Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall 14-1 Human Resource Management...

Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall

14-1

Human Resource Management 11th EditionChapter 14

GLOBAL HUMAN RESOURCE MANAGEMENT


14-2

HRM in Action: Global Bribery

• Foreign Corrupt Practices Act - prohibits U.S. firms from bribing foreign officials

• 43% reported that they had lost new business in last 5 years because a competitor had paid a bribe

• Conducting business globally exposes U.S. and other companies to an environment that permits bribery


14-3

HRM in Action: Global Bribery (Cont.)

• Law has teeth• Lockheed Corporation paid

approximately $25 million • Titan Corporation paid $28.5 million • President of American Rice, Inc.

sentenced to 63 months in prison• Not having ability to use bribery as a

tool of doing business has been costly for American companies


14-4

Evolution of Global Business

• Not long ago, Mercedes-Benz was still a German company, General Electric was American, and Sony was Japanese

• Many United States firms such as Coca-Cola, Procter & Gamble, and Texas Instruments do most of their business and employ most of their workers outside U.S.

• Many non-U.S. companies make products here such as Toyota – Americans making cars in Kentucky


14-5

Evolution of Global Business (Cont.)

• Exporting - Selling abroad retaining foreign agents and distributors

• Licensing - Organization grants foreign firm right to use intellectual properties

• Franchising - Parent company grants another firm right to do business in prescribed manner


14-6

Evolution of Global Business (Cont.)

• Multinational corporation - Firm based in one country and produces goods or provides services in one or more foreign countries

• Global corporation - Corporate units in countries are integrated to operate as one organization worldwide – Operates as if entire world were one entity

• Transnational corporation - Moves work to places with talent to handle the job and time to do it at the right cost


14-7

Global Professional in Human Resources

• New certification for HRCI• Strategic international HR management• Organizational effectiveness and

employee development• Global staffing• International assignment management• Global compensation• International employee relations and

regulations


14-8

Global Human Resource Management

Global HR managers develop and work through integrated global human resource management system similar to one they experience domestically


14-9

Environment of Global Human Resource Management

1

Human Resource

Management

Other Functional

Areas

OperationsMarketing

Finance

Lega

l Con

side

ratio

ns E

cono

my

Technology

Society

Shareholders

Unions

Customers Competition Labor Market

Human Resource

Development

Com

pens

atio

n

Staffing

Em

ployee and

Labor Relations

Safety and Health

INTERNAL ENVIRONMENT

EXTERNAL ENVIRONMENT UNITED STATES

GLOBAL ENVIRONMENTU

nanticipated Events


14-10

Global Staffing

• Types of Global Staff Members

• Approaches to Global Staffing


14-11

Types of Global Staff Members

• Expatriate - Employee working in firm who is not citizen of country in which firm is located but citizen of country where organization is headquartered

• Host-country national - Employee’s nationality same as location of subsidiary

• Third-country national - Citizen of one country, working in second country, and employed by organization headquartered in third country


14-12

Approaches to Global Staffing

• Ethnocentric staffing - Companies primarily hire expatriates to staff higher-level foreign positions

• Polycentric staffing - When more host-country nationals are used throughout the organization, from top to bottom


14-13

Approaches to Global Staffing (Cont.)

• Regiocentric staffing - Regional groups of subsidiaries reflecting organization’s strategy and structure work as a unit

• Geocentric staffing - Uses worldwide integrated business strategy


14-14

Selecting Expatriates

• Self-selection - Employees determine if they are right for global assignment

(family also)

• Creating a candidate pool

• Technical skills assessment

• Making a mutual decision


14-15

Background Investigation

• Conducting background investigations is equally, or more, important

• Differences across cultures and countries often put up barriers to overcome

• Each country has own laws, customs, and procedures for background screenings


14-16

Trends & Innovations: American Companies

Hiring Foreign-Born Executives

• Growing number of American companies are hiring foreign-born CEOs

• PepsiCo, Coca-Cola Company, and Citigroup are examples

• Many believe that foreign executives will become more common as companies confront the expanding global market


