INTERNATIONAL HR MANAGEMENT

GOING INTERNATIONAL u Exporting u Licensing –One firm leases the right to use its intellectual property to another firm in exchange for a fee u Franchising –An independent organization operates a business under the name of another in exchange for a fee u Foreign Direct Investment –Joint Ventures; strategic alliances –Sole ownership

International Business Strategies u Multilocal –Decentralized –Collection of independently operating organizations u Export Market –Parent company maintains centralized control u Global approach –Hybrid combination of multilocal and export

Domestic vs. International HR u Basic function and objective remains the same: procurement, allocation, and utilization of people. u Primary difference between IHR and domestic HR lies in the complexity of operating in different countries with different cultures and laws. u Degree of complexity depends on: –Extent of cultural diversity –Approach taken to multinational entry –Top management attitudes (parochialism)

International HR Strategies u Ethnocentric –Centralized HR –Managed by Parent Country Nationals (PCNs) –Pay based on local market for employees; home country for PCNs –Training aimed at KSAs to perform the job u Polycentric –Decentralized HR –Managed by Home Country Nationals (HCNs) –Pay based on local market –Training given added importance

International HR Strategies u Geocentric –Global workforce deployed throughout the world –Positions filled by most qualified regardless of nationality: HCNs, PCNs, or TCNs, –Compensation based on value-added –Training and development emphasized u Regiocentric

Why Do International Managers Fail? u u Does it change the essence of HR? u u Culture Shock u u Cultural arrogance ( Parochialism) u u Cultural Insensitivity u u The Key success factor? – –Cultural adaptability

CULTURAL ENVIRONMENT u Language u Communication styles –Nonverbal –Direct vs. Indirect –Greeting: physical and verbal u Space –Structural & interpersonal u Time orientation –Punctuality –Monochronic vs. Polychronic u Religion u Respect/formality u Consensus seeking

HOFSTEDE’S DIMENSIONS u Individualism vs. Collectivism u Power Distance u Uncertainty Avoidance u Masculinity vs. femininity u Long-term orientation