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Lecture 11

HRM 3430 Lecture 11: Chapter 11

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Human Resources Management
HRM 3430
Leigh Lampert

Chapter 11 Key Challenges Influencing HR Practices and Processes (International) -When entering new markets, organizations are confronted with a wide range of challenges mostly related to socio- economic, political, and technological aspects. 1. Workforce Diversity: -Diversity issues in Canada include: • Increased number of older workers • Employees with disabilities • Gender issues • Ethnic and cultural differences among employees. -Complexity of workforce diversity will grow with each foreign market Canadian organizations decide to enter -IHRM systems must consider and accommodate the needs of an increasingly diverse labour force and tailor international HR policies and practices accordingly. 2. Employment Legislation: -HR managers are faced with a complex legislation framework -When crossing national borders, Canadian HR managers encounter additional, host-country employment legislation. 3. The Role of the HR Function: -HR departments often understaffed, under funded, and limited to a supporting role with little key decision-making power -Employment legislation, socioeconomic, and technological differences in local markets demand sophisticated IHRM systems -Increased complexity of the HR function requires HR managers to redefine their role and outsource some of their responsibilities to specialists and consultants (e.g. international employment lawyers). 4. Flexibility: -Defined as the firm’s ability to respond to various demands from a dynamic, competitive environment -Advanced IHRM systems can obtain a high level of fit and flexibility by developing a strategic approach toward the management of international workforces. 5. Security: -Business environmentsincreasingly unsafe important to consider the security of employees overseas -Establishing relationships with Canadian government representatives is essential, such as: • Embassies/High Commissions, Consulates • Chambers of commerce Strategic International HR Planning Strategic International HRP: projecting global competence supply, forecasting global competence needs, and developing a blueprint to establish competence pools within companies. -Strategic International HRM (“IHRM”): HR issues, functions, and policies and practices that result from the strategic activities of multinational enterprises and that affect the international concerns and goals of these enterprises. Strategic IHRM Fits with Corporate IB Strategies -Fit: degree to which needs, demands, goals, objectives, and/or structure of one component are consistent with those of another -Internal fit: degree that the IHRM approaches will be influenced by the overall corporate international strategies focus on organization -External fit: degree to which the IHRM approaches respond/comply with the local legal, political, economic, and cultural factors within the country the MNC is doing businessfocus on local environment. Corporate IB Strategies -Four stages of growth as multinational corporations evolve: 1. Domestic Strategy: internationalizing by exporting goods abroad as a means of seeking new markets • MNCs begin to become international by exporting goods abroad as a means of seeking new markets; • The firm is focusing on domestic markets and exporting its products without altering their products for foreign markets; • An export manager may be assigned to control foreign sales; • Management adopts an ethnocentric attitude, as well as a short-term perspective. -(ETHNOCENTRISM: judging another culture solely by the values and standards of one's own culture. Ethnocentric individuals judge other groups relative to their own particular ethnic group or culture, especially with concern to language, behavior, customs, and religion.) 2. Multidomestic strategy: concentrates on the development of foreign markets by selling to foreign nationals • Concentrates on developing foreign markets by selling to foreign nationals • As firm develops, a subsidiary is usually set up; • Employees working in this subsidiary will have a range of tasks, concentrating on the development of foreign markets by selling to foreign nationals; • One or more managers may be required to manage the global subsidiary; • Management at this stage realizes that there are “many good ways” to do business and that cultural sensitivity is important to be successful in the foreign, local market; • Firms use the multi-domestic approach to develop culturally appropriate products for local markets. 3.Multinational strategy: standardizing the products and services around the world to gain efficiency • Standardizing global products and services  gain efficiency • When more and more MNCs enter the same market, the competition from other MNCs forces management to shift its strategy; • Products and services around the world are standardized in order to gain efficiency; • Price-sensitive perspective is popular and cultural differences are less emphasized. 4.Global strategy: aims to introduce culturally sensitive products in chosen countries with the least amount of cost • Introducing culturally sensitive products in chosen countries with the least amount of cost • Resources and materials within regional branches are reallocated globally  quality products at lowest cost. • Geocentric perspective is taken by company management • Need to be culturally sensitive and move HR resources strategically around subsidiaries and HQ • Disadvantage = great complexity and in difficult economies, political considerations might still prevail Adaptive IHRM Approach -Adaptive IHRM approach: HRM systems that will be consistent with the local, economic, political, and legal environments -Companies striving to introduce culturally sensitive products, with the least amount of cost -Resources and materials within regional branches are reallocated globally to make quality products at the lowest cost -Company management at this stage takes a geocentric perspective -Local cultural, political and legal issues will be considered and local HR practices will be adopted -A local executive is usually hired to take care of the subsidiaries’ HR management -Local manager familiar with the local issues; no languag
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