14-17

Global Human Resource Development

• Expatriate Training & Development

• Continual Development: Online Assistance and Training

• Repatriation Orientation and Training


14-18

Expatriate Preparation and Development Program

Expatriate Preparation and Development

Prior to Departure: Orientation and Training

During Assignment: Continual Development

Near Completion: Repatriation Orientation Training

Language Culture History Local Customs Living Conditions

Expanding Skills Career Planning Home-Country Development

U.S. Lifestyle U.S. Workplace U.S. Employees


14-19

Global E-learning

• Globalization has created special need for e-learning

• Challenges for global e-learning implementation are language and localization issues

• Companies that want to offer courses in several languages usually turn to translators


14-20

Compensation for Host-Country Nationals

• Organizations should think globally but act locally

• Compensation - Normally, it is slightly above prevailing wage rates in the area

• Variations in laws, living costs, tax policies, and other factors all must be considered


14-21

Compensation for Host-Country Nationals (Cont.)

• Factors to consider: minimum wage requirements (often differ from country to country and even from city to city within a country); working time information such as annual holidays, vacation time and pay, paid personal days, standard weekly working hours, probation periods, and overtime restrictions and payments; and hiring and termination rules and regulations covering severance practices


14-22

Compensation for Host-Country Nationals (Cont.)

• Culture often plays part

• North American practices encourage individualism and high performance

• Continental European programs typically emphasize social responsibility

• Traditional Japanese approach considers age and company service as primary determinants of compensation


14-23

Expatriate Compensation

• Expatriate compensation provides exceptional challenges

• Largest expatriate costs include overall remuneration, housing, cost-of-living allowances and physical relocation

• U.S. citizens living overseas can exclude up to $80,000 of income earned abroad


14-24

Expatriate Compensation (Cont.)

• Country’s culture can affect compensation

• People in U.S. derive great status from high pay

• Nations in large parts of Europe and Asia shun conspicuous wealth

• In Italy, teamwork is more valued than individual initiative


14-25

Global Safety and Health

• Important because employees who work in safe environment and enjoy good health more likely to be productive and yield long-term benefits to organization

• U.S.-based global operations are often safer and healthier than host-country operations, but not as safe as similar operations in U.S.


14-26

Global Employees and Labor Relations

• Unionism maintains much of its strength abroad

• Foreign unions less adversarial with management


14-27

Global Employees and Labor Relations in European Countries

• Codetermination: Requires firms to have union or worker representatives on their boards of directors, is very common

• Laws make it hard to fire workers, so companies are reluctant to hire

• Generous and lengthy unemployment benefits discourage jobless from seeking new work


14-28

Global Employees and Labor Relations in South American Countries

• In countries such as Chile, collective bargaining for textile workers, miners, and carpenters is prohibited.

• Unions are generally allowed only in companies of 25 workers or more. Practice has encouraged businesses to split into small companies to avoid collective bargaining.


14-29

North American Free Trade Agreement (NAFTA)

• Between Canada, Mexico, and United States

• Facilitated movement of goods across boundaries within North America

• Free-trade zone of over 400 million people

• Combined gross domestic profit of about $12 trillion


14-30

Central American Free Trade Agreement

• Ratified by America’s Congress after long political battle, and signed into law in 2005

• Could provide huge economic boost for region


14-31

Legal and Political Factors

Nature and

stability of legal

and political

systems vary

throughout

globe


14-32

Legal and Political Factors (Cont.)

• Does operating under local laws and customs free a company of all ethical considerations?

• Continued child labor abuses in apparel and textile industries

• Indentured servitude exists for many foreign workers in Asian factories


14-33

Tariffs and Quotas

• Tariffs - Taxes collected on goods shipped across national boundaries

• Quotas - Limit number or value of goods imported across national boundaries


14-34

Virtual Teams in Global Environment

• Necessity of everyday working life

• Enable companies to accomplish things more quickly and efficiently


14-35

Difficulties that Virtual Teams Confront

• Do not feel as connected or committed to team

• Communication problems directly proportional to number of time zones separating them

• Language problems

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