INDG 401 Lecture Notes - Lecture 19: Independent Business, Language Barrier, Free Trade
9 Jun 2018
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Lecture 19/20
The International Envt.
Global similarities:
• Free trade
• Service based business
• Integrated technology platforms
Global Differences:
• Political, economic, sociocultural
• Property rights (can be poorly protected in some countries)
• Civil unrest
• Intellectual property rights (hard to protect sometimes)
Managing across borders
• International corporation: Domestic firm that uses existing capabilities to penetrate
overseas markets
• Multi-domestic corp.: Firm with independent business units across the world
• Global corp.: Firm that has integrated worldwide operations through a centralized
home office.
• Transnational corp.: Firm that attempts to balance local responsiveness and global
scale via a network of specialized operating units
Oil & Wasser article:
• Cultural issues:
o Differences in the way the firm is managed in each country
o Not enough information gathered by the British firm
o Language barrier
• Before the merger: Both firms should have done more research on each other
Domestic vs. International HRM:
• Issues:
o Relocation
o Orientation
o Translation services
Staffing Internationally
Expatriates, or Home country nationals
• Employees from the home country who are on international assignment
Host country nationals: Employees who are natives of the host country
Third Country nationals: Employees who are natives of a country other than the home
country or host country
Recruiting Internationally:
find more resources at oneclass.com
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• Work permit/visa
• Guest workers
• Apprenticeships
• Transnational teams
Selecting Employees Internationally: Can be difficult
• Get to know the local market and customs where you plan to hire
• Understand the local market:
o Get to know universities, technical schools, primary schools
o Develop networks in the business and govt. communities
o Understand employee of the firm’s competitors
Selecting global managers
• Global manager: A manager equipped to run an international business
To select global managers:
• Being with self-selection
• Create a candidate pool
• Assess candidate’s core skills
• Assess augmented skills and attributes
Training and development:
• Essential elements of training and development programs to prepare employees for
working internationally:
o Language & cultural training
o Assessing and tracking career development
o Managing personal and family life
o Repatriation
Compensation:
• Different countries = different norms on compensation
• General rule is to match the rewards to the values of the local culture
• Create a pay plan that supports the overall strategic intent of the organization but
provides enough flexibility to customize it to specific locations
• Compensation of Host country employees:
o Global compensation system: a centralized pay system whereby a host-
country employees are offered a full range of training programs, benefits and
pay comparable with a firm’s domestic employees but adjusted for local
differences
• Compensation of expatriate managers:
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Global similarities: free trade, service based business. Global differences: political, economic, sociocultural, property rights (can be poorly protected in some countries, civil unrest. Expatriates, or home country nationals: employees from the home country who are on international assignment. Host country nationals: employees who are natives of the host country. Third country nationals: employees who are natives of a country other than the home country or host country. Recruiting internationally: work permit/visa, guest workers, apprenticeships, transnational teams. Selecting global managers: global manager: a manager equipped to run an international business. To select global managers: being with self-selection, create a candidate pool, assess candidate"s core skills, assess augmented skills and attributes. Training and development: essential elements of training and development programs to prepare employees for working internationally, language & cultural training, assessing and tracking career development, managing personal and family life, repatriation.
