BU354 Chapter Notes -Culture Shock, Videotelephony, Agreeableness

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25 Nov 2012
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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
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