Bauer, Human Resource Management
SAGE Publishing, 2020
Lecture Notes
Chapter 16: Opportunities and Challenges in International HRM
Learning Objectives
16.2 Examine the considerations an organization should make when expanding their business
practices across borders such as cultural differences, unionization rates, and legal context.
Chapter Summary
This chapter discussed the benefits and challenges organizations face when operating in a multinational
organization. The key is to develop a comprehensive HR strategy which addresses when and where
global programs and processes will be applied versus when and where local practices and programs will
Annotated Chapter Outline
I. Introduction
A. HR is increasingly required to expand recruitment practices outside of their U.S. talent
pool for talent to meet an organization’s multinational needs.
II. Global Transfer of HR Practices
A. Organizations can be international, multinational, or transnational companies.
Offshoring is an important trend resulting in lower operational costs.
i. Global organizations require the appropriate balance between global integration
and local differentiation to assure effectiveness and efficiency.
Bauer, Human Resource Management
SAGE Publishing, 2020
III. Important Considerations When Transferring HR Practices Across Borders
A. Legal Context
i. Examples include terminations, maximum hour work weeks, and definition of an
employee
B. Unionization Rates
i. Rates in many countries are higher than the United States and have a direct
impact on conducting business.
C. Cultural Differences
i. Values, see Table 16.1
ii. HR practices, while effective in one country, may be a barrier in another
because of cultural differences.
D. Causes and Forms of Internationalization
i. Companies internationalize for various reasons.
E. Spotlight on Ethics: Managing Ethics Globally in Multinationals
i. Managing multinational business ethics across the global, especially in countries
with more lenient anticorruption laws can be challenging.
a. Reinforce a strong commitment to ethics, holding those accountable
who do not exhibit this commitment.
b. Eliminate pressures in which employees feel they need to work around.
Bauer, Human Resource Management
SAGE Publishing, 2020
IV. Managing HR Globally
A. HR practices should leverage operating in multiple geographies.
B. HR must understand the cultural, legal, and economic differences and apply programs
ii. Sharing and implementing best company practices
C. Recruitment and Selection
i. Develop high-performance work systems strategy to determine ideal mix of
cultures in each company location, including associated costs of this diversity
approach.
D. Motivating, Rewarding, and Managing Employees
i. Reward systems and benefits are often differentiated around the world to
E. Employee Separations
i. In many countries, management must work with labor representatives to set
up procedures for terminating employees and follow national legal
requirements.
F. The Legal Side of Working Internationally
i. Employees working overseas often need a work permit or visa.
G. Handling of Personal Data
i. Compliance with country laws regarding collecting, storing, and using employee
(and applicant) data is critical to protecting confidential information and avoids
huge fines.
V. Management of Expatriates
A. An expatriate is a person who is living and working in a different country than their
Bauer, Human Resource Management
SAGE Publishing, 2020
D. Ex-pat assignments can costly and risky if not well selected and executed. Consider the
following:
i. Employee and spousal interactions require an interactional adjustment.
ii. Language barriers
viii. Developmental tools can assist with the transition
E. Preparing Expatriates for Their Assignments
i. Selecting expatriates based on personality, social skills, and global mindset
ii. Cultural training with families
iii. Relocation assistance including international schools, medical care, housing
vi. Repatriation
a. Retention rate of expatriates is 62% after one year.
b. Old job is filled by someone else.
c. Reverse cultural shock
d. Must be approached in a systematic way considering all the changes
which have taken place
VI. Alternatives to Long-Term Relocation Assignments
A. Short-term assignments and business travel