BUSN3025 Seminar 1 Introduction to IHRMa

8/6/2019 BUSN3025 Seminar 1 Introduction to IHRMa

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Copyright 2003-2006, Chris Chan 1

BUSN3025BUSN3025

IINTERNATIONALNTERNATIONAL HHUMANUMAN

RRESOURCEESOURCE MMANAGEMENTANAGEMENT


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BACKGROUNDBACKGROUND

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

3pm3pm

CRISP 1069CRISP 1069

6125038661250386 [email protected]@anu.edu.au


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Major differences betweenMajor differences between

domestic HRM and IHRMdomestic HRM and IHRM Business activities e.g. taxation, international relocation,Business activities e.g. taxation, international relocation,

expatriate remuneration, performance appraisals, cross-expatriate remuneration, performance appraisals, cross-cultural training and repatriationcultural training and repatriation

Increased complexities e.g. currency fluctuations, foreignIncreased complexities e.g. currency fluctuations, foreignHR policies and practices, different labor lawsHR policies and practices, different labor laws

Increased involvement in employees personal life e.g.Increased involvement in employees personal life e.g.personal taxation, voter registration, housing, childrenspersonal taxation, voter registration, housing, childrenseducation, health, recreation and spouse employmenteducation, health, recreation and spouse employment

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


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Strategies of international, multinational,Strategies of international, multinational,

global & transnational organizationsglobal & transnational organizations

InternationalInternational company transports its businesscompany transports its businessoutside home country; each of its operations is aoutside home country; each of its operations is areplication of the company's domesticreplication of the company's domesticexperience; structured geographically; andexperience; structured geographically; and

involves subsidiary general managersinvolves subsidiary general managers Companies offering multiple products often find itCompanies offering multiple products often find it

challenging to remain organized e.g. need tochallenging to remain organized e.g. need tohave a common information systems forhave a common information systems foraccounting, financial and management controls,accounting, financial and management controls,

and marketing. Most evolve to becomeand marketing. Most evolve to becomemultinational companiesmultinational companies


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MultinationalMultinational company grows and definescompany grows and defines

its business on a worldwide basis, butits business on a worldwide basis, but

continues to allocate its resources amongcontinues to allocate its resources among

national or regional areas to maximize thenational or regional areas to maximize thetotal.total.


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GlobalGlobal organizations treat theorganizations treat the

entire world as though it were oneentire world as though it were one

large country; may be the entirelarge country; may be the entire

company or one or more of itscompany or one or more of its

product lines; may operate with aproduct lines; may operate with a

mixture of two or moremixture of two or more

organizational structureorganizational structuresimultaneously.simultaneously.


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Transnational organization -Transnational organization - UseUse

specialized facilities to permit localspecialized facilities to permit local

responsiveness; more complexresponsiveness; more complex

coordination mechanism to providecoordination mechanism to provideglobal integrationglobal integration


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Global efficiency and local responsivenessGlobal efficiency and local responsiveness

of different types of firmsof different types of firms

Global Transnational

International Multinational

Globalefficiency

HighLow

High

Local responsiveness


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Orientation to internationalOrientation to international

operationsoperations

(1) Australian organization with international(1) Australian organization with international

operationsoperations All senior and many middle managementAll senior and many middle management

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

Instruction and advice from Australian headInstruction and advice from Australian head

office to subsidiariesoffice to subsidiaries

HR policies and practices are predominantlyHR policies and practices are predominantlyAustralian with some modification to satisfyAustralian with some modification to satisfy

foreign requirementsforeign requirements

Australian corporate cultureAustralian corporate culture


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

all top corporate positions held by Australiansall top corporate positions held by Australians

Some decentralization to regional or areaSome decentralization to regional or areaheadquartersheadquarters

Regional headquarters is the main source ofRegional headquarters is the main source of

communications; instructions from Aust headcommunications; 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


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(3) Australian global organization(3) Australian global organization

All management positions are open toAll management positions are open to

everyone regardless of nationalityeveryone regardless of nationality

Decentralized decision makingDecentralized decision makingTwo-way or multiple-way communicationTwo-way or multiple-way communication

between headquartersbetween headquarters

HR policies and practices are benchmarkedHR policies and practices are benchmarked

on best international practiceson best international practices

International corporate cultureInternational corporate culture


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Example from Japanese MNCsExample 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 processes1. Borderless structure and bottom-up decision-making processes

that encourage communication and information flow among allthat encourage communication and information flow among allcomponents of the company and extend the network to its key suppliers,components of the company and extend the network to its key suppliers,distributors, and other business partners.distributors, and other business partners.

2.2. Custodial leadershipCustodial leadership that emphasizes values and vision and is skillfullythat emphasizes values and vision and is skillfullyunassertive, while energizing and challenging middle managers withunassertive, while energizing and challenging middle managers withdemanding targets.demanding targets.

