Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-1 Managing Human Resources Managing Human Resources Bohlander  Snell  Sherman Chapter 16 International Human Resources Management Chapter 16 International Human Resources Management

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-2 Learning Objectives  Identify the types of organizational forms used for competing internationally.  Explain how domestic and international HRM differ.  Discuss the staffing process for individuals working internationally.  Identify the unique training needs for international assignees.

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-3 Learning Objectives, cont.  Reconcile the difficulties of home-country and host-country performance appraisals.  Identify the characteristics of a good international compensation plan.  Explain the major differences between U.S. and European labor relations.

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-4 Presentation Slide 16-1 Increasing Importance of Global Human Resource Understanding 16-1 International Mergers and Acquisitions Importance of Global Human Resources Management Foreign Human Resources Global Competition Market Access Opportunities SOURCE: Jagdish N. Sheth and Abdolreza S. Eshghi, Global Human Resources Perspectives (Cincinnati: South-Western, 1989), vii.

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-5 Presentation Slide 16-2 Types of Organizations 16-2 GLOBAL Views the world as a single market; operations are controlled centrally from the corporate office. TRANSNATIONAL Specialized facilities permit local responsiveness; complex coordination mechanisms provide global integration. High GLOBAL EFFICIENCY INTERNATIONAL Uses existing capabilioties to expand into foreign markets. Low MULTINATIONAL Several subsidiaries operating as stand-alone business units in multiple countries LowHigh Source: Adapted from Peter J. Dowling, Denice E. Welch, and Randall S. Schuler, International Dimensions of Human Resource Management, 3e (South-Western, 1999). LOCAL RESPONSIVENESS

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-6 International Corporation Domestic firm that uses its existing capabilities to move into overseas markets

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-7 Multinational Corporation (MNC) Firm with independent business units operating in multiple countries

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-8 Global Corporation Firm that has integrated worldwide operations through a centralized home office

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning 16-9 Transnational Corporation Firm that attempts to balance local responsiveness and global scale via a network of specialized operating units

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning The Top 50 Global Firms COMPANY SALES (1998) 1. General MotorsU.S.161, DaimlerChryslerGermany154, Ford MotorU.S.144, Wal-Mart StoresU.S.139, MitsuiJapan109, ItochuJapan108, MitsubishiJapan107, ExxonU.S.100, General ElectricU.S.100, Toyota MotorJapan 99, Royal Dutch/ShellU.K./Neth. 93, MarubeniJapan 93, SumitomoJapan 89, IBMU.S. 81, AxaFrance 78, CitigroupU.S. 76, VolkswagenGermany 76, Nipon T&TJapan 76, BP AmocoU.K. 68, Nissho IwaiJapan 67, Nippon Life InsuranceJapan 66, SiemensGermany 66, AllianzGermany 64, HitachiJapan 62, U.S.Postal ServiceU.S. 60,072 COMPANY SALES (1998) 26. MatsushitaJapan59, Philip MorrisU.S.57, Ing GroupNetherlands56, BoeingU.S.56, AT&TU.S.53, SonyJapan53, MetroGermany52, Nissan MotorJapan51, FiatItaly50, Bank of AmericaU.S.50, NestleSwitzerland49, Credit SuisseSwitzerland49, Honda MotorJapan48, Assicurazioni GeneraliItaly48, MobilU.S.47, Hewlett-PackardU.S.47, Deutsche BankGermany45, UnileverU.K./Neth.44, State Farm InsuranceU.S.44, Dai-Ichi InsuranceJapan44, Veba GroupGermany43, HSBC HoldingsU.K.43, ToshibaJapan41, RenaultFrance41, Sears RoebuckU.S.41,332

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning HRM Issues of a Unified Europe Compensation and Benefits Training and Development ProductivityStaffing Labor Relations

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning Cultural Environment Language, religion, values, attitudes, education, social organization, technology, politics, and laws of a country

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning Host Country Country in which an international corporation operates

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning Presentation Slide 16-3 Cultural Environment of International Business

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning Presentation Slide 16-4 Advantages of Different Sources for Overseas Managers

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning Expatriates, or Home-Country Nationals Employees from the home country who are sent on international assignment

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning Host-Country Nationals Natives of the host country

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning Third-Country Nationals Natives of a country other than the home country or the host country

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning Time Emphasis in Staffing Expatriates Host Country Nationals Host Country Nationals Changes in International Staffing Over Time

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning International Staffing RecruitmentSelection Training and Development Key Issues

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning Guest Workers Foreign workers invited in to perform needed labor

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning Work Permit, or Work Certificate Government document granting a foreign individual the right to seek employment

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning Technical competence Professional experience Interpersonal skills International experience Family flexibility Country experience Language skills Expatriate Selection Criteria

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning Core Skills Skills considered critical in an employee’s success abroad

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning Augmented Skills Skills helpful in facilitating the efforts of expatriate managers

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning Augmented Skills Experience Decision-making Resourcefulness Adaptability Cultural sensitivity Team building Maturity Augmented Skills Experience Decision-making Resourcefulness Adaptability Cultural sensitivity Team building Maturity Core Skills Experience Decision-making Resourcefulness Adaptability Cultural sensitivity Team building Maturity Core Skills Experience Decision-making Resourcefulness Adaptability Cultural sensitivity Team building Maturity Skills of Expatriate Managers

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning Failure Rate Percentage of expatriates who do not perform satisfactorily

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning Why Do Expatriates Fail? Family adjustment Lifestyle issues Work adjustment Bad selection Poor performance Other opportunities arise Business reasons Repatriation issues

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning Transnational Teams Teams composed of members of multiple nationalities working on projects that span multiple countries

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning Global Managers Manage Decentralized Operations Aware of Global Issues Interpersonal Competence Sensitive to Diversity Issues Seize Strategic Opportunities Skilled in Building Communities

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning Global Manager Manager equipped to run a global business

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning Content of Training Programs Language Training Cultural Training Personal and Family Life Career Development and Mentoring Key Elements Needed to Prepare Employees to Work Overseas

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning Repatriation Process of employee transition home from an international assignment

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning Culture Shock Perceptual stress experienced by people who settle overseas

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning International Performance Appraisals Host-Country Evaluations Augmenting Job Duties Organizational Learning Individual Learning Home-Country Evaluations Providing Feedback Key Issues

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning Presentation Slide 16-5 Performance Evaluation Home-Country Evaluation Host-Country Evaluation GLOBAL PERSPECTIVE LOCAL PERSPECTIVE

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning Presentation Slide 16-6 Effective Compensation of Expatriate Managers The compensation program must: u Provide an incentive to leave the U.S. u Maintain a U.S. standard of living. u Facilitate reentry into the U.S. u Provide for the education of children. u Maintain relationships with family, friends, and business associates.

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning Balance-Sheet Approach Compensation system designed to match the purchasing power of a person’s home country

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning Country $/Hour Germany28.28 Belgium22.82 Japan19.37 Sweden18.81 U.S France17.97 Italy16.74 Canada16.55 Australia16.00 Britain15.47 Spain12.16 Israel12.05 Korea 7.22 Taiwan 5.89 Hong Kong 5.42 Mexico 1.75 Source: Department of Labor (Hourly compensation costs in U.S. dollars for production workers in manufacturing). Presentation Slide 16-7 Hourly Wages in Different Countries

Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning Codetermination Representation of labor on the board of directors of a company