Lecture Notes
Lussier, Human Resource Management, Third Edition
16–2 Identify and discuss the five dimensions of Hofstede’s model of culture and how the
GLOBE Dimensions differ from Hofstede.
16–3 Briefly discuss the Big Five personality traits in relation to international assignments
16-4 Explain issues involved in negotiating the assignment and the potential effects of
culture shock on the expatriate employee.
Annotated Chapter Outline
I. Globalization of Business and HRM
a. Many businesses are affected by global suppliers, partners, or customers for their
products and services.
b. Four types of capital flow between countries
i. Natural capital—natural resources linked with human welfare.
ii. Social capital—social networks, like social trust, norms, and networks that create
social cohesion.
Lecture Notes
Lussier, Human Resource Management, Third Edition
SAGE Publishing, 2018
local store; ‘as a student’ in college; and ‘as a consumer’ you use and buy products from other
countries. Capital and goods flow easily between countries. Because of the ability to
communicate instantly, services can generally be performed in the location where they have the
II. Reasons for Business Globalization
a. Businesses must adapt and capitalize on technology that transcends distance and
culture. Must also allow goods, people, and ideas to cross borders around the world.
b. Free flow of ideas, information, and knowledge has reshaped ways in which people view
the world.
Another reason businesses have reached beyond their own borders is the rise of the “global
village,” with associated declining barriers to trade in goods, investment, travel, and
communication.
Declining trade barriers, GATT, and now the WTO. Another impetus for increasing globalization
over the past 50 years was the changing disposition toward the use of tariffs and other trade
barriers by country governments
III. Declining Trade Barriers
a. The World Economy
i. Becoming mutually beneficial and essential for economic vitality to expand global
trading partnerships.
ii. During last 50 years, technology has dissolved barriers to world trade.
IV. The Rise of Global Trading Relationships
Lecture Notes
Lussier, Human Resource Management, Third Edition
SAGE Publishing, 2018
V. Is HRM Different in Global Firms?
a. The more a business moves toward corporate globalization, the more complex its HRM
needs.
b. Employees need to alter perceptions of HRM from local focus to broader concept of
society as it relates to the following dimensions:
i. Staffing—home country, host country, or third-party employees require different
sourcing, training, and compensation.
VI. Examples of International Laws
a. China
i. Dispatch or “temporary” workers are limited to 10% of workforce.
ii. Many employers require non-compete agreements.
b. Brazil
i. No at-will employment, so labor relations are regulated by national laws.
ii. Overtime is required for more than eight hours per day or 44 hr a week.
c. Germany
i. Wages are often controlled through labor union negotiations.
ii. Age discrimination is condoned in cases where employee is fully vested.
VII. Are American Companies Bound by American Laws in Foreign Countries?
a. According to EEOC, employees working in U.S. or its territories are protected by EEO
laws.
VIII. Corruption and Bribery in Foreign Countries
a. Many foreign countries accept corruption and bribery as common business practices.
IX. International Ethics
a. Different cultures may have values and beliefs that result in various interpretations of
ethical standards.
Lecture Notes
Lussier, Human Resource Management, Third Edition
SAGE Publishing, 2018
b. If a U.S. company ascribes to a code of ethics, employees should ethically apply those
principles to any and all business situations.
X. National Culture
a. Parochialism
i. Narrow-minded world view with an inability to recognize individual differences.
b. People who have lived in only one culture may not realize there are alternative options
as it relates to values, beliefs, and culture.
XI. Hofstede’s Model of Culture
a. Geert Hofstede was an HR executive for IBM in the 1960s. As a trained psychologist, he
developed a model of culture that addresses five primary dimensions widely used today:
i. Power distance—low versus high
ii. Individualism versus collectivism
iii. Masculinity versus femininity
XII. Skills and Traits for Global Managers
a. International assignments require deeper analysis of how skills and traits can be adapted
to a worldwide environment.
XIII. Home, Host, or Third-Country Employees
a. Three traditional options for staffing international assignments:
Lecture Notes
Lussier, Human Resource Management, Third Edition
SAGE Publishing, 2018
1. Parent (home) country nationals—employees who work for organization in country
where organization is headquartered.
2. Host country nationals—employees who live in a different country where a work
assignment takes place.
3. Third-country nationals—employees with skill sets needed for international
assignments but are not citizens of either home or host country.
Our next consideration is where we will source the individual from for an international
assignment. We have three generic options, each of which may be the best in some
circumstances:
XIV. Ethnocentric, Geocentric, or Polycentric Organizations
a. Ethnocentric organizations tend to believe their values and culture are superior to
XV. Outsourcing Alternatives
a. Outsourcing—process of hiring another organization to do work that was previously
done within host organization.
XVI. Developing and Managing Global Human Resources
a. To achieve HR success on a global scale, companies must select right individuals, train
appropriately, and support with resources.
b. International assignments different considerations.
i. Recruiting and selecting internationally
a) Negotiating assignments
Lecture Notes
Lussier, Human Resource Management, Third Edition
SAGE Publishing, 2018
b) Tax consequences
c) Relocation expenses
Ultimately, in many industries at least, the company will consider international operations of
some type to gain a competitive advantage over its competitors. And along with the creation of
an international presence, the complexity of the firm goes up even more. This is the point at
which HR must become a different and more complex department. International operations
require us to rethink every major function in HRM. For example:
Employee and labor relations. Different countries’ laws concerning employee relations require
HR to become competent in legal issues where the company operates. Many countries’ labor
laws are strongly oriented toward protection of the individual employee—much more so than in
the United States—and the HR manager must become competent in all of these legal differences.
In addition, cultural attitudes and national laws also affect when and how employees are
disciplined.
XVII. Expatriate Training Considerations
a. Expatriates are employees who leave home country to work in another country.
i. Costs of training and preparing expatriates are high. No guarantees employees
who achieve success domestically will prosper elsewhere.
ii. To ensure success, there must be preparation in culture and communication.
XVIII. Compensating a Global Workforce
a. Pay, benefits, and incentives take different dynamics for a global workforce.
Lecture Notes
Lussier, Human Resource Management, Third Edition
SAGE Publishing, 2018
b. Considerations include cost of living adjustments and pay differentials. These
alternatives should be considered:
i. Balance sheet approach
ii. Split pay approach
iii. Negotiation approach
iv. Localization approach
v. Lump sum option
The obvious first question about compensation in a global environment is whether
compensation in various countries needs to be different and, if so, why and how do we
compensate a global workforce fairly.
Split–pay approach. A variant on the balance sheet approach is to use split pay. In fact, about
half the organizations in a recent survey said that they use split pay as at least part of their
compensation strategy. Split pay is a process where the organization pays the individual partly
in home-country currency and partly in the currency of their work location. This allows the
individual to lower currency exchange rate risks in moving money from one location to another
and to pay obligations in both their home location and their work location much easier than if
all their pay were in one currency.
XIX. The Worldwide Labor Environment
Lecture Notes
Lussier, Human Resource Management, Third Edition
SAGE Publishing, 2018
a. Demands for union representation and fair labor practices are gaining greater emphasis
in global environment.
b. Effects are evident in developing countries as they expand globally:
i. China