Managing a Global Workforce Flashcards
(21 cards)
Globalization
Globalization
The inevitable integration of markets, nation-states and technologies to a degree never witnessed before—in a way that is enabling individuals, corporations and nation-states to reach around the world farther, faster, deeper and cheaper than ever before and in a way that is enabling the world to reach into individuals, corporations and nation-states farther, faster, and deeper, cheaper than ever before.
technology has been the primary reason for this.
4 major areas that have been impacted:
Communications- internet + mobile tech
diversity- exposure to different ideas, cultures, methodologies, business partners
automation- AI, machine learning, etc
competition- has offered access to new markets, ideas, capital. Also some cons here as well
Pull Factors for Globalization + 3 examples
Global Strategy
They may have been “pulled” toward change through the promise of achieving greater organizational value through globalization.
- Strategic control- A multinational presence can give an organization greater control over its business (production, branding, sector consolidation, etc.).
- Government policies- National policies that promote economic expansion
- Trade agreements- These agreements can open markets and promote workforce mobility; they can also lower risks by enforcing laws, regulations, and treaties (for example, intellectual property protections).
offshoring
Global Strategy
form of outsourcing, is the practice of relocating processes or production to another country
Identity Alignment and Process Alignment Strategies
Global Strategy
Identity Alignment
Extent to which:
1. Diversity is embraced in management of people, products/services, and branding.
2. Differences among locations are embraced.
3. Product/service offerings and brand identity may be adjusted to accommodate local cultures.
Challenges: Unless corporate brand is well-established, localized offerings may dilute brand. Local approaches may diffuse core identity.
Example: Global fast-food chains offer localized menu options in addition to standard menu items.
Process Alignment
Extent to which underlying operations such as IT, finance, or HR integrate across locations.
Challenges: Businesses built through acquisitions often have separate processes; tendency is for each unit to operate independently and retain many of its original practices.
Example: Business where units have a common platform:
Single technology used in all locales.
Same business performance metrics in all locales.
Unified HR systems in place in all locales.
Push Factors for Globalization + 6 examples
Global Strategy
Organizations may have been “pushed” toward globalization in reaction to changes in the business environment.
- New markets- needed when domestic opportunities are exhausted
- cost pressures/competition- through offshoring labor or production
- Natural resources and talent supply- Sometimes it is more economical to relocate operations closer to necessary resources.
- Government policies- move due to burdensome laws (risk strategy from a PR perspective)
- Trade agreements- When foreign competitors gain access to domestic markets, local firms are compelled to expand their markets elsewhere.
- Globalized supply chain- Organizations might discover that following a client or customer overseas makes more business sense than maintaining domestic or existing production/facilities.
Perlmutter’s Four Multinational Corporation Orientations
Global Strategy
- Ethnocentric
-Headquarters maintains tight control over subsidiaries, who are expected to follow the strategic pattern, values, policies, and practices expressed by headquarters.
-There is “one best way.”
-Management will usually share a common ethnic background, different from the ethnic make-up of subsidiaries. - Polycentric
-Subsidiaries are allowed a large measure of independence as long as they are profitable.
-They may plot their own paths based on the business and cultural contexts of their countries.
-There are “many best ways.” - Regiocentric
-Subsidiaries are grouped into regions (such as Europe, North America, or Asia-Pacific).
-Strategic coordination is high within the region but not as high between the region and headquarters. - Geocentric
-Subsidiaries are neither satellites taking orders nor independent bodies setting their own course. Headquarters and subsidiaries are participants in a network, each contributing its unique expertise.
-There is essentially “a team way,” transcending national borders.
Global integration (GI)
Global Strategy
emphasizes consistency of approach, standardization of processes and products, and a common corporate culture across global operations. It allows organizations to take advantage of standard processes and economies of scale to achieve greater efficiency, which can lower costs of operation, create greater pricing flexibility, and increase profit.
4 ways to achieve Global integration (GI)
Global Strategy
- people- helps to ensure that decisions made locally reflect the global perspective. Assignees, employees who work outside their home countries, have traditionally played a significant role in carrying the message and focus from headquarters into the organization’s global locations.
- processes- Standardized processes, supported by technology that enables communication and transparency, support organizational control over strategic parts of the value chain.
- performance- Performance targets and rewards are defined from a global perspective. This creates greater control over organizational activity and also helps avoid potential conflicts between individual performance objectives—for example, sales targets in one region that will damage efforts in other regions.
