Busn3025 Seminar 1 Introduction To Ihr Ma

Copyright 2003-2006, Chris Chan 1

BUSN3025BUSN3025

IINTERNATIONAL NTERNATIONAL HHUMAN UMAN

RRESOURCE ESOURCE MMANAGEMENTANAGEMENT


BACKGROUND BACKGROUND

Consultation: Mon 11-12pm and Tues 1-Consultation: Mon 11-12pm and Tues 1-3pm3pm

CRISP 1069CRISP 1069 6125038661250386 [email protected] [email protected]


Major differences between Major differences between domestic HRM and IHRMdomestic HRM and IHRM

Business activities e.g. taxation, international Business activities e.g. taxation, international relocation, expatriate remuneration, performance relocation, expatriate remuneration, performance appraisals, cross-cultural training and repatriationappraisals, cross-cultural training and repatriation

Increased complexities e.g. currency fluctuations, Increased complexities e.g. currency fluctuations, foreign HR policies and practices, different labor lawsforeign HR policies and practices, different labor laws

Increased involvement in employee’s personal life Increased involvement in employee’s personal life e.g. personal taxation, voter registration, housing, e.g. personal taxation, voter registration, housing, children’s education, health, recreation and spouse children’s education, health, recreation and spouse employmentemployment

Complex employee mix – cultural, political, religious, Complex employee mix – cultural, political, religious, ethical, educational and legal backgroundethical, educational and legal background

Increased risks e.g. emergency exits for serious Increased risks e.g. emergency exits for serious illness, personal security, kidnapping and terrorismillness, personal security, kidnapping and terrorism


Myths about globalizationMyths about globalization Myth #1Myth #1: Global = International: Global = International Myth #2Myth #2: Global strategy means doing : Global strategy means doing

same thing everywheresame thing everywhere Myth #3Myth #3: Globalizing = stateless : Globalizing = stateless

corporation, no national/community tiescorporation, no national/community ties Myth #4Myth #4: Globalization requires : Globalization requires

abandoning country images and valuesabandoning country images and values Myth #5Myth #5: Globalizing means tackling on : Globalizing means tackling on

acquisitions or alliances in other countries, acquisitions or alliances in other countries, without much integration/changewithout much integration/change

Myth #6Myth #6: A strategy must involves : A strategy must involves sales/operations in another countrysales/operations in another country


Strategies of international, multinational, Strategies of international, multinational, global & transnational organizationsglobal & transnational organizations

InternationalInternational company – transports its company – transports its business outside home country; each of its business outside home country; each of its operations is a replication of the company's operations is a replication of the company's domestic experience; structured domestic experience; structured geographically; and involves subsidiary geographically; and involves subsidiary general managers general managers

Companies offering multiple products often Companies offering multiple products often find it challenging to remain organized e.g. find it challenging to remain organized e.g. need to have a common information systems need to have a common information systems for accounting, financial and management for accounting, financial and management controls, and marketing. Most evolve to controls, and marketing. Most evolve to become multinational companiesbecome multinational companies



MultinationalMultinational company – grows and defines company – grows and defines its business on a worldwide basis, but its business on a worldwide basis, but continues to allocate its resources among continues to allocate its resources among national or regional areas to maximize the national or regional areas to maximize the total. total.



GlobalGlobal organizations – treat the organizations – treat the entire world as though it were one entire world as though it were one large country; may be the entire large country; may be the entire company or one or more of its company or one or more of its product lines; may operate with a product lines; may operate with a mixture of two or more mixture of two or more organizational structure organizational structure simultaneously. simultaneously.



