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Chapter

Global HR Chapter

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Department
Business
Course
BU354
Professor
Shawn Komar
Semester
Fall

Description
Global HR Chapter: Managing Human Resources Globally HRM in a Global Environment  The HRM function needs to continuously re-examine its role in supporting this expanding pace of business globalization  This requires HRM to: o Align HRM processes and functions with global requirements o Adopt a global mindset including a thorough understanding of the global environment and the impact on managing people worldwide o Enhance its own capabilities and competencies to become a business partner in acting on global business opportunities  Companies set up operations oversea because they can operating with lower labour costs  Organizations that operate facilities in foreign countries need to understand the laws and customs that apply to employees in those countries Employees in an International Workforce  Organizations who operate globally have employees that are citizens of more than one country  Home country – where the organization’s headquarters is located o E.g. Fairmount employee who is a Canadian citizen and works at Fairmount’s headquarters or one of its Canadian properties is therefore a home-country national  Host country – where an organization operates a facility (other than the home country) o E.g. Barbados is a host country of Fairmont b/c of its operations there. o Employees who are citizens of the host country are known as host-country nationals  Third country – a country that is neither the home country nor the host country o E.g. Hiring an Australian manager to run operations in Barbados o These employees are called third-country nationals  Expatriates – employees who take assignments in other countries Employers in the Global Marketplace  Most organizations begin by serving customers and clients within a domestic marketplace.  If products succeeds, the company might expand operations to other domestic/international locations  International organization – an organization that sets up one or a few facilities in one or a few foreign countries o HR issue: whether or not a particular location provides an environment where the organization can successfully acquire and manage human resources  Multinational company – an organization that builds facilities in a number of different countries in an effort to minimize production and distribution costs o HR issue: similar but larger than those of an international organization b/c more countries are involved  Global organization - chooses to locate a facility based on the ability to effectively, efficiently, and flexibly produce a product or service, using cultural differences as an advantage o HR issue: needs flexibility  Transnational HRM system – type of HRM system that makes decisions from a global perspective, includes managers from many countries, and is based on ideas contributed by people representing a variety of cultures o Decisions balance uniformity (for fairness) with flexibility (to account for cultural and legal differences) Factors Affecting HRM in International Markets Culture  a community’s set of shared assumptions about how the world works and what ideals are worth striving for; expressed through customs, languages, religions, and so on.  Often determines the other three international influences  Often determines the effectiveness of various HRM practices  Hofstede’s study of culture: o Individualism/collectivism: describes the strength of the relation between an individual and other individuals in the society  High: Canada, Great Britain, and the Netherlands  think and act as individuals  Low: Colombia, Pakistan, and Taiwan  think of themselves mainly as group members o Power distance: concerns the way the culture deals with unequal distribution of power and defines the amount of inequality that is normal  High: India and Japan  normal to maintain large differences in power  Low: Canada, Denmark and Israel  tries to eliminate inequalities o Uncertainty avoidance: describes how culture handle the fact that the future is unpredictable  High: Greece and Portugal  has a strong cultural preference for structured situations; rely on religion, law, and technology for rules about how to behave  Low: Singapore and Jamaica  people take each day as it comes o Masculinity/femininity: the emphasis a culture places on practices or qualities that have traditionally been considered masculine or feminine.  Masculine: Germany and Japan  values achievement, money making, assertiveness, competition  Feminine: Sweden and Norway  values relationships, service, care for the weak, preserving the environment o Long-term/short-term orientation: suggests whether the focus of cultural values is on the future (long term) or the past and present (short term)  Long term: Japan and China  values saving and persistence  Short term: Canada and Russia  respect for past tradition, and fulfilling social obligations in the present Education and Skill Levels  Spending on education is greater per student in high-income countries than in poorer countries  Companies with foreign operations locate in countries where they can find suitable employees Economic System  Socialist systems take a higher percentage of each worker’s income as the worker’s income increases  Capitalist systems tend to let workers keep more of their earnings  Due to this, pay structures are more complicated with cross national boundaries Political-Legal System  The country’s laws often dictate the requirements for certain HRM practices, such as training, compensation, selection, and labour relations.  Organizations that expand internationally must gain expertise in the host country’s legal requirements and ways of dealing with its legal system Workforce Planning in a Global Economy  Involved in decisions about participating as an exporter or as an international, multinational, or global company  Involves decisions about where and how many employees are needed for each international facility Selecting Employees in a Global Labour Market  Organizations fill many key foreign positions with home-country or third-country nationals  Sometimes a person’s technical and human relations skills outweigh the advantages of hiring locally  Hiring immigrant employees may be part of an effective recruitment and selection strategy  Selection of employees for international assignment should reflect these criterion: o Competency in the employee’s area of expertise o Ability to communicate verbally and nonverbally in the foreign country o Flexibility, tolerance of ambiguity, and sensitivity to cultural differences o Motivation to succeed and enjoyment of challenges o Willingness to learn about the foreign country’s culture, language, and customs o Support from family members  Personality, qualities of flexibility, motivation, agreeableness, and conscientiousness are important when entering another culture  Culture shock – disillusionment and discomfort that occur during the process of adjusting to a new culture  Virtual expatriates - employees who manage an operation abroad without permanently locating in the country o Take frequent trips to the foreign country, use technologies such as videoconferencing and electronic collaboration tools to stay in touch  Emotional cycle associated with a foreign assignment: honeymoon  culture shock  learning  adjustment Training and Developing a Globa
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