3.3. Human resource managementHuman resource management, including socialization, training, and, including socialization, training, andpromotion via a hierarchy of ranks, job rotation, and appraisal systemspromotion via a hierarchy of ranks, job rotation, and appraisal systemsthat promote hard work, commitment, and competition among peers.that promote hard work, commitment, and competition among peers.

4.4. Incremental planning and controlIncremental planning and control that help a company expand little bythat help a company expand little by

little, focusing on new products and the relentless pursuit of operatinglittle, focusing on new products and the relentless pursuit of operatingimprovements, rather than "grand designs" for competitive advantage.improvements, rather than "grand designs" for competitive advantage.

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


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

Explicit recognition by parent org ofExplicit recognition by parent org of

the existence of assumptions andthe existence of assumptions and

values of home & host culturesvalues 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 subsidiariesExplicit recognition of subsidiaries

preferences which may be differentpreferences which may be different


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

Willingness to acknowledge culturalWillingness to acknowledge cultural

difference discuss and learndifference discuss and learn

Genuine belief in creative andGenuine belief in creative and

effective ways of managing peopleeffective ways of managing people

through cross-culturalthrough cross-cultural

training/learningtraining/learning


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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 aThe need to understand acorporations culturecorporations culture

The need to be flexibleThe need to be flexible

The need to learnThe need to learn


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Main challenges in IHRMMain challenges in IHRM

High failure rates of expatriation andHigh failure rates of expatriation andrepatriationrepatriation Deployment getting the right mix of skillsDeployment getting the right mix of skills

in the organization regardless ofin the organization regardless ofgeographical locationgeographical location

Knowledge and innovation dissemination Knowledge and innovation dissemination managing critical knowledge and speed ofmanaging critical knowledge and speed ofinformation flowinformation flow

Talent identification and development Talent identification and development identify capable people who are able toidentify capable people who are able tofunction 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)


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Main challenges in IHRMMain challenges in IHRM

Different labor lawsDifferent labor laws Different political climateDifferent political climate Different stage(s) of technological advancementDifferent stage(s) of technological advancement 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, prayer,Roles of religion e.g. sacred objects, prayer,

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

authority structures, interest groups, statusauthority structures, interest groups, statussystemssystems


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Strategies for managing a globalStrategies for managing a global

workforceworkforce(1) Implement the aspatial career strategy(1) Implement the aspatial career strategy

Get people from everywhere (geocentric approach)Get people from everywhere (geocentric approach)

Expats work in multiple countries during the course of theirExpats work in multiple countries during the course of their

careercareer

Gain a lot of knowledge about different cultures & operationsGain a lot of knowledge about different cultures & 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


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workforceworkforce

(2) Implement the awareness-building assignment(2) Implement the awareness-building assignment

strategystrategy Expose a candidate to cultural training exercisesExpose a candidate to cultural training exercises

Usually for short term (3 months to one year)Usually for short term (3 months to one year)

Family members usually not required to relocateFamily members usually not required to relocate

Usually used to train candidates for futureUsually used to train candidates for future

assignmentsassignments

Learn from foreign assignment and bring experienceLearn from foreign assignment and bring experience

back to HQback to HQ


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workforceworkforce

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

assignmentsassignments

Deployed throughout the organization toDeployed throughout the organization todifferent parts of the worlddifferent parts of the world

No development agenda, plainNo development agenda, plaintroubleshootingtroubleshooting

Transfer technical knowledge to localsTransfer technical knowledge to localsas they fix problemsas they fix problems

E.g. technical troubleshootersE.g. technical troubleshooters


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workforceworkforce

(4) Implement the virtual solutions strategy(4) Implement the virtual solutions strategy Collection of practices that exploit electronicCollection of practices that exploit electronic

communicationcommunication

E.g. internet, intranet, videoconferencing, electronicE.g. internet, intranet, videoconferencing, electronic

databases, email, electronic expert systemsdatabases, email, electronic expert systems Low cost and very fast in terms of disseminatingLow cost and very fast in terms of disseminating

knowledgeknowledge

Used by Xerox and FordUsed by Xerox and Ford


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Key learning themesKey learning themes

Understand the main differencesUnderstand the main differencesbetween domestic HRM andbetween domestic HRM andinternational HRMinternational HRM

Able to demystify globalizationAble to demystify globalization Understand strategies adoptedUnderstand strategies adopted

by international, multinational,by international, multinational,global and transnationalglobal and transnationalorganizationsorganizations

Important lessons to be learntImportant lessons to be learntby global firmsby global firms

Understand theUnderstand thedifficulties/challenges in IHRMdifficulties/challenges in IHRM Strategies for managing a globalStrategies for managing a global

workforceworkforce

Documents

BUSN3025 Seminar 1 Introduction to IHRMa