Module 10: Overview

Discussion: Cross cultural aspects of

management Reading: Are you taking your expatriate talent seriously? Case Study: Colgate-Palmolive: Managing international careers

International Expansion
Strategies for expanding internationally Exporting locally produced goods to host country Subcontracting or licensing production of certain goods or services to foreign partner Entering into joint venture with foreign partner Setting up operations (making a direct investment) in form of foreign branch or subsidiary

The Management Challenges of International Business

Coordinating market, product, and production

plans on a worldwide basis

Creating organization structures capable of

balancing centralized home-office control with adequate local autonomy.

Extending its HR policies and systems to

service its staffing needs abroad:

The HR Challenges of International Business

Deployment

Easily getting the right skills to where we need them, regardless of geographic location.

Knowledge and innovation dissemination

Spreading state-of-the-art knowledge and practices throughout the organization regardless of where they originate.

Identifying and developing talent on a global basis

Identifying who can function effectively in a global organization and developing his or her abilities.

How International & Domestic HRM Differ

International HRM requires Managing broader range of functional areas Becoming more involved in employees personal lives Setting up several different HRM systems for different geographic locations Dealing with more complex external constituencies Participating in international assignments that have heightened exposure to personal risk

Assessing Culture: Hofstedes Cultural Differences Dimensions

Individualism or collectivism Individualistic societies value development of & focus on individual Collective societies value group relationships Power distance Extent to which society is hierarchical, & how power is distributed among its members Uncertainty avoidance Extent to which society feels comfortable with ambiguity & values & encourages risk-taking Quantity versus quality of life

Assessing Culture

Halls Model of Cultural Differences

Time Importance or sense of time in daily activities

Space (distance) Amount of physical distance individuals attempt to maintain between themselves & others
Material goods Emphasis or inferences on possession of goods to signify power, success & status Friendships Importance of friendships in conferring status Agreements Considers how agreements are reached

Strategic Issues

Four Approaches to IHRM

Make strategic decision as to level of

standardization desired across locations

Ethnocentric approach

Exporting organizations home country practices & policies to foreign locations Allowing each location to develop own practices & policies

Polycentric approach

Four Approaches to IHRM

Regiocentric approach

Developing standardized practices & policies by geographic region

Developing one set of global practices & policies applied at all locations

Geocentric approach

Setting Strategic HR Standards

Strategic HR Issues in Global Assignments

Strategic management of global

assignments

Establish specific purpose for assignment Select appropriate employee for assignment Organizational & individual purposes for assignment must be identified & matched

Strategic HR Issues in Global Assignments

Strategic management of global

assignments

Assess adaptability to host culture of both employee & any family members who will be accompanying employee Provide appropriate training for employee & family members Simultaneous training should be conducted for headquarters staff

Determining Expatriate Compensation

Balance sheet method Higher-of-home-orhost method Expatriate salary based on home Employees salary at country pay home adjusted upward to account for higher Additional expenses cost of living associated with Localization approach relocation & assignment Salary converted to host countrys Hardship & incentives equivalent when to determine overall employee is on reimbursement & permanent compensation level assignment

Repatriation

Summary of Best Practices

Summary of Best Practices