INTERNATIONALHR

MANAGEMENT

GOING INTERNATIONAL ExportingExporting LicensingLicensing

– One firm leases the right to use its intellectual property to One firm leases the right to use its intellectual property to another firm in exchange for a feeanother firm in exchange for a fee

FranchisingFranchising– An independent organization operates a business under the An independent organization operates a business under the

name of another in exchange for a feename of another in exchange for a fee

Foreign Direct InvestmentForeign Direct Investment– Joint Ventures; strategic alliancesJoint Ventures; strategic alliances– Sole ownershipSole ownership

International Business Strategies

MultilocalMultilocal– DecentralizedDecentralized

– Collection of independently operating organizationsCollection of independently operating organizations

Export MarketExport Market– Parent company maintains centralized controlParent company maintains centralized control

Global approachGlobal approach– Hybrid combination of multilocal and exportHybrid combination of multilocal and export

Domestic vs. International HR

Basic function and objective remains the same: Basic function and objective remains the same:

procurement, allocation, and utilization of peopleprocurement, allocation, and utilization of people . . Primary difference between IHR and domestic HR Primary difference between IHR and domestic HR

lies in the complexity of operating in different lies in the complexity of operating in different countries with different cultures and laws.countries with different cultures and laws.

Degree of complexity depends on:Degree of complexity depends on:– Extent of cultural diversityExtent of cultural diversity

– Approach taken to multinational entryApproach taken to multinational entry

– Top management attitudes (parochialism)Top management attitudes (parochialism)

International HR Strategies

EthnocentricEthnocentric– Centralized HRCentralized HR– Managed by Parent Country Nationals (PCNs) Managed by Parent Country Nationals (PCNs) – Pay based on local market for employees; home country for PCNsPay based on local market for employees; home country for PCNs– Training aimed at KSAs to perform the jobTraining aimed at KSAs to perform the job

PolycentricPolycentric– Decentralized HRDecentralized HR– Managed by Home Country Nationals (HCNs) Managed by Home Country Nationals (HCNs) – Pay based on local marketPay based on local market– Training given added importanceTraining given added importance

International HR Strategies

GeocentricGeocentric– Global workforce deployed throughout the worldGlobal workforce deployed throughout the world– Positions filled by most qualified regardless of Positions filled by most qualified regardless of

nationality: HCNs, PCNs, or TCNs,nationality: HCNs, PCNs, or TCNs,– Compensation based on value-addedCompensation based on value-added– Training and development emphasized Training and development emphasized

RegiocentricRegiocentric

Why Do International Managers Fail?

Does it change the essence of HR? Culture Shock Cultural arrogance (Parochialism)

Cultural Insensitivity The Key success factor?

– Cultural adaptability

CULTURAL ENVIRONMENT

LanguageLanguage Communication stylesCommunication styles

– NonverbalNonverbal– Direct vs. IndirectDirect vs. Indirect– Greeting: physical and verbalGreeting: physical and verbal

SpaceSpace– Structural & interpersonalStructural & interpersonal

Time orientationTime orientation– PunctualityPunctuality– Monochronic vs. PolychronicMonochronic vs. Polychronic

ReligionReligion Respect/formalityRespect/formality Consensus seekingConsensus seeking

HOFSTEDE’S DIMENSIONS

Individualism vs. CollectivismIndividualism vs. Collectivism Power DistancePower Distance Uncertainty AvoidanceUncertainty Avoidance Masculinity vs. femininityMasculinity vs. femininity Long-term orientationLong-term orientation