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Chapter 13: Managing Human Resources Globally
Chapter 13
Managing Human Resources Globally
Learning Objectives
After studying this chapter, students will be able to accomplish the following objectives:
1. Explain staffing decisions, with a focus on expatriates.
2. Identify training and development needs for expatriates and host-country nationals.
3. Identify and discuss compensation and performance appraisal issues.
4. List factors that affect labor relations in both home and host countries.
5. Discuss how the institution-based and resource-based views shed additional light
on human resource management.
6. Identify the five Cs of human resource management.
Chapter Overview
Chapter 13, Managing Human Resources Globally, is devoted to the activities that attract,
select, and manage employees—otherwise known as human resource management, or
HRM. This chapter begins by introducing the two types of employees found in MNEs—
host-country nationals, or HCNs, and expatriates. When making important staffing
decisions, there are three primary approaches: ethnocentric, polycentric, and geocentric.
After defining these concepts, the chapter goes on to discuss the role of expatriates, how
they are selected, and why their risk of failure is so high. Training and development can
help mitigate this risk among both expatriates and repatriates. The chapter then turns to
compensation, comprised of salary and benefits, and performance appraisal, the
evaluation of employee performance for the purpose of promotion, retention, or ending
employment. Properly compensating, motivating, and evaluating expatriates is a leading
issue in HRM. Finally, the chapter explores the issue of labor relations on a global level
and analyzes HRM from the perspective of the institution-based and resource-based
views.
Opening Case Discussion Guide
IKEA Manages Human Resources in the United States
Active in 48 countries with approximately 400 stores, IKEA is the world’s largest
furniture retailer. In 1985, IKEA came to the United States. Currently operating 44 stores
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Chapter 13: Managing Human Resources Globally
with 14,000 employees, U.S. operations contribute $5 billion of IKEA’s global sales ($36
billion), ahead of its home country sales in Sweden.
While keeping prices low has always been a hallmark of IKEA’s strategy, directly
supporting it is its efforts in human resource management (HRM). Its HRM centers on
radically reducing staff turnover and creating a stable and nurturing working environment
in an industry notorious for high turnover. Toward that end, IKEA U.S. offers generous
wages and benefits compared with its rivals. The IKEA culture also discourages
workaholics. Instead, work-life balance is a big deal.
At IKEA, egalitarianism runs deep. Similar to the parent company, IKEA U.S. is not very
hierarchical. All in-store employees are called “shopkeepers.” Inclusion and diversity are
also part of IKEA’s DNA. Not only are half of its U.S. employees women, more than half
of its senior managers and executives are women too. Some IKEA commercials feature
gay couples. In 2016, IKEA U.S. is one of the only four proud non-U.S.-owned firms that
join the ranks of Fortune 100 Best Companies to Work for.
Lesson Plan for Lecture
Brief Outline and Suggested PowerPoint Slides
Learning Objectives PowerPoint Slides
Learning Objectives Overview 2–3: Learning Objectives
LO1
Explain staffing decisions, with a focus on
expatriates.
4: Human Resource Management (HRM)
5–6: Staffing
7: Exhibit 13.1 – Parent-Country, Third-
Country, and Host-Country Nationals
8: Approaches in Staffing
9: Exhibit 13.2 – Multinational Strategies
and Staffing Approaches
10: Role of Expatriates
11: Exhibit 13.3 – The Role of
Expatriates
12: Expatriate Failure
13: Exhibit 13.4 – Factors in Expatriate
Selection
LO2
Identify training and development needs
14: Training and Development
15: Training for Expatriates
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Chapter 13: Managing Human Resources Globally
for expatriates and host-country nationals. 16: Repatriate
17: Training and Development for Host-
Country Nationals (HCNs)
LO3
Identify and discuss compensation and
performance appraisal issues.
18: Compensation and Performance
Appraisal
19: Compensation for Expatriates
20: Exhibit 13.5: Going Rate versus
Balance Sheet Approaches to Expatriate
Compensation
21: Compensation for HCNs
22–23: Performance Appraisal
LO4
List factors that affect labor relations in
both home and host countries.
24–25: Labor Relations
LO5
Discuss how the institution-based and
resource-based views shed additional light
on human resource management.
26: Exhibit 13.7: Institutions, Resources,
and Human Resources Management
27: Institutions and Human Resource
Management
28: Resources and Human Resource
Management
LO6
Identify the five Cs of human resource
management.
29: Exhibit 13.9: Implications for Action
Key Terms 30–31: Key Terms
Summary 32–33: Summary