International Management - PowerPoint Presentation

Slide1

International Management

International Management

Slide2

Chapter 14

Human Resource Selection

and

Development

across Cultures

Slide3

Learning Objectives

Identify

the three

basic sources that MNCs can tap when filling management vacancies in overseas operations in addition to options of subcontracting and outsourcing

Describe the selection criteria and procedures used by organizations and individual managers when making final decisions

Slide4

Learning Objectives (continued 1)

Discuss the reasons why people return from overseas assignments, and present some of the strategies used to ensure a smooth transition back into the home-market operation

Describe

the training process, the most common reasons for training, and the types of training that often are provided

Slide5

Learning Objectives (continued 2)

Explain

how cultural assimilators work and why they are so highly regarded

Slide6

Challenge of Talent Retention in India

MNCs mistakenly use the same methods to try to retain employees in India as in the home country

Key to

high retention

- Employee engagement

HR practices to keep employees engaged

Performance management

Professional development

Manager support

Organizational commitment

to a larger social

purpose

Slide7

Importance of International Human Resources

Human

resource management is

key

to an

efficient and

productive

workplace

Understanding how employees feel they are being

treated is

important

Retention and commitment

to the

organization is achieved

by focusing on employees and tailoring human resource management to the

individual

Slide8

Importance of International Human Resources (continued)

Success of firms depends on attracting

the most qualified employees and matching them to the jobs for which they are best suited

Sending employees overseas can be expensive

Investment in

recruiting and

training is required

Nature of the human resources process is changing

as a result of ongoing pressures for reduced costs and increased efficiencies

Slide9

Sources for Human Resources

Home-country nationals

Host-country nationals

Third-country nationals

Inpatriates

Other potential sources

Subcontracting

Offshore outsourcing

Slide10

Home-Country Nationals

Managers who are citizens of the country where the MNC is headquartered

Called headquarters nationals or

expatriates

Reasons to use home-country nationals

Start up operations

Provide technical expertise

Develop promising managers

Facilitate coordination

and control

Slide11

Host-Country Nationals

Local managers hired by the MNC

Reasons to use host-country nationals

Countries expect

the MNC to hire local

talent

Cut cost

of

transferring and maintaining home-country personnel

Slide12

Third-Country Nationals (TCNs)

Managers who are citizens of countries other than the country in which:

MNC is headquartered

Managers are assigned to work by the MNC

Advantages of using TCNs

Salary and

benefit package

is

less than that of a home-country

national

Good working

knowledge of the region or

familiarity with the local language

Slide13

Third-Country Nationals (TCNs)(continued)

Achieve corporate objectives is

more

effective

than

with expatriates

or local nationals

Substitute for expatriates

and

offer new perspectives to viewpoints

of local nationals and headquarters

personnel

during

rapid expansion

Possible to demonstrate

a global or transnational image and

bring

unique cross-cultural skills to the

relationship

in

joint ventures

Slide14

Inpatriates

Individuals from a host country or

third country

who are assigned to work in the home country

Called inpats

Help MNCs develop their global core competencies

Global managers

or transnational managers

are now emerging

Slide15

Offshore Outsourcing

Presents significant

opportunities for cost savings, lower overhead, and access to qualified personnel

Politically

controversial -

Union

groups, politicians, and NGOs have challenged MNCs’ right to engage in labor

arbitrage

Can create

quality control problems

Tool for

managing and deploying international human resources

Slide16

Selection Criteria for International Assignments

General

criteria

Adaptability to

cultural change

Physical and

emotional health

Age,

experience, and education

Language training

Motivation

for

a

foreign assignment

Spouse and family adaptability

Leadership

ability

Slide17

Expat Assignments

Objective - To fill a managerial or technical gap

Employee benefits - Faster promotions, higher pay, stronger

performance

ratings, and more mobility

within the

company

Rejected due to family and spouse's career concerns

Extremely

expensive and r

eturn

on investment is difficult to

quantify

Slide18

International Human Resource Selection Procedures

Tests and interviews

Adjustment model

Anticipatory adjustments -

Carried

out before the expat leaves for the assignment

In-country adjustments -

Takes

place once the expatriate is on

site

Slide19

Factors Influencing Anticipatory and In-Country Adjustments

Anticipatory adjustmentsPre-departure trainingPrevious experience the expat may have had with the assigned country

