GLOBALISATION, EUROPEANISATION AND INTERNATIONAL HRM STRATEGIES

Question 1

What is a Multinational Corporation?

Answer 1

Company operating in several countries but managed from one (home) country

Question 2

What are the four distinct approaches to IHRM?

Answer 2

1. Ethnocentric
2. Polycentric
3. Regiocentric
4. Geocentric

Question 3

Ethnocentric (4)

Answer 3

1. Home country practice prevails
2. Place people from home country in key positions at home and abroad
3. Company not aware of foreign talent
4. Struggles to communicate across countries

Question 4

Ethnocentric - Aspects of the Enterprise

1. Complexity of organization
2. Authority/ decision making
3. Evaluation and control
4. Rewards; punishment; incentives

Answer 4

1. Complex in home country; simple in subsidiaries
2. High in headquarters
3. Home standards applied for persons and performance
4. High in headquarters; low in subsidiaries

Question 5

Polycentric (4)

Answer 5

1. Cultures of different countries vary
2. As long as work is profitable, no need to intervene
3. Local nationals hold key positions
4. Local managers have power over their area

Question 6

Polycentric - Aspects of the Enterprise

1. Complexity of organization
2. Authority/ decision making
3. Evaluation and control
4. Rewards; punishment; incentives

Answer 6

1. Varied and independent
2. Relatively low in headquarters
3. Determined locally
4. Wide variation; can be high or low rewards for subsidiary performance

Question 7

Regiocentric (3)

Answer 7

1. Advantages to using regional managers - train and develop local, regional individuals
2. Strong connection across regions but, weak connections to separate regions and HQ
3. Autonomy among regions

Question 8

Regiocentric - Aspects of the Enterprise

1. Complexity of organization
2. Authority/ decision making
3. Evaluation and control
4. Rewards; punishment; incentives

Answer 8

1. Highly interdependent on regional basis
2. High regional headquarters and/or high collaboration among subsidiaries
3. Determined regionally
4. Rewards for contribution to regional objectives

Question 9

Geocentric (4)

Answer 9

1. Truly multinational firm
2. Headquarters and subsidiaries see each as part of single entity
3. Optimize resource allocation on global basis
4. Good flow of information

Question 10

Geocentric - Aspects of the Enterprise

1. Complexity of organization
2. Authority/ decision making
3. Evaluation and control
4. Rewards; punishment; incentives

Answer 10

1. Increasingly complex and highly interdependent on a worldwide basis
2. Collaboration of HQ and subsidiaries around the world
3. Standards which are universal and local
4. Rewards to international and local executives for reaching local and worldwide objectives

Question 11

Evolution of an MNC

Answer 11

• Spectrum of attitudes in MNC’s

- Company can change and evolve

Question 12

Specific approaches may offer strategic importance

Answer 12

1. Targeted advice
2. Superior service
3. Quicker and more efficient interactions

Question 13

Globalization (3)

Answer 13

Organizations gain international influence and/or operate on global scale

Transformation in social relations and transaction

“transcontinental or interregional flows and networks of activity, interaction and power” - Held & McGrew

Question 14

According to Held & McGrew, globalization occurs when:

Answer 14

1. Expansion of social and economic actors
2. Greater Interconnectedness
3. Quicker Global Interactions
4. Greater Impacts

Question 15

Three fields of thought on globalization

Answer 15

1. Hyperglobalist
2. Skeptical
3. Transformationalist

Question 16

The Hyperglobalist

Answer 16

View that the world is transitioning into a de-nationalized, integrated
global economy, both qualitatively and quantitatively.

Question 17

A Hyperglobalist would most likely take a ________ approach to HRM

Answer 17

Geocentric

Question 18

Hyperglobalist HRM Strategies: (4)

Answer 18

Most efficient and effective strategies in every location

1. Hire best people for job irrespective of nationality
2. Top management has international experience and contacts
3. Clear performance standards across company

Question 19

Geocentric Approach and

Hyperglobalists Disadvantages and Challenges (3)

Answer 19

1. A constant commitment of
   resources and time to keep the system functional.
2. Constantly and consistently
   having good people in key
   positions across the company is difficult.
3. Always evolving and may be a drain on the workforce.

Question 20

Geocentric Approach and

Hyperglobalists Advantages

Answer 20

1. Strong Company Culture
2. Expertise of each manager and employee can be used to
   accomplish MNC’s goals
3. Less resentment as feeling of
   fairness increases
4. Shared learning across company
5. Effective flows of information

Question 21

Skeptic

Answer 21

View that globalization today is exaggerated (see 1890-1914); dismisses idea of a truly global, interdependent economy.

The world is divided into economic and political blocs; at best, a regiocentric world

Question 22

A sceptic would most likely take an _________ or

possibly a ______ HRM approach.

Answer 22

ethnocentric or polycentric

Question 23

Skeptic HRM strategies (2)

Answer 23

1. Use same HR practices in subsidiary as headquarters
   (ethnocentric) or
2. Adapt HR practices to fit country (polycentric)

Question 24

Polycentric Approach and Sceptics Disadvantages and Challenges: (4)

Answer 24

1. May miss the signs of issues,
   that will need to get larger and
   more complicated before they
   are noticed
2. Weak integration of company
3. Lack of company culture
4. Low accountability from subsidiaries towards
   headquarters

Question 25

Polycentric Approach and Sceptics Advantages (5)

Answer 25

1. Cheaper to hire locals 2. Increase in morale 3. Local managers may know best 4. Enhanced productivity 5. Less cultural tension

Question 26

Ethnocentric Approach | and Sceptics Disadvantages and Challenges: (5)

Answer 26

``` 1. May not have best people in area 2. Cultural insensitivity 3. Lack of connections to local area 4. Workplace tensions 5. Easy to misinterpret or misguide people ```

Question 27

Ethnocentric Approach | and Sceptics Advantages: (4)

Answer 27

1. A new company may not have reliable, local people to trust yet, so they place trusted individuals in place of key leadership roles 2. Single parent company culture 3. Headquarters has control 4. No need for well developed international labor market

Question 28

Transformationalist

Answer 28

View that globalization’s outcomes and processes are unclear and undetermined Transformationalists argue that the flow of culture is a two-way exchange

Question 29

A Transformationalist would likely take the ______ approach to HRM

Answer 29

Regiocentric

Question 30

Transformatinalist HRM strategies: (2)

Answer 30

Develop practices that best fit region Managers selected from different countries within the defined region

Question 31

Transformationalist and Regiocentric Approach | Disadvantages and Challenges:

Answer 31

1. Managers from regions may not understand viewpoint of headquarters 2. Communication barriers between regions 3. Weak company culture from one region to the next 4. Discrepancy between regional objectives and MNC’s global objectives

Question 32

Transformationalist and Regiocentric Approach | Advantages

Answer 32

1. Culture fit within regions 2. Lower costs to hire people from regional area 3. Good communication across regions 4. May be easier and more profitable to have integrated region