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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
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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
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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.
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● 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.
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● 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
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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?
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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!”
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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?
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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?
