978-0134739724 Chapter 14

CHAPTER 14

GLOBAL HUMAN RESOURCE MANAGEMENT

CHAPTER OBJECTIVES

14.1 Discuss the evolution of global business and the context for global human

resource management

14.2 Summarize global staffing practices

14.3 Describe global performance management and human resource development

practices

14.4 Discuss global compensation practices

14.5 Explain global safety, health, and employee and labor relations

14.6 Discuss globalization issues for small to medium-sized businesses

KEY TERMS

Exporting: Selling abroad, either directly or indirectly, by retaining foreign agents and

distributors.

Licensing: Arrangement whereby an organization grants a foreign firm the right to use

212

LECTURE OUTLINE

EVOLUTION AND CONTEXT OF GLOBAL BUSINESS AND HUMAN

RESOURCE MANAGEMENT

The world is becoming a multinational community in which the interdependencies

between countries and between organizations are increasing dramatically.

EVOLUTION OF GLOBAL BUSINESS

The world is becoming more of a multinational community in which the

interdependencies between countries and between organizations are increasing

dramatically. Today, globalization is not limited only to large organizations. It is now

important for both large and small firms. Going global can provide a company with an

assortment of rewards

CONTEXT OF GLOBAL BUSINESS

Global HR practices require an appreciation of the variation between countries on

several factors. Individuals dealing with global HR matters face a multitude of

challenges beyond that of their domestic counterparts. These considerations range from

213

cultural to political barriers to demographic considerations in the workforce and

international aspects such as compensation.

● NATIONAL CULTURAL NORMS—Cultural values are the norms for

behaviors and beliefs. Cultural differences create challenges for managing HR.

We often rely on six categories to describe national culture. These include power

distance, individualism/collectivism, masculine/feminine, uncertainty avoidance,

pragmatism/normative, and indulgence/restraint.

GLOBAL STAFFING

Utilization of global human resources to achieve organizational objectives without

regard to geographic boundaries.

● EXPATRIATE—Employee who is not a citizen of the country in which a firm’s

operations are located, but is a citizen of the country in which the organization is

headquartered.

● APPROACHES TO GLOBAL STAFFING

● Ethnocentric staffing: Staffing approach in which companies primarily hire

expatriates to staff higher-level foreign positions.

● Polycentric staffing: Staffing approach in which host-country nationals are

used throughout the organization, from top to bottom.

214

● Regiocentric staffing: Staffing approach that is similar to the polycentric

staffing approach, but regional groups of subsidiaries reflecting the

organization’s strategy and structure work as a unit.

● Geocentric staffing: Staffing approach that uses a worldwide integrated

business strategy.

● RECRUITING HOST-COUNTRY NATIONALS—One of the biggest

mistakes that a recruiter can make in the multinational arena is to assume that the

recruiting approaches that worked in the parent company will also be effective in

recruiting host-country nationals.

GLOBAL PERFORMANCE MANAGEMENT AND HUMAN RESOURCE

DEVELOPMENT

Global training and development is needed because people, jobs, and organizations are

often quite different globally.

● PERFORMANCE MANAGEMENT—Two major influences on the

effectiveness of performance appraisal practices are information asymmetry and

cultural values. Information asymmetry refers to a difference in the quality and

amount of information available to two or more individuals or groups. Cultural

norms influence the adoption of performance appraisal practices as well as an

employee’s reaction to appraisals.

215

● CONTINUAL DEVELOPMENT: ONLINE ASSISTANCE AND

TRAINING—Companies are now offering Internet service in the areas of career

services, cross-cultural training, and employee assistance programs.

● REPATRIATION ORIENTATION AND TRAINING—Orientation and

training are also necessary prior to repatriation, which is the process of bringing

expatriates home.

GLOBAL COMPENSATION

Probably the main reason that organizations relocate to other areas of the world is

because of high wage pressures that threaten their ability to compete on a global basis.

GLOBAL SAFETY, HEALTH, AND EMPLOYEE AND LABOR RELATIONS

As with the other HR functions, differences in safety, health, and employee and labor

relations create challenges for HR professionals.

● SAFETY AND HEALTH—These aspects of the job are important because

employees who work in a safe environment and enjoy good health are more

likely to be productive and yield long-term benefits to the organization. Global

companies continue to face global safety risks. Health and safety professionals

with international experience say one of the most important trends sweeping

through successful multinational companies is the shift to a single safety

management system that applies to all their operations throughout the world.