In-country adjustments

Ability to

maintain a positive

outlook

The job

itself

Organizational culture

and how easily the expat can adjust to

it

Nonwork matters

Ability to

develop effective socialization tactics

Slide20

Compensation

Base salary - Amount of money that an expatriate receives in the home country

Benefits -

One-third

of compensation for regular employees

Allowances -

Expensive feature that

covers

a variety of

expenses

Cost-of-living, relocation

, housing, education, and

hardship allowances

Slide21

Compensation (continued)

Incentives

-

Ongoing

premiums

are

replaced

with

a one-time, lump-sum premium

Tax

equalization

-

Any taxes that exceed what would have been imposed in the home country are paid by the MNC

Slide22

Approaches to Tailor the Compensation Package

Balance-sheet approach

:

Ensures the expat does not lose money by taking the assignment

Negotiation approach -

Involves

working out a special, ad hoc arrangement that is acceptable to both the company and the

expat

Localization

:

Pays the expat a salary comparable to that of local nationals

Slide23

Approaches to Tailor the Compensation Package (continued)

Lump-sum

method

:

Gives expats a

predetermined amount of money and

lets them

decide how to spend

it

Cafeteria approach

:

Gives expats a series of options and

lets

them decide how to spend the available funds

Regional system

:

Sets a compensation system for all expats who are assigned to a particular region

Slide24

Individual and Host-Country Viewpoints

Candidate motivations

Greater demand for their talents abroad than at

home

Individual achievement and advancement

Security and good working conditions

Earning and fringe

benefits

Host-country desires

Preference for a managerial style similar to that of their own country

Slide25

Repatriation

Return to one’s home country from an overseas assignment

Reasons for returning

Agreed-on tour of duty is over

Family concerns

Difficulty faced by spouses in acclimating

to a new

culture

Desire

to

educate

children

in a home-country school

Company restructuring

Slide26

Repatriation: Readjustment Problems

Slide27

Transition Strategies

Help smooth

the adjustment from an overseas to a stateside assignment

Repatriation agreements

:

Firm:

Agrees with

the individual

the duration of overseas

posting

Promises to give the individual, on return, a job that is mutually acceptable

Some

firms

rent

or

maintain

expatriates’ homes until they return

Slide28

Transition Strategies (continued 1)

Arranging

an event to welcome and recognize the employee and

family

Establishing

support to facilitate family

reintegration

Offering

repatriation counseling or workshops to ease the

adjustment

Assisting

the spouse with job counseling, résumé writing, and interviewing techniques

Slide29

Transition Strategies (continued 2)

Providing

educational counseling for the

children

Providing

the employee with a thorough debriefing by a

facilitator

Offering

international outplacement to the employee and reentry counseling

Arranging

a postassignment interview with the expatriate and spouse

Slide30

Training in International Management

Helps ensure

that

employees' full

potential

is tapped

in overseas

assignments

Aids in understanding

the customs, cultures, and work habits of the local culture

Simplest training - Placing

a cultural integrator in each foreign

operation

Topics in cultural training - Social and business etiquette

, customs, economics, history,

and politics

Slide31

Philosophies That Influence Training Programs

Ethnocentric

MNC

Stresses

nationalism and puts home-office people in charge of key international management positions

Polycentric

MNC

Places

local nationals in key positions and allows these managers to appoint and develop their own

people

Slide32

Philosophies That Influence Training Programs (continued)

Regiocentric MNC

Relies

on local managers from a particular geographic region to handle operations in and around that area

Geocentric

MNC

Seeks

to integrate diverse regions of the world through a global approach to decision

making

Slide33

Reasons for Training

Organizational reasons

Help overcome ethnocentrism

Ethnocentrism

: B

elief that one’s way of doing things is superior to that of others

Improve the flow of communication

Increase overall efficiency and profitability

Slide34

Reasons for Training (continued)

