Capitulo 11 - International HRM

Question 1

What is the position of HRM in Global Environment?

Answer 1

• Environment in which organizations operate is rapidly becoming a global one.
• Foreign countries can provide a business with new markets.
• Companies set up operations overseas because of lower labor costs.
• Technology makes it easier for companies to spread work around the globe.
• Global activities are simplified and encouraged by trade agreements among nations.
  o Increase and change demands on HRM.
  o Organizations need employees who understand customers and suppliers in foreign countries.
  o Organizations need to understand laws and customs that apply to employees in other countries.

Question 2

What are expatriates?

Answer 2

Employees assigned to work in another country.

Question 3

What are the levels of global participation?

Answer 3

Domestic
International - sets up one or a few facilities in one or a few foreign countries.
Multinational - builds facilities in a number of different countries in an effort to minimize production and distribution costs.
Global - chooses to locate a facility based on the ability to effectively, efficiently, and flexibly produce a product or service using cultural differences as an advantage.

All of them have in common: Employers in the Global Marketplace

Question 4

What are the factors affecting HRM in international markets?

Answer 4

Culture
Education
Economic systems
Political-legal systems

Question 5

What is Culture?

Answer 5

A community’s set of shared assumptions about how the world works and what ideals are worth striving for.
- Greatly affect country’s laws.
- Influences what people value, so it affects people’s economic systems and efforts to invest in education.
- Determines effectiveness HRM practices.

Question 6

Factors affecting HRM in international markets - Culture

What are Schein’s three levels of culture?

Answer 6

Surface manifestations, values, basic assumptions.

Question 7

Factors affecting HRM in international markets - Culture

What are Hofstede’s five dimensions of culture?

Answer 7

Individualism/collectivism
Power distance
Uncertainty avoidance
Masculinity/femininity
Long-term/short-term orientation

Question 8

Factors affecting HRM in international markets - Culture

What is individualism/collectivism?

Answer 8

Describes the strength of the relation between an individual and other individuals in the society.

Question 9

Factors affecting HRM in international markets - Culture

What is power distance?

Answer 9

Concerns the way the culture deals with unequal distribution of power and defined the amount of inequality that is normal.

Question 10

Factors affecting HRM in international markets - Culture

What is uncertainty avoidance?

Answer 10

Describes how cultures handle the fact that the future is unpredictable.

Question 11

Factors affecting HRM in international markets - Culture

What is masculinity/femininity?

Answer 11

The emphasis a culture places on practices or qualities that have traditionally been considered masculine or feminine.

Question 12

Factors affecting HRM in international markets - Culture

What is long-term/shrt-term orientation?

Answer 12

Suggests whether the focus of cultural values is on the future (long term) or the past and present (short term).

Question 13

Factors affecting HRM in international markets - Culture

What are the effects of Culture on Training Design?

Answer 13

Individualism - high individualism expects participation in exercises and questioning to be determined by status in the company or culture
Uncertainty avoidance - high uncertainty avoidance expects formal instructional environments. Less tolerance for impromptu style.
Masculinity - low masculinity values relationships with fellow trainees. Female trainers less likely to be resisted in low-masculinity cultures.
Power distance - high power distance expects trainer to be expert. Trainers expected to be authoritarian and controlling of session.
Time Orientation - long-term orientation will have trainees who are likely to accept development plans and assignments.

Question 14

Factors affecting HRM in international markets - Education

What are educational and skill levels?

Answer 14

• Education and skill levels of a country’s labor force affect how and extent to which companies want to operate there.
• In countries with poorly educated population, companies will limit their activities to low-skill, low-wage jobs.

Question 15

Factors affecting HRM in international markets - Economic Systems

What is economic system?

Answer 15

• In developed countries with great wealth, labor costs are relatively high, impacting compensation recruiting and selection decisions.
• Income tax differences between countries make pay structures more complicated when they cross national boundaries.

Question 16

Factors affecting HRM in international markets - Political-legal systems

What is political-legal system?

Answer 16

• Country’s laws often dictate requirements for HRM practices: training, compensation, hiring, firing, and layoffs.
• An organization that expands internationally must gain expertise in the host country’s legal requirements and ways of dealing with its legal system.
• Organizations will hire one or most host-country nationals to help in the process.

Question 17

Describe the Matching Model

Answer 17

The model introduced the concept of strategic HRM linked to the formation and implementation of strategic corporate and business objectives. The model stated that the HR system and the organisation structure should be managed in a way that is congruent with the organisational strategy.

