1-1 Chapter 15 Managing Human Resources Globally Human Resource Management Gaining a Competitive Advantage McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, All Rights Reserved.

15-2 Hofstede’s Cultural Dimensions Individualism/collectivism - the degree to which people act as individuals rather than as members of a group. Power distance - how a culture deals with hierarchical power relationships. Uncertainty avoidance - how cultures deal with the fact that the future is not perfectly predictable. Masculinity-femininity describes the division of roles between the sexes within a society. Long-term/short-term orientation - the tendency of a culture to focus on long-term benefit or short-term outcomes.

15-3 Implications of Culture for HRM Cultures differ on such things as leadership, decision-making, and motivation. Cultures influence the appropriateness of HRM practices. Cultures may influence compensation systems. Cultural differences can affect the communication and coordination processes in organizations.

15-4 Education/Human Capital Countries differ in their levels of human capital. A country's human capital is determined by a number of variables, primarily, educational opportunity. Countries with low human capital attract facilities that require low skills and low- wage levels. Countries with high human capital are attractive sites for direct foreign investment that creates high-skill jobs.

15-5 Selection of Expatriate Managers Successful expatriates have the following skills or abilities: –Technical competence –Ability to adjust to, and be sensitive to, a new culture. –Use of women in expatriate assignments has proven beneficial for companies; recent evidence disproves the notion that women are not successful managers in foreign countries.

15-6 Compensation of Expatriates Total pay packages have four components: –Base Salary—Annual salary, unadjusted. –Tax Equalization allowances— Payments for higher tax rates of other countries. –Benefits—Continuation of, or substitute for, home benefits. –Allowances—Cost-of-living, housing, education, and relocation payments.

15-7 Pay Comparisons USI MBA candidates, Engineering undergrad, MNGT 652, Fall 2000 –Crystalline Maintenance Manager, GE Plastics, Lexan Chemical Operations, Mt. Vernon (10 yrs exp, B.S. U of Idaho) –Sourcing Leader, GE Plastics, Mt. Vernon (8 yrs exp, B.S. National University of Colombia, M.S. U of Oklahoma) –Staff Engineer, City of Evansville (7 yrs exp, B.S. U of Illinois) –Engineering Mngr, Ruvan, Evansville (11 yrs exp, B.S. U of Cincinnati) –Lead Process Engineer, Towel Mfg, Kimberly-Clark, Owensboro (3 yrs exp, B.S. Purdue) –Environmental Chemist, Alcan Ingot, Sebree, KY (27 yrs exp, B.S. Universidad Pontifica Bolivariana [Colombia] –Staff Electrical Engineer, Biagi, Chance, Cummins, London, Titzer, Inc., Evansville (2 yrs exp, B.S. USI) –Plant Mechanical Engineer, SIGECO, Newburgh (9 yrs exp, B.S. UE) –Industrial/Process Engineer, DSM Engineering Plastics, Evansville (14 yrs exp, B.S. Ball State) –Engineering Manager, ARC Machine, Evansville (15 yrs exp, B.S. UE)

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15-10 Reacculturation of Expatriates Reentry to the home organization may result in culture shock. –According to some sources, 60 to 70 percent of expatriates do not know what their position will be upon their return. Transition process necessitates communication of corporate changes while the expatriate is overseas and validation of the importance of the expatriate's international work.