International H R M

Content: Review Intellectual Capital

Review International Joint Ventures
Globalising IHRM functions Utilising different drivers for IHRM functions

Presentation : 3rd world countries

Next Week: Health Issues/Outsourcing Presentation 2 Nov Environment

Review 9 Nov

Theory

What are intangible assets? What is the difference between technical & social IC? What are talent & speed capabilities? What are collaboration & learning capabilities? Should an organisation try to be best practice in all capabilities? What are the three main segments of IC as a concept? What is the critical issue in higher level organisational delivery? Why?

What is the primary purpose of an international joint venture? What are the main SHRM issues in setting up & managing a IJV? Is conflict a good thing in IJV? Is job insecurity an issue and how can it be dealt with?

Organisation Structure

Management Processes

Ability to develop and implement global strategy

Culture

PEOPLE

Figure 1. Organization and Management Factors Affecting Globalization

Source: Yip (1995: 23)

International HRM

international operations are becoming increasingly important for Australian organisations organisations must develop global business objectives and strategies to succeed must consider the influence of differing national cultures on an organisation, its strategic business objectives, its culture and the way in which it operates. organisation must decide when and how it will be sensitive to national cultures while remaining true to its core values and strategic business objectives

Typical HRM sub-functions

Job analysis Human resource planning Employee recruitment Employee selection Training and development Career planning and development Employee motivation Compensation and benefits Industrial relations Employee health and safety

International HRM
3 broad HR activities: procurement, allocation and utilisation IHRM activities occurred in 3 national or country categories: host country, home country and other country different types of workforce: host country nationals, parent country nationals and third country nationals

Differences Between Domestic and Intl HRM

additional activities such as taxation, international relocation, expatriate remuneration, cross-cultural training and repatriation increased complexities such as currency fluctuations, foreign HR policies and practices and differing labour laws increased involvement in the employees personal life - that is, assistance with personal taxation, voter registration, housing, childrens education, health, recreation and spouse employment a more complex employee mix, such as a mix of more people from different cultures and ethnic backgrounds as a more significant part of the work force

Differences Between Domestic and International HRM (cont):

more complex external influences, such as different cultures, political systems, ethics and laws increased risks, such as emergency exits for illness, personal security, kidnapping and terrorism.

HR managers and organisations which fail to comprehend this new international orientation and its complexities are unlikely to ever realise the full potential of their overseas ventures.

Elements of Culture

Technology
Technology

External Factors
Local
Legal, social & political environments Industry Characteristics

The Organisation
HR Practices & Outcomes
EEO Policy

Structural Factors Structure Size Control of Parent

Unionisation Number of Unions

Performance Appraisal Employee-Management Relations

Participative Practices Reward Systems & Remuneration Relative Productivity

Host-country culture & practices

Parent-country culture & practices

Relative Costs

Figure 1. A Model of SIHRM Practices (Rodwell and Teo, 1999)

GLOBAL VIEW

to be effective, HRM policies must reflect an international view rather than a narrow, Australian head-office perspective managers must have global vision Think Global, Act Local task of transforming domestic managers into international managers is a strategic HRM problem facing many multinationals

The choice facing the multinational firm is clear: either increase its global character in order to compete worldwide or give up and disappear

Globalising the HR Function

Firms compete globally for talented staff Firms at all levels (SMEs as wellas large organisations) are becoming more global One size in HR function, does not fit all differentiation Literature on IHRM has focussed on managing expatriates Issues in managing people globally fall into two areas:

Comparative HRM how people are managed vdifferently in different countries International HRM how different organisations manage their people over national borders

Factors affecting IHRM in organisations

Degree to which the affiliate is embedded in a local environment Strength of flow of resources such as capital, information & people between parent & affiliate Culture of the home country & business culture of that company Nature of competition & organisational competitive strategy Legislation in home & affiliate countries

Model of global HR

Org driver
Efficiency orientation Global Provision Information exchange

HR enablers HR processes
HR Affordability Evaluation/ contracting of HR Talent Management Central HR philosophy Employee branding

Org outcomes

Organisational capability

Core business process

Localisation of decision making Established HR knowledge transfer

International assignments & expats

Managing international workforce

Summary

Role of HR function in global organisations

Added value of the HR function lies in ability to manage the delicate between overall co-ordinated systems and sensivity to local cultural differences

Difference between international HRM and global HRM

IHRM is about managing an international workforce, ie expatriates, frequent commuters, cross cultural team members Global HRM is not just about staff but about managing all HRM activities,wherever they are

International HR & Workforce Planning (CCH)

Increasing size of organisations, diversification, deregulation of industries and greater emphasis on exports leads to a more complex external environment & greater uncertainty Workforce planning interventions, such as recruitment, training and development, remuneration policy, performance assessment and talent identification, are modified to take differences into account

International HR or Line Managers additional requirements to a domestic manager

a need to understand the environments of both the domestic and overseas country, which may affect the use and introduction time of management practices, etc a need to integrate the organisation smoothly into the overseas environment, which may require extra use of skills such as selling, negotiation and diplomacy; extra general management functions, as the overseas division is likely to be smaller than the ``parent'' one liaison between head office concerns and concerns of the overseas subsidiary management without the support systems and networking systems available in the domestic organisations coping with a wide range of cross-cultural differences.

Additional training & development programs

Training and development programs for managers who will be appointed to overseas facilities should take international issues into account, by covering areas such as the following: foreign languages basic understanding of business practices, competitive conditions and market operations in other countries general information about other countries, such as social structure, culture, customs, non-verbal communication, geography and economic issues.