Note for IBA 350 with Professor Turner at UA-Intro World Business (9)
Note for IBA 350 with Professor Turner at UA-Intro World Business (9)
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This 4 page Class Notes was uploaded by an elite notetaker on Friday February 6, 2015. The Class Notes belongs to a course at University of Alabama - Tuscaloosa taught by a professor in Fall. Since its upload, it has received 18 views.
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Date Created: 02/06/15
CHAPTER NINETEEN REVIEW MATERIALS The effectiveness of every organization including global international companies known as Q companies depends to a great extent on how well its human resources people are used Obviously it also depends on other factors as well such as how well production facilities are utilized and how well financial resources are planned and used etc Yet the Human Resources Department HR Dept is often not fully included in some companies in the globalization process HR can definitely add value to the process but some companies feel that HR brings policies and procedures to the process or the HR group is so quotdomestic marketquot oriented that they are excluded to the internationalization activities This is a tragedy indeed HR is without a doubt in my mind one of the main functions of any company especially an international or global company Management of people the human resources in a company is a quotsharedquot responsibility 1 The daytoday supervision of people on the job is the dug of the operatingmanagers who must integrate the human financial and physical resources into an efficient and profitable production and marketing activity 2 The formulation of policies and procedures for 1 Estimation of work force needs 2 Recruitment and selection 3 Training and development 4 Motivation 5 Compensation 6 Discipline and 7 Emplovment termination is the responsibilitv of the HR mmement sometimes referred to as the quotpersonnelquot dept Finding the right person to manage in an quotinternationalquot environment is often very difficult as it is more difficult than managing in a pure quotdomesticquot environment An International assignment must be filled by someone who can understand cultures and who is interested in that and it is helpful if they understand and speak the language An Expatriate is a person living outside his or her country of citizenship A quotGlobal Mindsetquot is a mindset that combines an openness to and an awareness of diversity across markets and cultures with a propensity and ability to synthesize across this diversity Women are today becoming expatriates but lag far behind men in this capacity Indeed over the years International Companies have been reluctant to send women abroad for many reasons including fear of hostilities etc etc Women however have been demonstrating a keen ability to adapt quickly to different cultures learn languages etc So more and more women are becoming expatriates with excellent success rates Today nearly M of expatriates from the USA are women vs less than 10 in the early 199039s Today it is rather easy to find both women and men to take overseas assignments because in general benefits and salaries are enhanced Competition for expatriate assignments is very strong Knowing a second language the language of the country that requires a new manager will definitely help a person get the job In other wordsI or people wanting international iobs speakinq a foreiqn Ianquaqe will help land interviews The International Human Resource Management Approach MUST be along the same lines as management uses when determining the quotcorrect competitive strategyquot eg home replication multidomestic global or transnational however it is further refined to follow one of the following HRM approaches 1 Ethnocentric Hiring and promoting employees on the basis of parent company s home country frame of reference eg characterized by lowpressures for cost reduction and low pressures for local responsiveness so that most decisions are made at headguarters Therefore most of the expats are quothome country nationalsquot or quotparent company nationals PCN39s which in our case means they will come from the USA Often these people have a hard time adapting to the foreign culture etc Home Country Nationals PCN s are often hired for an international assignment because ithere are no suitable host country nationals available L home country nationals are being groomed for IC Headquarters jobs and amp C Headquarters wants one of its nationals in the host country 2 Polycentric Hiring and promoting employees on the basis of the specific local context in which the subsidiary affiliate operates which implies the primary strategic orientation is quotmultidomesticquot meaning low pressures for cost reduction but high pressures for local responsiveness In this case companies tend to hire quothost country nationals HCN squot a citizen of the nation in which the subsidiary is operating while maintaining the PCN39s for home office managementWhen host country nationals are employed they are familiar with local customs culture and the language 3 Regiocentric Hiring and promoting employees on the basis of the specific regional context of the subsidiary Often companies which are not so dependent on major local responsiveness but have a slightly higher need for cost reductions will hire HCN39s or even TCN39s Third Country Nationals people who are neither from the parent company or host country but rather another country entirely 4 Geocentric Hiring and promoting employees on the basis of ability and experience without considering race or citizenship and usually this implies a high pressure for both cost responsiveness and local responsiveness eg transnational companies and global companies Indeed true transnational and global companies hire many TCN s as they are looking for the llbest person to take a job in a particular country For sure whether the expatriate is a PCN a HCN or a TCN l39family adjustmentquot is very critical to success of the individual Nine of ten expatriate failures are family related Unhappy spouses seems to be the main reason for an expat failure Hence IC s try to test families and work with families to be sure they can cope with an international assignment before they are sent abroad One reason for sending an executive abroad is to give them international experience and training in order to prepare them for higher level positions back in the home office For sure whoever is sent as an expatriate must be a good strong candidate for ongoing executive growth within a company Do not send problem individuals to run an international operation One problem with hiring local managers in a host country is that they do not fully understand the culture of the home country of the company and simply do not fully understand the company policies and practices Hiring personnel who are third country nationals TCN39s can be advantageous especially in developing countries because they may accept lower wages and benefits than will employees from the home country and they may come from a culture similar to that of the host country Developing countries with developing economies are desperate to have trained localmanagers From a HRM standpoint this is the main problem in developing economies The same general criteria for selecting home country employees are used to select host country nationals Training of host country nationals is often different because they may not know the company well or their country may not have the same level of education in business as the home country national True Disadvantages of using employees from the home or host countries can sometimes be avoided by sending third country nationals TCN s to fill management positions Note As international companies grow in numbers and as they increasingly take the quotgeocentricquot view it is certain that more third country nationals TCN s in managerial roles Note If a company feels that it will no doubt send parent country nationals abroad it will frequently encourage them to study the language and culture of the country to which they are going This is critical Indeed they will often be sent to American Business Schools for short courses Note Manv international companies lC39s give international status to both Home Country and Third Countrv Nationals meaning that they will receive the same perquisites and compensation packages for the same iob in other words the USA person does not have the advantagethis is a great step forward for IC39s Language Trap A situation in which a person doing international business can speak only his or her home language This is often the case of American Expatriates English has become the quotlingua franca of the world It is basically everybody s second language In China alone up to 15 of the population are learning English Chinese is definitely a new quothotquot language to learn for great IC opportunities Repatriation When the expat returns to his or her home country Often there exists quotreverse culture shockquot because of being away for some time and the fact that they used autonomy more while abroad etc Indeed planning for an expat s repatriation should start quotwell before the overseas assignment even beginsquot m Expats do get many incentives for living abroad including housing allowances educational allowances annual paid for home leaves etc etc but the base salary is usually equated to the base salary of host country managers PERKS International executive compensation packages often have l39perksquot which are quotsymbols of rank in the company hierarchyquot These may include a company house paid for by the company country club membership etc etc These often make the standard of living much enhanced
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