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Culture Approaches Expatriate Management Training, Appraising and Paying Expatriates Repatriation
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WHAT IS GHRM?
Global Human Resource management is the process of procuring, allocating and effectively utilizing human resources in a multinational corporation. What is Corporation? an International
Quantity
versus
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quality
of
life
ASSESSING CULTURE
India
Collectiv e
Larg e
Moderat e
Modera te
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Staffing policy:
Ethnocentric approach
Key management positions parent-country nationals Advantages: filled by
Overcomes lack of qualified managers in host nation Unified culture Helps transfer core competencies (and skills back)
Disadvantages:
Produces resentment in host country Can lead to cultural myopia
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Polycentric approach
Host-country nationals manage subsidiaries Parent company nationals hold key headquarter positions Best suited to multi-domestic businesses Advantages:
Alleviates cultural myopia. Inexpensive to implement Helps transfer core competencies
Disadvantages:
Limits opportunity to gain experience of hostcountry nationals outside their own country. Can create gap between home-and hostcountry operations
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Geocentric approach
Seek best nationality people, regardless of
not always possible
Disadvantages:
National
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policies
may
limit
Impatriates: expatriates who are citizens of a foreign country working in the home country of their multinational employer 4/27/12
Inability of spouse to adjust Managers inability to adjust Other family problems Managers personal or emotional 4/27/12 immaturity
Japanese Firms Inability to cope with larger overseas responsibilities Difficulties with the new environment Personal or emotional problems Lack of technical competence Inability of spouse to adjust. Indian firms Homesickness, home country hangover Adjustment problem in a new culture Difference in work habits, lifestyle and values Personal or emotional maturity Other family reasons
ORIENTATION
International positions require an extensive orientation to familiarize the employees with culture, language and other unique aspects of the assignment. The orientation programme can be divided simply into two levels:
Pre-arrival orientation
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Expatriate selection
Reduce expatriate failure rates by improving selection procedures An executives domestic performance does not (necessarily) equate his/her overseas performance potential Employees need to be selected not solely on technical expertise but also on cross-cultural fluency
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Others-Orientation
Ability to develop relationships with host-country nationals Willingness to communicate
Perceptual Ability
The ability to understand why people of other countries behave the way they do Being nonjudgmental and being flexible in management style
Cultural Toughness
Relationship between country of assignment and the expatriates adjustment to it
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On going management education Rotation of managers through a number of jobs within the firm to give broad range of experiences
Used as a strategic tool to build a strong unifying culture and informal management network Above techniques support transnational and global strategies 4/27/12
Compensation
Two issues:
Pay executives in different countries according to the standards in each country? or Equalize pay on a global basis? Method of payment
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Compensation issues
Type of Company Payment How much home-country expatriates should be paid. Pay can and should be country-specific. May have to pay its international cadre of managers the same.
Ethnocentric
Polycentric Geocentric/Transnational
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Expatriate pay
Typically use balance sheet approach Equalizes purchasing power to maintain same standard of living across countries Provides financial incentives to offset qualitative differences between assignment locations. Pay for Schools, health care, etc.
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Firm pays expatriates income tax in the host country Level of medical and pension benefits of identical overseas
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Balance
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Identification
possible
Equality
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Performance appraisal
Problems:
Unintentional bias Host-nation biased by cultural frame of reference Home-country biased by distance and lack of experience working abroad
Expatriate managers believe that headquarters unfairly evaluates and under appreciates them In a survey of personnel managers in U.S. multinationals, 56% stated foreign assignment 4/27/12 either detrimental or
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REPATRIATION
The final issue in managing international assignments is repatriation (i.e., helping employees make the transition back home of arriving employees) of arriving employees. Though people face difficulty in acclimatizing and developing adjustment with the new culture of the new country, still they do not feel comfortable in quitting the job and going back to the home country by accepting the failures. The repatriation need not necessarily because of failure of a foreign assignment
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be
PHASES OF REPTRIATION
Prepar ation Physical relocati on Transiti on Readjust ment Repatria tion Process
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Repatriation of expatriates
Didnt know what position they hold upon return. Firm vague about return, role and career progression. Took lower level job. Leave firm within one year. Leave firm within three years
10
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20
30 40 percen t
50
60