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INBS 250

by: Maria Notetaker
Maria Notetaker

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Chapter 19 Notes
Introduction to International Business
Class Notes
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This 3 page Class Notes was uploaded by Maria Notetaker on Thursday September 15, 2016. The Class Notes belongs to INBS 250 at Montclair State University taught by Nahra in Spring 2015. Since its upload, it has received 12 views. For similar materials see Introduction to International Business in International Business at Montclair State University.

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Date Created: 09/15/16
Ch. 19 - Global Human Resource Management Friday, April 24, 2015 10:04 AM Human resource management: activities an organization carries out to utilize its human resources effectively   Determining human resource strategy  Staffing (hiring employees domestically and globally)  Evaluate performance of employees (domestically and overseas)  Management development ­ training your country managers overseas as well as mid and  upper level managers domestically  Compensation ­ *most difficult* ­ how expensive it is to hire overseas  Labor relations ­ labor laws that change from market to market (responsibility of HR)  Problems: o Culture o Legal systems o Economic systems o Political systems  Expatriate managers: managers we send from HQ to work in foreign market (citizens of one country working abroad)  o Different type of training o Most expensive o When we bring them back to HQ, where do we put them/what do we do with  them?  Staffing policy: concerned with the selection of employees who have the skills required  to perform a particular job  LOCAL: an employee who is a citizen of the foreign country you are entering and doing  business in   Third country national: employees from all different nationalities that are available for  HR in the foreign country; could be all types of other citizenships   Ethnocentric approach: believe their approach is the best approach. Control is the main  concept; want to control process and market as much as possible; send their own HQ  managers to do the job.  *MOST EXPENSIVE*  Polycentric approach: when parent company recognizes they don't know much about  foreign market and they hire nationals (locals) for positions   Geocentric approach: send managers from HQ if they have unique skills we cannot find in the foreign market; but also open to hiring local managers and take advantage of their  expertise and understanding of culture and consumer in that market.   Expatriate failure: premature return of an expatriate manager to the home country  Expat compensation costs:  o Base salary o Foreign service premium: money given by company for the inconvenience of  working in a foreign country o Cost of living allowances: housing, spouse, hardship, travel (to live at the same  standard you are living in the US  o Fringe benefits (medical, retirement benefits plus risk insurance) (regular/standard benefits)   o Tax differentials (company pays the taxes you have to pay in the foreign country  ­­ you only have to pay taxes in the US)   Main reasons for expat failure: (US) o Spouse has hard time adjusting  o Manager has hard time adjusting to new country/culture o Other family (most likely kids) related reasons  o Manager's personal or emotional maturity  o Manager's inability to cope with larger overseas responsibilities  Main reason for expat failure: (European) o Inability of manager's spouse to adjust  Main reason for expat failure: (Japanese) o Inability to cope with larger overseas responsibility o Difficulties with new environment o Personal or emotional problems o A lack of technical competence o Inability of spouse to adjust    How can firms reduce expatriate failure? 4 dimensions that predict expat success:  1 Self­orientation: character of manager; how to prepare them mentally and emotionally for  that venture 2 Others orientation: how they interact with people from different cultures 3 Perceptual ability: their perceptions; the skills that they have (perception skills ­ paying  attention to other people in meetings so you can react to situations) 4 Cultural toughness: has a character that can adapt to new environment; flexibility in dealing with pressures in new environments    Expat specific skills:  Technical competence: skills, know­how, expertise in their own industry  Adaptiveness: the character they have; flexibility in adjusting and adapting to new  environment (taking morning routine away from you)  Leadership ability/Local acceptance: leadership skills    Locals aren't paid the same as expats (company­paid costs); just base salary and pension  benefits  o Nationalism o Management development o Employee morale o Expatriate failure rates   Training can reduce expat failure (prepare them for the new environment / eliminate  culture shock)  o Cultural training o Language training o Practical training   How should expats be paid? o Base salary o Foreign service premium o Various allowances o Tax differentials o Benefits                     


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