Transnational organization - Transnational organization - Use Use specialized facilities to permit local specialized facilities to permit local responsiveness; more complex responsiveness; more complex coordination mechanism to provide coordination mechanism to provide global integrationglobal integration


Global efficiency and local responsiveness Global efficiency and local responsiveness of different types of firmsof different types of firms

GlobalGlobal TransnationalTransnational

InternationalInternational MultinationalMultinational

Global efficiency

HighLow

High

Local responsiveness


Orientation to international Orientation to international operationsoperations

(1) Australian organization with international (1) Australian organization with international operationsoperations All senior and many middle management All senior and many middle management

positions held by Australianspositions held by Australians Highly centralized in Australia, large head Highly centralized in Australia, large head

officeoffice Instruction and advice from Australian head Instruction and advice from Australian head

office to subsidiariesoffice to subsidiaries HR policies and practices are predominantly HR policies and practices are predominantly

Australian with some modification to satisfy Australian with some modification to satisfy foreign requirementsforeign requirements

Australian corporate cultureAustralian corporate culture



(2) Australian multinational organization(2) Australian multinational organization Localization of some management positions Localization of some management positions

but all top corporate positions held by but all top corporate positions held by AustraliansAustralians

Some decentralization to regional or area Some decentralization to regional or area headquartersheadquarters

Regional headquarters is the main source of Regional headquarters is the main source of communications; instructions from Aust head communications; instructions from Aust head office to regional headquartersoffice to regional headquarters

HR policies and practices are mixedHR policies and practices are mixed Mix of Australian and host country cultureMix of Australian and host country culture



(3) Australian global organization(3) Australian global organization All management positions are open to All management positions are open to

everyone regardless of nationalityeveryone regardless of nationality Decentralized decision makingDecentralized decision making Two-way or multiple-way communication Two-way or multiple-way communication

between headquartersbetween headquarters HR policies and practices are HR policies and practices are

benchmarked on best international benchmarked on best international practicespractices

International corporate cultureInternational corporate culture


Example from Japanese MNCs Example from Japanese MNCs Campbell, N. (1991). How Japanese multinationals work so well. Campbell, N. (1991). How Japanese multinationals work so well. PrismPrism, 4, 61-69., 4, 61-69.

1. Borderless structure and bottom-up decision-making 1. Borderless structure and bottom-up decision-making processesprocesses that encourage communication and information flow that encourage communication and information flow among all components of the company and extend the network to among all components of the company and extend the network to its key suppliers, distributors, and other business partners. its key suppliers, distributors, and other business partners.

2. 2. Custodial leadershipCustodial leadership that emphasizes values and vision and is that emphasizes values and vision and is skillfully unassertive, while energizing and challenging middle skillfully unassertive, while energizing and challenging middle managers with demanding targets. managers with demanding targets.

3. 3. Human resource managementHuman resource management, including socialization, training, , including socialization, training, and promotion via a hierarchy of ranks, job rotation, and appraisal and promotion via a hierarchy of ranks, job rotation, and appraisal systems that promote hard work, commitment, and competition systems that promote hard work, commitment, and competition among peers. among peers.

4. 4. Incremental planning and controlIncremental planning and control that help a company expand that help a company expand little by little, focusing on new products and the relentless pursuit of little by little, focusing on new products and the relentless pursuit of operating improvements, rather than "grand designs" for operating improvements, rather than "grand designs" for competitive advantage. competitive advantage.

5. 5. An extended family modelAn extended family model that encourages and rewards that encourages and rewards commitment. commitment.


IHRM - a shift in thinkingIHRM - a shift in thinkingLaurent (1986)Laurent (1986)

Explicit recognition by parent org of Explicit recognition by parent org of the existence of assumptions and the existence of assumptions and values of home & host cultures values of home & host cultures

Explicit recognition by parent org – Explicit recognition by parent org – ethnocentrism is neither good/bad, ethnocentrism is neither good/bad, has strengths and weaknesseshas strengths and weaknesses

Explicit recognition of subsidiaries’ Explicit recognition of subsidiaries’ preferences – which may be different preferences – which may be different


IHRM - a shift in thinkingIHRM - a shift in thinkingLaurent (1986)Laurent (1986)

Willingness to acknowledge cultural Willingness to acknowledge cultural difference – discuss and learndifference – discuss and learn

Genuine belief in creative and Genuine belief in creative and effective ways of managing people effective ways of managing people through cross-cultural through cross-cultural training/learningtraining/learning


Important lessons for global firmsImportant lessons for global firms

The need to manage changeThe need to manage change The need to respect local culturesThe need to respect local cultures The need to understand a The need to understand a

corporation’s culturecorporation’s culture The need to be flexibleThe need to be flexible The need to learnThe need to learn


