INTERNATIONAL BUSINESS

INSTRUCTOR: HOANG THI QUE HUONG SESSION

 CHAPTER 18:
GLOBAL HUMAN RESOURCE
MANAGEMENT (HRM)
LEARNING OBJECTIVES

¡ What are the pros and cons of different approaches to

staffing policy in international business?
¡ Why do managers fail in foreign postings? How can such
managers be helped to succeed?
¡ What is the role of training, management development, and
compensation practices in managing international human
resources?
STRATEGIC ROLE OF INTERNATIONAL HRM

The Role of Human Resources in Shaping Organization Architecture

ETHNOCENTRIC POLICIES
POLYCENTRIC POLICIES
GEOCENTRIC POLICIES
STAFFING POLICIES

When is each policy

appropriate?
STAFFING POLICY

Comparison of Staffing Approaches

EXPATRIATE MANAGEMENT

How should the

expatriate managers be
paid?

Game: benefits negotiation

 EXPATRIATE MANAGEMENT
Expatriate (Expat): professionals or skilled workers sent abroad by
their companies
Benefits of expat life: refer HSBC video
Reasons for expatriate failure:
• Problems of spouses to adapt to new environment
• Family problems
• Manager’s problems to fit into new environment
• Lack of competence with regard to new role and responsibilities
• Personal and emotional problems of managers
EXPATRIATE MANAGERS

¦ For European firms, only one reason was found to

consistently explain expatriate failure
Ø The inability of the manager’s spouse to adjust to a new
environment
¦ For Japanese firms, the reasons for failure were
Ø The inability to cope with larger overseas responsibility
Ø Difficulties with the new environment
Ø Personal or emotional problems
Ø A lack of technical competence
Ø The inability of a spouse to adjust
EXPATRIATE SUCCESS PREDICTORS

¡ Self-orientation
¡ Strengthen self-esteem, self-confidence, mental well-being
¡ Adapt to food, music, sport, outside interests
¡ Superior technical competency
¡ Others-orientation
¡ Enhance ability to interact effectively with host nationals
¡ Relationship development, willingness to communicate
¡ Perceptual ability
¡ Understand why people in other countries behave the way they do
¡ Non-judgmental, non-evaluative in interpreting others’ behavior
¡ Cultural toughness
¡ How tough is host culture to adjust to?
PUTTING IT INTO PRACTICE
¦Dining with colleagues:
Do you have a global
mindset?
TRAINING FOR EXPATRIATE MANAGERS

Question: How can firms reduce expatriate failure?

Answer:
¡ To reduce expatriate failure, firms should provide
1. Cultural training - seeks to foster an appreciation for the host country's
culture
2. Language training - improves the effectiveness of managers and helps
them better relate to the foreign country
3. Practical training - helps the expatriate manager and family ease into
day-to-day life of the host country
OTHER EXPATRIATE ISSUES

¡ Performance appraisal
¡ Two groups with conflicting perspectives/cultures appraise
the expatriate: home managers, host managers
¡ Compensation
¡ Different national standards
¡ Expatriate pay issues: base pay, cost-of-living, housing,
education, hardship, foreign-service-premium, double-
taxation, medical/pension benefits, home leave
OTHER IHRM ISSUES

¡ International labor relations

¡ Concerns of organized labor: cultural and legal differences
affect attitudes towards ...
¡ Better pay, job security, working conditions
¡ Bargaining power with management
¡ Strategy of organized labor
¡ Establish international, cross-border labor organizations
¡ Lobby national governments to restrict MNC activities
¡ Approach to labor relations
¡ Degree to which MNC labor relations are centralized or
decentralized (integration vs responsiveness…)
 PUTTING IT INTO PRACTICE
¦Manufacturing location matters:
Labor costs and competitive
advantage in the auto industry

Assembly line wages

China: $3/hour
Mexico: $40/day
U.S.: $25/hour
¡ How compensation should be adjusted
to reflect national differences in
economic circumstances and practices?
Case: Global Compensation Practices at
McDonald's