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SF State IBUS 618 - Lecture Notes Chapter 1

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Chapter 1Chapter ObjectivesThree Approaches to IHRMSlide 4The General Field of HRWhirlpool’s GlobalizationPotential Factors to ConsiderWhirlpools Global NetworkWhat does IHRM add into the Traditional Framework of HRM?Slide 10What is an expatriate?Slide 12Differences between Domestic HRM and IHRMSlide 14World top ten non-financial transnational corps., ranked by transnational indexWorld top ten non-financial transnational corps., ranked only by foreign assetsStrategic HRM in multinational enterprisesLaurent’s steps to truly international HRMChapter Summary (cont.)Chapter SummaryDiscussion QuestionsIBUS 618 Dr. Yang 1Chapter 1Introduction:The Enduring Context of IHRMIBUS 618 Dr. Yang 2Chapter ObjectivesWe will establish the scope of the textbook:Define key terms in IHRMReview expatriate management evolutionOutline the differences between domestic HRM and IHRMIdentify variables that moderate these differences Discover the increasing complexity and potential challenges of current IHRM, and Discuss trends and emerging challenges in the global work environment in which IHRM functions and activities are conductedIBUS 618 Dr. Yang 3Three Approaches to IHRMCross-cultural managementExamine human behavior within organizations from an international perspectiveComparative HRM and Industrial RelationsSeeks to describe, compare and analyze HRM systems and IR in different countriesHRM in multinational firmsExplore how HRM is practiced in multinationalsIBUS 618 Dr. Yang 4Interrelationships between Approaches to the FieldFigure1-1IBUS 618 Dr. Yang 5The General Field of HRMajor Functions and ActivitiesHuman resource planningStaffingRecruitmentSelectionPlacementPerformance managementTraining and developmentCompensation (remuneration) and benefitsIndustrial relationsIBUS 618 Dr. Yang 6Whirlpool’s Globalization Where to go among alternative markets?$23/hr in the U.S. including the benefits$3/hr in Mexico $1/hr in China$32/hr in GermanyMode of entry?Acquisition of Phillips N.V. for more than $1 billion in 1991Whirlpool’s total employees today:23,000 in the U.S.45,000 overseasIBUS 618 Dr. Yang 7Potential Factors to ConsiderTypes of industry and technologyMode of entryTime of entryCost of entryHuman resourcesTypes of laborCost of laborProximity to the market and consumersRegionalGlobalStandardization vs. AdaptationIBUS 618 Dr. Yang 8Whirlpools Global NetworkThe high-end $1,200 model from GermanyThe smaller front loaders from MexicoMexican engineers, foremen and supervisors had 18 months training in GermanyTop loading machines made in Ohio for AmericansMicrowave ovens engineered in Sweden and made in ChinaRefrigerators assembled in Brazil and exported to EuropeIBUS 618 Dr. Yang 9What does IHRM add into the Traditional Framework of HRM?Types of employeesWithin and cross-cultural workforce diversityCoordinationCommunicationHuman resource activitiesProcurementAllocationUtilization of human resourcesNation/country categories where firms expand and operateHost countryParent countryThird countryIBUS 618 Dr. Yang 10A Model of IHRMFigure1-2IBUS 618 Dr. Yang 11What is an expatriate?An employee who is working and temporarily residing in a foreign countrySome firms prefer to use the term “international assignees”Expatriates are PCNs from the parent country operations, TCNs transferred to either HQ or another subsidiary, and HCNs transferred into the parent countryGlobal flow of human resourcesIBUS 618 Dr. Yang 12International Assignments Create Expatriates:Figure1-3IBUS 618 Dr. Yang 13Differences between Domestic HRM and IHRMMore HR activitiesThe need for a broader perspectiveMore involvement in employees’ personal livesChanges in emphasis as the workforce mix of expatriates and locals variesRisk exposureBroader external influencesIBUS 618 Dr. Yang 14Variables that Moderate Differences between Domestic HR and IHRMFigure1-4IBUS 618 Dr. Yang 15World top ten non-financial transnational corps., ranked by transnational indexTable1-1IBUS 618 Dr. Yang 16World top ten non-financial transnational corps., ranked only by foreign assetsTable1-2IBUS 618 Dr. Yang 17Strategic HRM in multinational enterprises Figure1-5IBUS 618 Dr. Yang 18Laurent’s steps to truly international HRM1. Recognize that one’s own HRM reflects home cultureassumptions and values.2. Recognize that one’s own peculiar ways are neither universally better nor worse than others - just different and likely to exhibit strengths and weaknesses, particularly abroad.3. Recognize that organization’s foreign subsidiaries may prefer other ways to manage people – ways that are neither intrinsically better nor worse, but possibly more effective locally.4. Headquarters willingness to acknowledge cultural differences and steps to make them discussable and therefore usable.5. Build shared genuine belief that cross-cultural learning will result in more creative and effective ways of managing people.1. Recognize that one’s own HRM reflects home cultureassumptions and values.2. Recognize that one’s own peculiar ways are neither universally better nor worse than others - just different and likely to exhibit strengths and weaknesses, particularly abroad.3. Recognize that organization’s foreign subsidiaries may prefer other ways to manage people – ways that are neither intrinsically better nor worse, but possibly more effective locally.4. Headquarters willingness to acknowledge cultural differences and steps to make them discussable and therefore usable.5. Build shared genuine belief that cross-cultural learning will result in more creative and effective ways of managing people.IBUS 618 Dr. Yang 19Chapter Summary (cont.)We have established the scope of the textbook:Defined IHRM and the term “expatriate”.Discussed major differences between domestic HRM and IHRM – looking at six factors: More HR activitiesNeed for a broader perspectiveMore involvement in employees’ personal livesChanges in emphasis as the workforce mix of expatriates and locals varies, Risk exposure and More external influencesIBUS 618 Dr. Yang 20Chapter SummaryIdentified four other variables moderating that differences between domestic and international HRMHost-country cultural environmentType of the industryReliance of the MNC on its


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