© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

3–2 Learning Objectives After studying this chapter, you should be able to: 1.Describe the growth of international business 2.Identify and discuss global issues in international human resource management 3.Discuss the human resource management function in international business 4.Identify and discuss domestic issues in international human resource management 5.Describe the issues involved in managing international transfers and assignments 6.Summarize the issues in international labor relations

© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3–3 The Growth of International Business During the 1950s, the U.S. and its economy was the dominant force.During the 1950s, the U.S. and its economy was the dominant force. From the 1960s onward, the U.S. has been challenged by other developing countries.From the 1960s onward, the U.S. has been challenged by other developing countries. Recent widespread economic downturns in world markets reflect the extent to which these markets have become interrelated.Recent widespread economic downturns in world markets reflect the extent to which these markets have become interrelated.

© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3–4 Global Business Centers

© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3–5 International Hiring Challenges Understanding the cultureUnderstanding the culture Being aware of motivational aspectsBeing aware of motivational aspects Evaluating employee performanceEvaluating employee performance Understanding technology awareness and usageUnderstanding technology awareness and usage Recognizing preferred communication stylesRecognizing preferred communication styles Observing the preferred management structure.Observing the preferred management structure. Observing the organizational cultureObserving the organizational culture

© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3–6 Global Issues in International HRM

© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3–7 International HRM Strategies Ethnocentric staffing model Geocentric staffing model International Staffing Considerations Polycentric staffing model

© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3–8 International HRM Strategy Ethnocentric Staffing ModelEthnocentric Staffing Model  Assumes that home-based perspectives take precedence over local perspectives and issues positions to parent country nationals.  Primarily uses parent-country nationals to staff higher level foreign positions.

© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3–9 International HRM Strategy Polycentric Staffing ModelPolycentric Staffing Model  Makes dominant use of host-country nationals throughout the organization. Geocentric Staffing ModelGeocentric Staffing Model  Puts parent-country nationals, host-country nationals, and third-country nationals in the same category.  Attempts always to hire the best person available for a position.

© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3–10 Understanding the Cultural Environment CultureCulture  The set of values, symbols, beliefs, and languages that guide behavior of the people within that culture. Importance of Cultural AwarenessImportance of Cultural Awareness  International business managers:  Must be aware of cultural nuances.  Must be cognizant of the role of cultural differences and similarities in workers from different cultures.

© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3–11 Hofstede’s Dimensions of Culture Power Distance Masculinity versus Femininity Uncertainty Avoidance Time Orientation Individualism versus Collectivism

© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3–12 Political and Legal Issues of International Business Government stability Government stability Trade controls Trade incentives Economic communities Economic communities Political and legal issues Political and legal issues

General Human Resource Issues in International Business © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3–13 Avoiding discrimination in employment Choosing an appropriate source of employees Training and development of employees Working conditions, compensation, and the cost of living Working conditions, compensation, and the cost of living General HR issues in international business

© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3–14 Fundamental Management Challenges in International Business

© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3–15 Exporting Licensing Direct Investment Joint Venture Strategic Alliance Specific HR Issues in International Business

© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3–16 Threat of Opportunism and Asymmetry of Information as a Function of International Corporate Strategy

© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3–17 Beyond the Book: Recruiting and Selecting Key Elements Defining the skills and abilities that are needed to work in a foreign nation Recruitment of employees for international business is an important step in HRM Defining the skills and abilities necessary to perform

© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3–18 Domestic Issues in International Human Resource Management

© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3–19 International Transfers and Assignments of Expatriates Pre-Posting Training Compensation and Evaluation Personnel Selection Important Considerations in the Use of Expatriates

© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3–20 Selecting Expatriates for International Assignments Host-Country Personnel Third-Country Personnel Parent-Country Personnel Sources for Expatriates

© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3–21 Local (Host Country) Issues Local Training and DevelopmentLocal Training and Development  Extent of local workforce training and development necessary for nationals to perform effectively Local Compensation IssuesLocal Compensation Issues  Assessing individuals  Assessing groups  Necessity for hardship premium for expatriates

© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3–22 Expatriate Compensation Balance Sheet

© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3–23  The final step in HRM in global business: Bringing an expatriate home is not a simple matter. Bringing an expatriate home is not a simple matter. Extensive adjustment by expatriates is often required upon their return at the end of lengthy assignments. Extensive adjustment by expatriates is often required upon their return at the end of lengthy assignments. Beyond the Book: Repatriation of Expatriates

© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3–24 International Labor Relations Labor RelationsLabor Relations  Is the process of dealing with employees who are organized into labor unions.  Are heavily regulated and restricted by law.  Are affected by management actions toward labor and labor actions toward management.  Are impacted by local cultural, social, political, and economic issues.