Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 14-1 Human Resource Management 11 th Edition Chapter 14 GLOBAL HUMAN RESOURCE MANAGEMENT

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 14-2 HRM in Action: Global Bribery Foreign Corrupt Practices Act - prohibits U.S. firms from bribing foreign officials 43% reported that they had lost new business in last 5 years because a competitor had paid a bribe Conducting business globally exposes U.S. and other companies to an environment that permits bribery

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 14-3 HRM in Action: Global Bribery (Cont.) Law has teeth Lockheed Corporation paid approximately $25 million Titan Corporation paid $28.5 million President of American Rice, Inc. sentenced to 63 months in prison Not having ability to use bribery as a tool of doing business has been costly for American companies

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 14-4 Evolution of Global Business Not long ago, Mercedes-Benz was still a German company, General Electric was American, and Sony was Japanese Many United States firms such as Coca-Cola, Procter & Gamble, and Texas Instruments do most of their business and employ most of their workers outside U.S. Many non-U.S. companies make products here such as Toyota – Americans making cars in Kentucky

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 14-5 Evolution of Global Business (Cont.) Exporting - Selling abroad retaining foreign agents and distributors Licensing - Organization grants foreign firm right to use intellectual properties Franchising - Parent company grants another firm right to do business in prescribed manner

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 14-6 Evolution of Global Business (Cont.) Multinational corporation - Firm based in one country and produces goods or provides services in one or more foreign countries Global corporation - Corporate units in countries are integrated to operate as one organization worldwide – Operates as if entire world were one entity Transnational corporation - Moves work to places with talent to handle the job and time to do it at the right cost

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 14-7 Global Professional in Human Resources New certification for HRCI Strategic international HR management Organizational effectiveness and employee development Global staffing International assignment management Global compensation International employee relations and regulations

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 14-8 Global Human Resource Management Global HR managers develop and work through integrated global human resource management system similar to one they experience domestically

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 14-9 Environment of Global Human Resource Management 1 Human Resource Management Other Functional Areas OperationsMarketing Finance Legal Considerations Economy Technology Society Shareholders Unions CustomersCompetitionLabor Market Human Resource Development Compensation Staffing Employee and Labor Relations Safety and Health INTERNAL ENVIRONMENT EXTERNAL ENVIRONMENT UNITED STATES GLOBAL ENVIRONMENT Unanticipated Events

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Global Staffing Types of Global Staff Members Approaches to Global Staffing

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Types of Global Staff Members Expatriate - Employee working in firm who is not citizen of country in which firm is located but citizen of country where organization is headquartered Host-country national - Employee’s nationality same as location of subsidiary Third-country national - Citizen of one country, working in second country, and employed by organization headquartered in third country

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Approaches to Global Staffing Ethnocentric staffing - Companies primarily hire expatriates to staff higher- level foreign positions Polycentric staffing - When more host- country nationals are used throughout the organization, from top to bottom

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Approaches to Global Staffing (Cont.) Regiocentric staffing - Regional groups of subsidiaries reflecting organization’s strategy and structure work as a unit Geocentric staffing - Uses worldwide integrated business strategy

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Selecting Expatriates Self-selection - Employees determine if they are right for global assignment (family also) Creating a candidate pool Technical skills assessment Making a mutual decision

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Background Investigation Conducting background investigations is equally, or more, important Differences across cultures and countries often put up barriers to overcome Each country has own laws, customs, and procedures for background screenings

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Trends & Innovations: American Companies Hiring Foreign-Born Executives Growing number of American companies are hiring foreign-born CEOs PepsiCo, Coca-Cola Company, and Citigroup are examples Many believe that foreign executives will become more common as companies confront the expanding global market

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Global Human Resource Development Expatriate Training & Development Continual Development: Online Assistance and Training Repatriation Orientation and Training

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Expatriate Preparation and Development Program Expatriate Preparation and Development Prior to Departure: Orientation and Training During Assignment: Continual Development Near Completion: Repatriation Orientation Training Language Culture History Local Customs Living Conditions Expanding Skills Career Planning Home-Country Development U.S. Lifestyle U.S. Workplace U.S. Employees

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Global E-learning Globalization has created special need for e-learning Challenges for global e-learning implementation are language and localization issues Companies that want to offer courses in several languages usually turn to translators

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Compensation for Host-Country Nationals Organizations should think globally but act locally Compensation - Normally, it is slightly above prevailing wage rates in the area Variations in laws, living costs, tax policies, and other factors all must be considered

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Compensation for Host-Country Nationals (Cont.) Factors to consider: minimum wage requirements (often differ from country to country and even from city to city within a country); working time information such as annual holidays, vacation time and pay, paid personal days, standard weekly working hours, probation periods, and overtime restrictions and payments; and hiring and termination rules and regulations covering severance practices

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Compensation for Host-Country Nationals (Cont.) Culture often plays part North American practices encourage individualism and high performance Continental European programs typically emphasize social responsibility Traditional Japanese approach considers age and company service as primary determinants of compensation

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Expatriate Compensation Expatriate compensation provides exceptional challenges Largest expatriate costs include overall remuneration, housing, cost-of-living allowances and physical relocation U.S. citizens living overseas can exclude up to $80,000 of income earned abroad

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Expatriate Compensation (Cont.) Country’s culture can affect compensation People in U.S. derive great status from high pay Nations in large parts of Europe and Asia shun conspicuous wealth In Italy, teamwork is more valued than individual initiative

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Global Safety and Health Important because employees who work in safe environment and enjoy good health more likely to be productive and yield long-term benefits to organization U.S.-based global operations are often safer and healthier than host- country operations, but not as safe as similar operations in U.S.

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Global Employees and Labor Relations Unionism maintains much of its strength abroad Foreign unions less adversarial with management

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Global Employees and Labor Relations in European Countries Codetermination: Requires firms to have union or worker representatives on their boards of directors, is very common Laws make it hard to fire workers, so companies are reluctant to hire Generous and lengthy unemployment benefits discourage jobless from seeking new work

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Global Employees and Labor Relations in South American Countries In countries such as Chile, collective bargaining for textile workers, miners, and carpenters is prohibited. Unions are generally allowed only in companies of 25 workers or more. Practice has encouraged businesses to split into small companies to avoid collective bargaining.

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall North American Free Trade Agreement (NAFTA) Between Canada, Mexico, and United States Facilitated movement of goods across boundaries within North America Free-trade zone of over 400 million people Combined gross domestic profit of about $12 trillion

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Central American Free Trade Agreement Ratified by America’s Congress after long political battle, and signed into law in 2005 Could provide huge economic boost for region

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Legal and Political Factors Nature and stability of legal and political systems vary throughout globe

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Legal and Political Factors (Cont.) Does operating under local laws and customs free a company of all ethical considerations? Continued child labor abuses in apparel and textile industries Indentured servitude exists for many foreign workers in Asian factories

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Tariffs and Quotas Tariffs - Taxes collected on goods shipped across national boundaries Quotas - Limit number or value of goods imported across national boundaries

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Virtual Teams in Global Environment Necessity of everyday working life Enable companies to accomplish things more quickly and efficiently

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall Difficulties that Virtual Teams Confront Do not feel as connected or committed to team Communication problems directly proportional to number of time zones separating them Language problems

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