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INTERNATIONAL HR MANAGEMENT. GOING INTERNATIONAL. Exporting Licensing One firm leases the right to use its intellectual property to another firm in exchange for a fee Franchising An independent organization operates a business under the name of another in exchange for a fee
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GOING INTERNATIONAL • Exporting • Licensing • One firm leases the right to use its intellectual property to another firm in exchange for a fee • Franchising • An independent organization operates a business under the name of another in exchange for a fee • Foreign Direct Investment • Joint Ventures; strategic alliances • Sole ownership
International Business Strategies • Multilocal • Decentralized • Collection of independently operating organizations • Export Market • Parent company maintains centralized control • Global approach • Hybrid combination of multilocal and export
Domestic vs. International HR • Basic function and objective remains the same: procurement, allocation, and utilization of people. • Primary difference between IHR and domestic HR lies in the complexity of operating in different countries with different cultures and laws. • Degree of complexity depends on: • Extent of cultural diversity • Approach taken to multinational entry • Top management attitudes (parochialism)
International HR Strategies • Ethnocentric • Centralized HR • Managed by Parent Country Nationals (PCNs) • Pay based on local market for employees; home country for PCNs • Training aimed at KSAs to perform the job • Polycentric • Decentralized HR • Managed by Home Country Nationals (HCNs) • Pay based on local market • Training given added importance
International HR Strategies • Geocentric • Global workforce deployed throughout the world • Positions filled by most qualified regardless of nationality: HCNs, PCNs, or TCNs, • Compensation based on value-added • Training and development emphasized • Regiocentric
Why Do International Managers Fail? • Does it change the essence of HR? • Culture Shock • Cultural arrogance (Parochialism) • Cultural Insensitivity • The Key success factor? • Cultural adaptability
CULTURAL ENVIRONMENT • Language • Communication styles • Nonverbal • Direct vs. Indirect • Greeting: physical and verbal • Space • Structural & interpersonal • Time orientation • Punctuality • Monochronic vs. Polychronic • Religion • Respect/formality • Consensus seeking
HOFSTEDE’S DIMENSIONS • Individualism vs. Collectivism • Power Distance • Uncertainty Avoidance • Masculinity vs. femininity • Long-term orientation