GLOBALIZATION FOR SMALL TO MEDIUM SIZED BUSINESSES

14-1. How has global business evolved?

14-2. Define the following terms:

a. exporting

b. licensing

217

b. Licensing: Arrangement whereby an organization grants a foreign firm the right

to use intellectual properties such as patents, copyrights, manufacturing

processes, or trade names for a specific period of time.

c. Franchising: Option whereby the parent company grants another firm the right

to do business in a prescribed manner.

d. Multinational corporation: Firm that is based in one country (the parent or

home country) and produces goods or provides services in one or more foreign

countries (host countries).

e. Global corporation: Organization that has corporate units in a number of

countries that are integrated to operate as one organization worldwide.

14-3. What are some global issues confronting women?

14-4. What are the various types of global staff members?

14-5. What is the general process for selecting expatriates?

14-6. Why is pre-move orientation and training of expatriates so important?

14-7. Why is repatriation orientation and training needed?

14-8. What is the importance of e-learning in the global environment?

14-9. What difficulties do virtual teams have in the global environment?

14-10. What is meant by the statement regarding compensation for host-country

nationals, “Organizations should think globally but act locally?”

14-11. What has been the status of expatriate compensation in recent years?

14-12. What are factors to consider in global health and safety?

14-13. What are factors to consider in global employee and labor relations?

219

representatives on their boards of directors, is common in European countries. Even

though they face global competition, unions in several European countries have resisted

changing their laws and removing government protections.

14-14. What are some problems and opportunities related to small and medium-sized

businesses in the global environment?

Discussion Question in MyManagementLab. Student responses will vary.

DISCUSSION OF CHAPTER 14 INCIDENTS

HRM Incident 1: My Darling

Matilda enthusiastically accepted this assignment and moved to her new location last

month. Her first goal is to fill supervisory job vacancies. James Greenwood was the first

candidate. Matilda greeted James enthusiastically, “Welcome, James!” Then, she

extended her hand to shake his. James did not do the same. Instead, he moved closer to

Matilda and gave her a hug and a light peck on the cheek. Then, James responded to

Matilda’s verbal greeting, “It’s so good to finally meet you, my darling.”

Later that day, Matilda contacted Ashley Lamare, McGill’s director of human resources,

to discuss her experience. A long pause followed after Matilda relayed her story. Then,

Ashley asked, “Matilda, did James do anything inappropriate?”

Surprised by Ashley’s response, Matilda said, “Yes, Ashley. He called me “my darling,”

and then asked about my family.” She added, “He hugged me, too!”

220

friends or others in the workplace, regardless of gender. Also, a gentle hug is a

customary greeting in the workplace, much like the handshake.

“How was I supposed to know that?” Matilda responded defensively.

14-22. Do you believe that Matilda overreacted to James? Why or why not?

14-23. Should Ashley have taken responsibility to educate Matilda before she left on

assignment? Or, was it Matilda’s responsibility to educate herself? Explain.

14-24. Now educated about the location’s cultural norms, Matilda decides to call

James. What should she say to him? Explain.

Matilda might explain to James that she was unfamiliar with the local customs and

reacted without fully understanding his intent. She might invite James to meet again and

interview for the position, and Matilda may also be a bit more open minded when

working with the host-nationals.

HRM Incident 2: Was There Enough Preparation?

“Hi, Sam. How are the preparations going for your assignment in Japan?”

“Well, Elvis, I really feel prepared for the assignment, and the high level of

apprehension I first experienced is gone.”

“What exactly did the preparation program involve, Sam?”

“The experience was really exhaustive. First, I spent a good deal of time in a

comprehensive orientation and training program. The program covered training and

familiarization in the language, culture, history, living conditions, and local customs of

Japan. Then, to make the transition back to home easier and better for my career, I have

developed a plan with my boss that includes several trips back here to remain a key part

of this operation. Also, my career development training will include the same training as

the other managers in the home office. Finally, I was completely briefed on repatriation

orientation and training that I would experience when I returned. Also, I was fully

briefed on the compensation package, which appears to be fairly generous.”

QUESTIONS

14-25. Do you believe that Sam’s family is adequately prepared for the move to Japan?

Why or why not?

222

14-26. Should the company’s orientation program have included training for Sam’s

family? Discuss.

14-27. Is repatriation orientation and training necessary for Sam’s family on their

return to the United States?