The model is used to facilitate the achievement of the objectives of the organisation in terms of efficiency in productivity and profits. However, the model has less focus on the employees’ welfare, training and development. Employees are perceived as a resource that enables the business to meet its commercial targets and business strategy.

The company that holds this point of view develops employees to support overall business objectives and goals.

Question 18

Describe the Harvard Model

Answer 18

The map of the HRM territory described in the model is associated with soft HRM, as its primary focus is on outcomes for people, their well-being and organisational commitment.

The model defines the link between internal and external factors affecting HRM. The external factors outlined by the model include stakeholders’ interest and situational factors. The model recognises that there are a variety of stakeholders and assumes that the creation of HRM strategies will have to reflect the legitimate interests of different groups:
- Shareholders have a financial interest and want assurance that business will grow.
- Management want to ensure all the objectives goals are met.
- Employees are also stakeholders in the organisation and have their own interests.

The model focuses on gaining employees’ commitment, loyalty and their co-operation. Employees are encouraged through incentive schemes and through motivational methods to complete their tasks and to enable the organisation to grow and flourish.

Question 19

Compare the Matching Model with the Harvard Model

Answer 19

Compared with the Matching model, the Harvard model focuses on gaining employee commitment and co-operation to get win-win situation.
While the Matching model focuses on business strategies and goal achievements, the Harvard model believes that employees are the important assets for the organisation and therefore developing and motivating employees and improving employees’ loyalty is key for the business.

Question 20

What is the European Model of HRM

Answer 20

Focus the subject on stakeholders rather than shareholders and encompass a wide view of the topic.

Question 21

What does HR planning involve?

Answer 21

HR planning involves decisions about where and how many employees are needed for each international facility.

Decisions about where to locate include considerations such as cost and availability of qualified workers which must be weighed against financial and operational requirements.

Question 22

Wha is the criteria for selection of employees for foreign assignments?

Answer 22

1. Competency in employee’s area of expertise
2. Ability to communicate verbally and nonverbally in the foreign country
3. Flexibility, tolerance of ambiguity, and sensitivity to cultural differences
4. Motivation to succeed and enjoyment of challenges
5. Willingness to learn about the foreign country’s culture, language, and customs
6. Support from family members

Question 23

What is cross-cultural preparation?

Answer 23

-Training to prepare employees and their family members for an assignment in a foreign country.

-Covers all three phases of an international assignment:
1. Preparation for departure
2. The assignment itself
3. Preparation for the return home

Question 24

What are market pay structures?

Answer 24

Market pay structures may differ substantially across countries in terms of both pay levels and relative worth of jobs.

Question 25

What is the dilemma for global companies?

Answer 25

• Should pay levels and differences reflect what workers are used to in their own countries?
• Should pay levels and differences reflect the earnings of colleagues in the country of the facility, or earnings at the company headquarters?

Question 26

What must decisions about benefits take into account?

Answer 26

Compensation decisions affect a company‘s costs and ability to compete.

Challenge of competing with organizations in low-wage countries can be very difficult.

Decisions about benefits must take into account the laws of each country involved, as well as employees’ expectations and values in those countries.

Question 27

What are the two compensating expatriates?

Answer 27

• Balance sheet approach
• Going rate approach

Question 28

What is the balance sheet approach?

Answer 28

Adjusts manager’s compensation so that it gives the manager same standard of living as in the home country plus extra pay for inconvenience of locating overseas.

Involves an effort by the global organization to ensure that its expatriates are “made whole”.

Question 29

What is the going rate approach?

Answer 29

Based on local market rates.

• Relies on survey comparisons among:
  o Local nationals (HCNs)
  o Expatriates of same nationality  Expatriates of all nationalities
• Compensation based on the selected survey comparison
• Base pay and benefits may be supplemented by additional payments for low-pay countries

Question 30

What are the activities and practises of repatriation?

Answer 30

Pre-departure
During assignment
Upon return.

Question 31

What is pre-departure?

Answer 31

1. sponsored assigned
2. communication protocols established
3. web and media contacts for context
4. pre-departure training and orientation

Question 32

What is during assignment?

Answer 32

1. home leave
2. work related information exchanges
3. ongoing communication with sponsor
4. systematic pre-return orientation.

Question 33

What is upon return?

Answer 33

1. new assignment
2. organisational reconnection
3. assistance with non-work factors
4. rituals or ceremonies to share experience.