Chapter ObjectivesI. Human Resource ObjectivesCHAPTER 19INTERNATIONAL HUMAN RESOURCE MANAGEMENTChapter Objectives- To describe the challenges of managing managers and labor personnel both in individual internationalmarkets and in worldwide operations- To examine the sources, qualifications, and compensation of international managers- To assess the effects of culture on managers and management policies- To illustrate the different roles of labor in international markets, especially that of labor participation inmanagementOpening CaseSearching for Global ExecsSummary:This case points out the difficulties companies have in staffing worldwide operations. Companies seek managers who are culturally diverse but responsive to the direction of headquarters. Must companies fill senior positions abroad with locals, but emphasize that solid international experience is needed for advancement. The development of global leaders is essential. Several examples of approaches being used by companies are provided.Chapter OutlineI. HUMAN RESOURCE OBJECTIVESA. Recruitment and retention of a workforceB. Increase effectiveness of workforceC. Activities and skills needed to meet objectives1. Personnel planning and staffing2. Personnel training3. Compensation according to effectiveness4. Labor-management relationsII. Managing ManagersA. Human Resource Needs in Early Stages of Internationalization1. Primary need is for an export managerB. Human Resource Needs in Advanced Stages of Internationalization1. Overseas assignment categoriesa. CEOb. Functional headc. Troubleshootersd. White- or blue-collar workers2. Ability to attract talent around the world can be a competitive advantage3. Company needs a network of global specialists to work together4. Company needs to develop clear career paths5. Company needs to coordinate and leverage resources across bordersC. Interfirm Cooperative Ventures1. Assign and motivate people so venture will meet goals2. Strategic management of human resourcesD. Sources for Management Recruitment1. Within the company2. Other product or region groups3. External4. Local managers5. Expatriates (Table 19.1, page 631)6. Criteria for deciding between expatriates and local managmersa. Availability and quality of talent poolb. Corporate policiesc. Environmental constants on the legal, cultural, and economic fronts7. Most managers in subsidiaries are host-country nationals8. Local managers may see things differently from headquarters9. English is usually the common corporate language (lingua franca)10. Avoid overemphasis on localization to develop a global understandingE. Selection Criteria for Overseas Assignments (Table 19.2, page 634)1. Competence Factorsa. Technical knowledgeb. Leadership abilityc. Experience and past performanced. Area expertisee. Language2. Adaptabilitya. Interest in overseas workb. Relational abilitiesc. Cultural empathyd. Appreciation of new management stylese. Appreciation of environmental constraintsf. Adaptability of family3. Personal Characteristicsa. Ageb. Educationc. Sexd. Healthe. Marital relationsf. Social acceptabilityFocus on CultureWomen and the Global Corporate LadderSummary:This case points out that there has been an increase in the number of women expatriates. Women are just asinterested in international careers as are men. They even have some advantages in that foreign contacts are anxious and curious to meet them and remember them better. They also have the empathy and human relations skills needed to succeed in new cultures.4. The Selection and Orientation Challengea. Adaptability Screening of candidate and familyb. Orientation program on internal and external aspects of assignmentF. Culture Shock—pronounced reactions to the psychological disorientation when spending an extended time in a new environment1. Causes and Remedies (Figure 19.3, page 639)—Four Stagesa. Initial euphoriab. Irritation and hostilityc. Adjustmentd. Reentry (may be accompanied by reverse cultural shock)2. Terrorism: Tangible Culture Shock—corporate facilities, operations and personnel are frequently targetsG. Repatriation1. Changes at home must be adjusted to2. Reverse cultural shock may emerge3. Must find a place in corporate hierarchy4. Family must give up their special statusH. Compensation1. Incentive to leave home country2. To maintain a given standard of living3. Consider career and family needs4. Facilitate reentry into the home country5. Structure of compensationa. Base salary and salary-related allowances1) Depends on qualifications, responsibilities, and duties2) Promotions and merit pay same as domestically3) Cost of Living Allowance (COLA)4) Foreign Service Premium—incentive to take overseas assignment5) Hardship Allowances6) Housing Allowance7) Tax-equalization Plansb. Nonsalary related allowances1) Relocation allowance2) Mobility allowance—incentive to take overseas assignment3) Home sale or rental protection, storage or shipment of household goods4) Automobile protection 5) Travel expenses6) Temporary living expenses7) Education allowance8) Medical expenses9) Home leave6. Method of Payment—most often part in local currency and part in currency of home country7. Compensation of Host-Country Nationals—determined by internal equity and external competitivenessIII. Managing Labor PersonnelA. Labor Participation in Management1. Labor Participation in Decision Making (Table 19.4, page 646)a. Rights of informationb. Consultationc. Codetermination—employees on the supervisory boardsd. Works Council—workers and managers who participate in decisions affecting them2. Improvement of Quality of Work life—various efforts to improve personal and professional developmenta. Work redesign programs attack undesirable features of a jobb. Team buildingc. Quality circlesd. Work scheduling and FlextimeB. The Role of Labor Unions varies from country to country1. Union concerns due to internationalizationa. Power of the firm to move production to another countryb. More difficult to get financial information for bargainingc. Insufficient attention to local issues while focusing on global optimizationd. Difficulty in being heard by decision makersFocus on EthicsGlobal Unions versus Global CompaniesSummary:The story is told of Trelleborg, a Swedish metal and mining conglomerate, which bough a plant in Copperhill, Tennessee. When the company insisted on seeping changes in work rules, the union went on strike and enlisted the aid of other international unions.