HR Management.

1. IAF 605 - International Business Management
Human Resource Management
Week 13

2. Agenda
review Chapter 15
Tel-Comm-Tek (TCT) Case
Chapter 20 – HR
Management

3. TCT – Case Questions
Which candidate should the committee
nominate for the assignment? Why?
What challenges might each candidate
encounter in the position?
How might TCT go about minimizing
the challenges facing each candidate?

4. TCT – Case Questions
Should TCT offer all candidates the same compensation package?
If not, what factors should influence the features of each package?
Returning to material covered in Chapter 15, specifically that
dealing with the idea of a matrix organization, do you see any
benefit to appointing two of the individuals described here to the
post? Operationally, one individual would be in charge of internal
affairs, and the other would manage external affairs. What might
be the benefits and problems with this arrangement?

5. Chapter Objectives
To discuss the To profile the
importance of staffing
human resource frameworks
management used by MNEs
To examine how
To explain the MNEs select,
types and prepare,
competencies compensate,
of expatriates and retain
expatriates

6. Human Resource Management (HRM) - activities necessary to staff
the organization…more difficult for the international company than
it’s domestic counterpart due to:
environmental differences and
organizational challenges due
to leadership styles and
management practices.

7. Definitions
Expatriate - an employee
who leaves her or his native
country to live and work in
another.
Third-country national - an
employee who is a citizen
of neither the home
nor the host country.
Source: zimbio.com

8. The strategic function of international HRM – creates superior value
MNE whose HRM policies support its
chosen strategy creates superior value
but many MNEs struggle to develop
effective HRM policies

9. The Perspective of Expatriates
Trends in Expatriate
Assignment – demand in
developing countries; short-
term more common
The Young, The Old, and
The Impact of Market The Restless – more
Disruption – trying to females; more developing
reduce expenses / less to richer countries vs
“permanent assignments” sending expats to a host
nation

10. Three perspectives describe how companies set about staffing their
international operations:
• fills management
ethnocentric positions with home-
country nationals
• uses host-country
polycentric nationals to manage
local subsidiaries
• seeks the best people
for key jobs throughout
geocentric
the organization,
approaches
regardless of their
nationality

11. Discussion and Debate
ethnocentric polycentric geocentric

12. Managing Expatriates
Selecting Expatriates
Expatriate Failure
Preparing Expatriates
Compensating Expatriates
Repatriating Expatriates

13. Selecting Expatriates – objective measures are
rough estimators!
technical competence
• often the strongest
determinant of who is selected
for an international assignment
adaptiveness
leadership ability
• self-maintenance &
• top managers in personal resourcefulness
subsidiaries usually
• developing satisfactory
assume a greater range
relationships
of leadership roles and
broader duties • sensitivity to host
environment

14. Expatriate Failure
operationally costly and
professionally detrimental
a leading cause of
expatriate failure is the
inability of a spouse to
adapt to the host country
(NOT their technical skills)
see more short-term
assignments, “commuter”
assignments and young or
old expats
Image source: http://www.flickr.com/photos/carbonnyc/

15. Preparing Expatriates
Focusing on Adaptiveness and
Related Characteristics
General Country Understanding
Cultural Sensitivity
Practical Skills – schooling,
socializing and shopping
culture
shock

16. Compensating Expatriates
The Pay-Performance
Link
Types of Compensation
Plans –
• Home Based
• Headquarter Based
• Host Based Methods

17. In designing compensation packages for expatriates, HRM
considers the following topics
Base Salary
Foreign Service Premium
Allowances – COL; Housing;
Spouse; Hardship
Fringe Benefits
Tax Differentials
Image source: http://www.flickr.com/photos/symic/

18. Complications posed by National Differences – pay based on
standards in the host country or on a global basis? Legal, cultural
and regulatory factors.
• may pay
someone more
polycentric than necessary
and
ethnocentric to persuade
them to go
abroad
• manager
performs the
geocentric
same job but in
different
locations – paid
the same salary?

19. Repatriating Expatriates - act of returning home from a foreign
assignment
Repatriation stress: financial | work | social
The principal cause of repatriation
frustrations is finding the right job for
someone to return to!

20. International Labor Relations
Labor union -
association of workers
who have united to
represent their collective
views for wages, hours,
and working conditions.
Collective bargaining -
negotiations between
labor union
representatives and
employers to reach
agreement on a
work contract.
Source: http://www.flickr.com/photos/ellafunnt/

21. Labor claims it is disadvantaged in dealing with MNEs because:
It is hard to get full data
on MNEs’ global
operations.
MNEs can manipulate
investment incentives.
They can easily move
value activities to other
countries.
Ultimate decision making
occurs in another
country.

22. How Labor Responds To The MNE:
tries to strengthen its bargaining
power through
cross-national cooperation

23. Future: Which Countries Will Have the Jobs of the Future?
Worker populations will
grow faster in
developing countries.
Wealthier countries will
continue to grow in the
number of retirees
Adjustments for developed economies:
Nationalism | Men vs. Machines | Brains: Drains, Recycle, or Halt
Image sources: http://www.flickr.com/photos/aheram/; http://www.flickr.com/photos/ngoaengaf/