Human Resouces Management

International Executive Master of Business Administration

Human Resources Management

http://www.pgsm.edu.vn

HUMAN RESOURCE
MANAGEMENT
Assoc. Prof. NGUYEN MINH DUC
PhD in Economics (Auburn University, USA)

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PGSM International Executive MBA Program

 Human Resouces Management

HUMAN RESOURCE
MANAGEMENT
Assoc. Prof. NGUYEN MINH DUC
PhD in Economics at Auburn University, USA
Lecturers in various universities in HoChiminh City: University of Economics, Foreign
Trade University, Open University, Vietnam National University (University of
Economics and Laws), TonDucThang University, Van Hien University, NongLam
University,…

NGUYENMINHDUC

HUMAN RESOURCE
MANAGEMENT

CHAPTER 9
GLOBAL HUMAN RESOURCE MANAGEMENT

NGUYEN MINH DUC

Assoc. Prof.
PhD in Economics at Auburn University, USA

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PGSM International Executive MBA Program

 Human Resouces Management

Staffing policy:
 Selecting individuals with requisite
skills to do a particular job.
THE STRATEGIC  Tool for developing and
promoting corporate culture.
ROLE OF
INTERNATIONAL
HRM

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Strategy, Structure and Control Systems

International Strategy

Structure Multidomestic International Global Transnational

and Controls
Centralization Decentralized Core competency Some centralized Mixed centralized
of operating centralized and decentralized
Rest decentralized Informal matrix
decision
Horizontal Worldwide area Worldwide Worldwide Informal matrix
differentiation structure product division product division
Need for
coordination Low Moderate High Very high

Integrating None Few Many Very many

mechanisms
Performance Low Moderate High Very high
Ambiguity
Need for Low Moderate High Very high
cultural controls
Table 18.1
© McGraw Hill Companies, Inc., 2000 18-2 NGUYENMINHDUC

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 Human Resouces Management

Ethnocentric:
All key management positions are filled by parent-company nationals.
Polycentric:
Host-country nationals manage subsidiaries, parent-company nationals have key
positions at headquarters.
Geocentric:
Seek best people for key jobs, regardless of nationality.

TYPES OF STAFFING POLICY 18-3

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COMPARISON OF STAFFING APPROACHES

Staffing Strategic
Approach Appropriateness Advantages Disadvantages

Ethnocentric International Overcomes lack of Produces resentment

qualified managers in host country
host nation
Unified culture Can lead to cultural
Helps transfer core myopia
competencies
Polycentric Multidomestic Alleviates cultural Limits career mobility
myopia Isolates headquarters
Inexpensive to from foreign
implement subsidiaries
Geocentric Global and
Uses human resources National immigration
Transnational efficiently policies may limit
Helps build strong implementation
culture and informal Expensive
management network

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 Human Resouces Management

THE EXPATRIATE PROBLEM

Expatriate failure:
Premature return of the expatriate manager to his/her
home country.
Cost of failure is high:
Estimate - 3X the expatriate’s annual salary plus the
cost of relocation (impacted by currency exchange
rates and assignment location).
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EXPATRIATE FAILURE RATES

Recall Rate Percent Percent of Companies
US Multinationals
20 - 40% 7%
10 - 20% 69
< 10 24
European Multinationals
11 - 15% 3%
6 - 10 38
<5 59
Japanese Multinationals
11 - 19% 14%
6 - 10 10
<5 76

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 Human Resouces Management

REASON FOR EXPATRIATE FAILURE

US Multinationals
 Inability of spouse to adjust.
 Manager’s inability to adjust.
 Other family problems.
 Manager’s personal or emotional
immaturity.
 Inability to cope with larger
overseas responsibilities.
Japanese Firms
 Inability to cope with larger
overseas responsibilities.
 Difficulties with the new
environment.
 Personal or emotional problems.
 Lack of technical competence.
 Inability of spouse to adjust.

European Multinationals: Inability of spouse to adjust.

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EXPATRIATE SELECTION
Self-orientation:
 Strengthen self-esteem, self-confidence and mental well-being.
Others-orientation:
 Enhance ability to interact with host-country nationals.
Perceptual ability:
 The ability to empathize - understand why people in host-country behave the way
they do.
Cultural toughness:
 How well an expatriate adjusts to a particular posting tends to be related to the
country of assignment.

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 Human Resouces Management

TRAINING FOR EXPATRIATE MANAGERS

Cultural:
 Seeks to foster an appreciation of the host-country’s
culture.
Language:
 Can improve expatriate’s effectiveness, relate more
easily to culture and fostered a better firm image.
1. Culture
Practical: 2. Language

 Ease into day-to-day life of the host country. 3. Practical

18-9 NGUYENMINHDUC

REPATRIATION OF EXPATRIATES
Didn’t know what position
they hold upon return.
Firm vague about return,
role and career progression.
Took lower level
job.
Leave firm within
one year.
Leave firm within
three years

10 20 30 40 50 60 70

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 Human Resouces Management

PERFORMANCE APPRAISAL
Problems:
Unintentional bias.
 Host-nation biased by cultural frame of reference.
 Home-country biased by distance and lack of experience working
abroad.
Expatriate managers believe that headquarters
unfairly evaluates and appreciates them.
 Many believe a foreign posting does not benefit their career.

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GUIDELINES FOR PERFORMANCE APPRAISAL

More weight given to on-site manager’s evaluation.
Former expatriate who served in the same location should assist
home-office manager with the evaluation.
If foreign on-sight manager preparing evaluation, home-office
manager consulted before evaluation is finalized.

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 Human Resouces Management

A TYPICAL BALANCE SHEET

Additional
Home and Income Taxes Costs Paid by
Host-Country Company
Income Taxes
Premiums and
Incentives
Housing
Income Taxes Housing Income Taxes

Housing Goods and Goods and Housing

Services Services
Goods and Goods and
Services Services
Reserve Reserve Reserve Reserve
Home-Country Host-Country Host-Country Home- Country
Salary Costs Costs Paid by Equivalent
Company and Purchasing Power
from Salary

NGUYENMINHDUC 18-13

INTERNATIONAL LABOR RELATIONS

Key issue: degree to which organized labor can limit the
choices of an international business.
Labor concerns:
 Counter bargaining power with threat to move jobs off-shore.
 Keep high-skill work at home and ship low-skill work to foreign plants.
 Importing employment practices and contractual agreements from the
home-country.

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 Human Resouces Management

STRATEGY OF INTERNATIONAL LABOR

Try to establish international labor organizations.
Lobby legislatures to restrict multinationals.
Use United Nations to regulate multinationals.

Efforts have not

been successful.
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MULTINATIONALS’ APPROACH TO LABOR RELATIONS

Decentralize: labor laws, union power and nature of collective
bargaining varies from country to country.
Centralize:
 Want to rationalize global operations.
 Need to control labor costs and maximize threat of move to lower cost
country.
 Before move, get new union approval for work practices.

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 Human Resouces Management

ANTI-GLOBALIZATION AND COVID-19

The US – China relationships have been worse
The step-back of international institutions for separate benefits
More challenges in international relationships over the world.
Covid-19: a common enemy or divider of nations, why it is serious?

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