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Describe the growth of international business Identify and discuss global issues in international human resource management Discuss the human resource management in international business

Identify and discuss domestic issues in international human resource management Describe the issues involved in managing international transfers and assignments Summarize the issues in international labor relations

The Growth of International Business The British Empire was built around the financial and business interests of the British nobility Forces that shaped today’s competitive international business environment began to emerge in the years following World War II By the late 1970s, businesses from other countries emerged as major in the world economy

The Growth of International Business Developments around the world have affected the new global economy The growth of population has made nations interdependent and encourages international trade Growth of regional alliances has substantial effects on the global business community

3.2 Global Issues in International Human Resource Management

International Human Resource Management Primarily uses parent-country nationals to staff higher-level foreign positions Ethnocentric staffing model Calls for the dominant use of host-country nationals throughout the organization Polycentric staffing model Puts parent-country, host-country, and third-country nationals all in the same category, with the firm attempting to always hire the best person available for a position Geocentric staffing model

Understanding the Cultural Environment Culture: Set of values that helps an organization’s members understand what it stands for, how it does things, and what it considers important Cultural differences directly affect business practices in international situations Language is an important cultural dimension that affects international HRM practices Roles that exist in different cultures affects international business

3.3 Political and Legal Issues of International Business

The Human Resource Function in International Business General human resource issues in international business Discrimination Determination of the appropriate source of employees Complex training and development challenges Working conditions, compensation, and the cost of living

Strategies for Competing in the International Environment Process of making a product in the firm’s domestic marketplace and selling it to another country Exporting Involves one company granting its permission to another company in a foreign country to manufacture or market its goods in its local market Licensing Occurs when a firm headquartered in one country builds or purchases operating facilities Direct foreign investment Two or more firms cooperate in the ownership or management of an operation on an equity basis Joint venture

Domestic Issues in International Human Resource Management Local recruiting and selection issues Local training issues Local compensation issues

Managing International Transfers and Assignments Expatriates and corporate international strategy Expatriates: Employees who are sent by a firm to work in another country Firm should implement a knowledge contract Organization systematically debriefs expatriate managers to make sure it has all the information acquired by the manager

Managing International Transfers and Assignments Selecting expatriates Define skills and abilities required to do the job Define skills and abilities required to work in a foreign location Training expatriates Language training Classroom training concerned with the history of the country or the area or the daily living conditions Training on social manners and issues in social exchanges

Managing International Transfers and Assignments Compensating expatriates Jointly determined by labor market forces, professional licensing requirement, standard of living, occupational status, and government regulations Hardship premium: Additional financial incentive offered to individuals to entice them to accept a less attractive international assignment Repatriation - Requires adjustment on both professional and personal levels

International Labor Relations Processes of dealing with employees who are organized into labor unions Heavily regulated by laws Different norms exist in countries about the relationships between unions and management

Forces that shaped today’s competitive international business environment began to emerge in the years following World War II Issues in international human resource management include development of strategies, understanding the cultural environment, and understanding political and legal environment

Expatriates are employees who are sent by a firm to work in another country International labor relations are the processes of dealing with employees who are organized into labor unions

Ethnocentric staffing model Polycentric staffing model Geocentric staffing model Culture Exporting Licensing Direct foreign investment Joint venture (strategic alliance) Expatriates Hardship premium (foreign service premium)