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International HRM

International HRM. Why care about international HRM?. The success of many organizations depends upon their ability to internationalize their operations.

pamela-campbell
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International HRM

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  1. International HRM Prof. Lapierre

  2. Why care about international HRM? • The success of many organizations depends upon their ability to internationalize their operations. • Canada is no stranger to this need. Examples include Alcan, BCE, Cognos, Nortel, Bombardier, the Royal Bank, KPMG, Ernst & Young, and Abitibi-Consolidated. Prof. Lapierre

  3. Stages of Internationalization • Stage 1: Domestic Operations • Firms offer products or services that are designed to primarily serve consumers in the domestic market (e.g., law firms) • Stage 2: Export Operations • Products and services are opened up to markets in other countries, but production facilities remain in Canada (e.g., McCain Foods). • HRM: Provides sales force with skills and motivation to succeed in these foreign markets. Prof. Lapierre

  4. Stages of Internationalization Stage 3: Subsidiaries or Joint Ventures • Some operational facilities (e.g., parts assembly) are physically moved to other countries. • Corporate headquarters in home country has high control over foreign operations. • HRM: Provides expatriates and local employees with knowledge and skills to succeed in the foreign country. Prof. Lapierre

  5. Stages of Internationalization Stage 4: Multinational Operations • Much more prevalent international dispersion of production and service provision facilities. • Decentralization of decision-making more prevalent, but “major” personnel decisions still made within home country. • Expatriates still primarily manage foreign facilities. Prof. Lapierre

  6. Stages of Internationalization Stage 5: Transnational Operations • Little allegiance to the firm’s country of origin. • Large-scale decentralization of decision-making. • Dominant role of expatriates is removed. • Each business unit across the globe has the freedom to make and implement its own HRM policies and practices. Prof. Lapierre

  7. Use of Expatriates • At Stage 3, the firm must decide what presence expatriates will have in managing the foreign facilities. • Three approaches can be taken: • Ethnocentric (all expatriates) • Polycentric (all local country citizens) • Geocentric (citizenship is ignored in favour of “best person for the job”); typical of transnational firms. Prof. Lapierre

  8. Use of Expatriates Use of expatriates increases when: • Poor or insufficient local talent • There is a need to ensure a strong corporate-wide vision (and culture). • When domestic and foreign operations are highly interdependent. • The political situation in the foreign country is unstable • There are significant culture differences. • Bottom line: When the home country does not TRUST the abilities and/or intentions of local labour force. Prof. Lapierre

  9. Use of Expatriates Why do International Assignments Fail? • Career blockage (“the home office has forgotten about me”) • Culture Shock, resulting in frustration and poor cooperation abroad. • Family problems, due to poor adjustment and/or lack of contact if family is left behind. Prof. Lapierre

  10. Use of Expatriates Why do International Assignments Fail? (con’t) • Over-emphasis on technical qualifications. • Getting rid of a problem employee. Prof. Lapierre

  11. Use of Expatriates Difficulties upon Return Home 20-40% of repatriatesquit after returning home. Why? • Lack of respect for acquired skills/knowledge (especially firms at Stage 3) • Loss of status • Poor planning for return position • Reverse culture shock Prof. Lapierre

  12. Use of ExpatriatesThe Role of HRM Selection • Provide realistic country preview. • Measure ability to be sensitive to different cultures and/or comfort with specific foreign country’s culture. • Have successful expatriates make the selection decisions. • Require previous international experience (pay attention to specific country worked in). • Assess family’s willingness to live or work abroad. Prof. Lapierre

  13. Use of ExpatriatesThe Role of HRM Training Cross-cultural training, which can address: • Major cultural differences • Foreign expectations regarding polite behaviour • Foreign expectations regarding business behaviour • How to avoid feeling insulted when no insult is made • Video and role-play approaches to training delivery are critical for cross-cultural training. Prof. Lapierre

  14. Use of ExpatriatesThe Role of HRM Career Development Ensure expatriates know that an international assignment helps in terms of advancement within the firm Compensation • Disposable income abroad should be the same (if not more) than what is given at home. • Provide incentive to work abroad (bonus, pay increase). • Ensure pay equity within foreign facilities. Prof. Lapierre

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