Main challenges in IHRMMain challenges in IHRM High failure rates of expatriation and High failure rates of expatriation and

repatriationrepatriation Deployment – getting the right mix of skills Deployment – getting the right mix of skills

in the organization regardless of in the organization regardless of geographical locationgeographical location

Knowledge and innovation dissemination – Knowledge and innovation dissemination – managing critical knowledge and speed of managing critical knowledge and speed of information flowinformation flow

Talent identification and development – Talent identification and development – identify capable people who are able to identify capable people who are able to function effectivelyfunction effectively

Barriers to women in IHRMBarriers to women in IHRM International ethicsInternational ethics Language (e.g. spoken, written, body) Language (e.g. spoken, written, body)


Main challenges in IHRMMain challenges in IHRM Different labor lawsDifferent labor laws Different political climateDifferent political climate Different stage(s) of technological Different stage(s) of technological

advancementadvancement Different values and attitudes e.g. time, Different values and attitudes e.g. time,

achievement, risk takingachievement, risk taking Roles of religion e.g. sacred objects, Roles of religion e.g. sacred objects,

prayer, taboos, holidays, etcprayer, taboos, holidays, etc Educational level attainedEducational level attained Social organizations e.g. social institutions, Social organizations e.g. social institutions,

authority structures, interest groups, authority structures, interest groups, status systemsstatus systems


Strategies for managing a global Strategies for managing a global workforceworkforce

(1) Implement the aspatial career strategy(1) Implement the aspatial career strategy Get people from everywhere (geocentric Get people from everywhere (geocentric

approach) approach) Expats work in multiple countries during the Expats work in multiple countries during the

course of their careercourse of their career Gain a lot of knowledge about different Gain a lot of knowledge about different

cultures & operationscultures & operations Develops in-depth knowledgeDevelops in-depth knowledge Use previous knowledge for new assignmentUse previous knowledge for new assignment Extremely high costExtremely high cost Mainly managers, not techniciansMainly managers, not technicians



(2) Implement the awareness-building (2) Implement the awareness-building assignment strategy assignment strategy Expose a candidate to cultural training Expose a candidate to cultural training

exercisesexercises Usually for short term (3 months to one year)Usually for short term (3 months to one year) Family members usually not required to Family members usually not required to

relocaterelocate Usually used to train candidates for future Usually used to train candidates for future

assignmentsassignments Learn from foreign assignment and bring Learn from foreign assignment and bring

experience back to HQexperience back to HQ



(3) Implement the SWAT team strategy(3) Implement the SWAT team strategy Highly mobile teams for short term Highly mobile teams for short term

assignmentsassignments Deployed throughout the organization to Deployed throughout the organization to

different parts of the worlddifferent parts of the world No development agenda, plain No development agenda, plain

troubleshootingtroubleshooting Transfer technical knowledge to locals Transfer technical knowledge to locals

as they fix problemsas they fix problems E.g. technical troubleshootersE.g. technical troubleshooters



(4) Implement the virtual solutions (4) Implement the virtual solutions strategystrategy Collection of practices that exploit Collection of practices that exploit

electronic communicationelectronic communication E.g. internet, intranet, videoconferencing, E.g. internet, intranet, videoconferencing,

electronic databases, email, electronic electronic databases, email, electronic expert systemsexpert systems

Low cost and very fast in terms of Low cost and very fast in terms of disseminating knowledgedisseminating knowledge

Used by Xerox and FordUsed by Xerox and Ford


Key learning themesKey learning themes Understand the main Understand the main

differences between domestic differences between domestic HRM and international HRMHRM and international HRM

Able to demystify globalizationAble to demystify globalization Understand strategies Understand strategies

adopted by international, adopted by international, multinational, global and multinational, global and transnational organizationstransnational organizations

Important lessons to be learnt Important lessons to be learnt by global firmsby global firms

Understand the Understand the difficulties/challenges in IHRMdifficulties/challenges in IHRM

Strategies for managing a Strategies for managing a global workforceglobal workforce

Documents

Busn3025 Seminar 1 Introduction To Ihr Ma