Northern Arizona University
College of Business Administration

MGT 310--Human Resource Management

Ch 15: International HR Management

• Managing across borders

  • Types of organizations--international, multinational, global, transnational--see Fig. 15.1, p. 641

  • Cultural environment--communication, religion, values, ideologies, education, social structure (see Fig 15.3, p 645)

    • Taboos, rituals, attitude toward time, social stratification, kinship systems...

    • Require different strategies, structures, and management styles

      • Local differences encouraged--28%

      • Guiding principles with subsidiaries/regions defining own HR strategy--28%

      • Local differences minimized--18%

  • Staffing

    • Send people from home country--expatriates or home-country nationals (early stages)

    • Hire host-country nationals (later stages)

    • Hire third-country nationals

  • Recruitment

    • Regulations vary--foreign labor, disabled, war veterans, displaced persons

      • Work permit or visa restrictions

      • Invited foreign workers--guest workers

    • Approaches--search firms, referrals, radio announcements, informal approaches

    • Indirect costs--language training, health services, recruitment, transportation...

  • Selection

    • US--best qualified (in theory at least)

    • Other countries--family ties, social status, language, common origin...

      • Global (Levi Strauss)--p. 651

      • Core and augmented skills--see HRM 2, p. 653

      • Expatriates--see Fig. 15.6, p. 655 (top)

    • Selection methods--similar to US

      • Civil Rights Act applies to employees working for US companies overseas

    • Failure rate--25-50%

      • Causes--see Fig 15.7, p. 655 (bottom)

      • Biggest factor--spouse's inability to adjust

    • Women going abroad

      • Prejudice against women in own country does not necessarily translate to foreign nationals (viewed first as foreigners)--see HRM 3, p. 653

      • Success rate--97%

  • Training & development

    • Training skills--similar to US, more emphasis on awareness of global issues

    • Training content

      • Language

        • How people think and act in their relations with others (see exs. p. 657 & gestures HRM 4, p. 659)

      • Cultural training

      • Leadership

        • US--medium democratic/autocratic

        • South America/Europe--autocratic

        • Japan--participatory

    • Career development

      • Personal and company benefits

      • Repatriation--transition back from international assignment

        • Issues--reduced responsibilities, few promotions, no longer know people who can help

        • See Guidelines HRM 6, p. 665

    • Managing personal and family life

      • Culture shock--unable to communicate, read signs...frustrations increase

      • Two-career couples

  • Compensation--complex

    • Motivation

      • Americans--money as motivator

      • Other cultures--respect, family, job security, personal life, social acceptance, advancement, power

    • Host-country employees

      • Forces driving pay--see Fig. 15.11, p. 666

        • Hour, day, piece-rate

        • Seniority

        • Avoid upsetting local compensation practices

      • Benefits--frequently higher, legislated

    • Host-country managers

      • Local salary levels

      • Increasing international competition

    • Expatriate managers

      • Balance-sheet approach

        • Base rate

        • COLA for location

        • Incentive premiums--mobility, hardship (about 15%)

        • Assistance programs--moving/storage, automobile, education

        • Total--3-5 times home-country salary

        • Source of data--US Dept of State

      • Localization (host-based pay)

        • Length of stay--extended or permanent

        • Employee motivated assignment

  • Performance appraisal

    • Divided loyalties--home/host countries--different expectations

      • Day-to-day oversight

      • 360-degree appraisal gaining favor (but cultural differences)

    • Performance criteria

      • Expatriates

        • Full range of responsibility vs. "easy" criteria (productivity, profits, market share)

        • Difficulty factors

      • Feedback to superiors--support, obstacles, suggestions, own performance

  • Labor relations

    • Unions--varies

      • Europe

        • National employee associations representing a particular industry

        • More political power ... lessening economic power

        • Often include salaried employees, including management

      • Illegal in some countries

      • China--only one

    • Collective bargaining--vary widely, government role, political pressure

    • International labor organizations

      • International Confederation of Free Trade Unions--expertise and resources

      • International Labor Organization--agency of UN; does research and endorses working condition standards

    • Labor participation in management

      • Europe--employee representation by law--safety and hygiene committees, worker councils, boards of directors (Germany--codetermination--shareholders/employees represented in equal numbers when over 2000 employees)