Personal reasons

Improve

overseas

managers'

ability to interact effectively with local people

and their

personnel

Develop foreign

language

skills

Deal with arrogance

, overruling of

decisions, and criticism

Improve overall

management

style

Slide35

Types of Training Programs

S

mall

firms rely

on standard training

programs

Example - Q

uantitative

analysis

Tailor-made

training

programs

Employed by larger firms

Created for

the specific needs of the participants

Designed to

provide a new set of skills for a new

culture

Slide36

Cultural Assimilators

Expose members

of one culture to some of

the concepts

, attitudes, role perceptions, customs, and values of another

culture

Include

critical

incidents

and alternative responses that are validated

for

their effectiveness

Expensive but can

be

applied

to nearly all

cultures

Slide37

Positive Organizational Behavior (POB)

Study and application of positively oriented human resource strengths and psychological capacities

Can be measured, developed, and effectively managed for performance improvement in today’s workplace

Slide38

Positive Organizational Behavior (POB) (continued)

Positivity in workplace has been linked to employee satisfaction

Positive individual traits

,

internal and external states

, and systems

promote

positive

behavior

Results in

positive organizational

citizenship behavior (OCB

)

Slide39

Future Trends

Localization of expatriates

Integration of

talent management and international assignment

mobility

Emergence of cross-border commuters

Employees who

regularly move back and forth between countries

Rise and growth of emerging markets

Slide40

Be the Management Consultant

Given the Russian government’s history of interfering with private business, would you make as large

an

investment in Russia as BP has done?

What are the pros and cons of this investment?

Does the fact that BP’s investment is suffering from Ukraine-related sanctions affect your decision to invest in the country in any sense?

Slide41

Review and Discuss

A New York-based MNC is in the process of staffing a subsidiary in New Delhi, India

Why would it consider using expatriate managers, local managers

, or third-country managers in the unit?

Slide42

Review and Discuss (continued 1)

What selection criteria are most important in choosing people for an overseas assignment?

Identify and describe the four that you judge to be of most universal importance, and defend your choice

What are the major common elements in an expat’s compensation package?

Besides base pay, which would be most important to you? Why?

Slide43

Review and Discuss (continued 2)

Why are individuals motivated to accept international assignments?

Which of these motivations would you rank as positive reasons?

Which would you regard as negative reasons?

Why do expatriates return early?

What can MNCs do to prevent this from happening?

Identify and discuss three steps they can take

Slide44

Review and Discuss (continued 3)

What kinds of problems do expatriates face when returning home?

Identify and describe four of the most important

What can MNCs do to deal with these repatriation problems effectively?

Slide45

Review and Discuss (continued 4)

How do the following types of MNCs differ: ethnocentric, polycentric, regiocentric, and geocentric?

Which type is most likely to provide international management training to its people?

Which is least likely to provide international management training to its people?

Slide46

Review and Discuss (continued 5)

IBM is planning on sending three managers to its Zurich office, two to Madrid, and two to

Tokyo, and

none of these individuals has any international experience

Would you expect the company to use a standard training program or a tailor-made program for each group?

Slide47

Review and Discuss (continued 6)

Zygen Inc., a medium-sized manufacturing firm, is planning to enter into a joint venture in China

Would training be of any value to those managers who will be part of this venture?

If so, what types of training would you recommend?

Slide48

Review and Discuss (continued 7)

Hofstadt & Hoerr, a German-based insurance firm, is planning on expanding out of the EU and opening offices in Chicago and Buenos Aires

How would a cultural assimilator be of value in training the MNC's expatriates?

Is the assimilator a valid training tool?

Slide49

Review and Discuss (continued 8)

Ford is in the process of training managers for overseas assignments

Would a global leadership program be a useful approach?

Why or why not?

Slide50

Review and Discuss (continued 9)

Microsoft is weighing setting up a new R&D facility in India to develop new software applications

Should it staff it with Microsoft employees or Indian employees? Or should it subcontract with an Indian firm?

Explain your answer and some of the potential challenges in implementing it