater level of expertise– e.g. employment lawse.g. employment laws

• Necessity for closer involvement with employees Necessity for closer involvement with employees (e.g. expatriate families(e.g. expatriate families

• Greatly expanded and different mix of employeesGreatly expanded and different mix of employees

• Having to deal with more external influencesHaving to deal with more external influences

• Having to face greater exposure to problems and Having to face greater exposure to problems and difficultiesdifficulties