- culture- Shared visions and values prepare members of the organization to make everyday decisions in a manner that is consistent with a global identity.
Local responsiveness (LR)
Global Strategy
emphasizes adapting to the needs of local markets and allows subsidiaries to develop unique products, structures, and systems. It can make organizations more flexible and agile—equipped to identify and capitalize quickly on local market opportunities, correct misalignments of products and services with customers’ desires and habits, and adjust to local regulations and business practices.
Strengths include:
- ability to repond to local customer needs or demands of local distribution
- efficiency gained from using local subsitutes
- ability to remain compliant with local laws
the choice of whether to emphasize global integration or local responsiveness is generally determined by a mix of 4 drivers
Global Strategy
- Market- Homogeneity of customer needs, Availability of global distribution networks, Opportunities for shared marketing
- Cost- Economies of scale, transportation costs, R&D costs
- Governmental- Trade policies, Technical standards/requirements, Regulatory climates
- Competitive- Extent and methods of globalization by industry competitors
4 strategic options for MNEs (multinational enterprieses)
Global Strategy
- Global- “One world, one product.”
-The company sees the world as one big market.
-Products are standardized or have minimal variation.
-Strategy is centralized at headquarters.
Example: A washing machine manufacturer sells nearly identical models worldwide. - International- “Home-grown strategy, global reach.”
-HQ develops products, services, and strategy.
-Foreign operations are mostly for distribution or support.
-Limited local adaptation.
-Example: A German robotics company exports its machines worldwide but keeps R&D and strategy in Germany. - Transnational- “Global efficiency + local responsiveness.”
-Operations are spread across countries based on strategic advantage.
-Products are globally developed but locally adapted.
-Best practices and knowledge are shared across borders.
-Example: A cosmetics brand tailors products to different regions and hires diverse talent globally. - Multidomestic- “Think local, act local.”
-Each country operates independently.
-Strategy and products are customized for each market.
-Knowledge is shared locally, not globally.
-Example: A candy company sells different products in each country, based on local tastes and preferences.
see 4-5 for helpful matrix
Briscoe, Schuler, and Tarique use an upstream/downstream metaphor to describe different ways to apply the combo of using Global integration (GI) & Local responsiveness (LR) strategies. what are upstream/downstream?
Global Strategy
upstream- decisions made at org HQ and apply to strategy/coordination, focusing on standardization of processes and integration of resources
Strategies for: Workforce alignment, Organizational development, Sharing of knowledge and experience
**downstream: ** decsions made at local level and aim at adapting strategic goals and plans to local realities—in other words, local responsiveness.
Strategies for: Agreements with local workforce groups, Adjustments to standard policies on working conditions to reflect local cultural practices, Adjustments based on local legal requirements
reasons for offshoring + challenges
Global Strategy
common reasons: lower costs, proximity to resources
favorable economic climate, financial incentives
other reasons: access to talent, round the calll shifts (like call centers), follow the sun (taking advantage of timezone differences) for no project interruption
risks: Cultural differences, Distance issues (for example, different time zones and getting remote teams to work together), High turnover rates, Problems in quality control, Technical degrees that do not reliably indicate actual technical skills, Language issues, Intellectual property loss, Impaired productivity due to political instability, Loss of reputation from unethical behavior or practices of local management.
onshoring
Global Strategy
a form of outsourcing, refers to the relocation of business processes or production to a lower-cost location inside the same country as the business. Sometimes called “home-shoring,” onshoring can also include the situation where businesses allow employees to work from home. Beyond the potential for lower operations costs, onshoring offers the added benefits of having local employees and avoiding many of the problems associated with distant offshoring scenarios.
Near-shoring
Global Strategy
a form of outsourcing, refers to a company contracting a part of its business processes or production to an external company located in a country that is relatively close (for example, within its own region). For example, U.K. businesses might near-shore to Eastern Europe, or U.S. businesses might near-shore to Mexico or Canada.
Considerations in near-shoring are that neighboring countries are often bound by similar financial and legal constraints or trade agreements that provide social and economic stability within a region. Countries that are closer in proximity are more likely to have shared cultural values and a similar mindset. And, the time difference is less and the cost to travel is reduced (compared to offshoring).
HR Due Diligence for Moving Work Abroad
Global Strategy
- Cost and quality
-Wage structure relative to other options
-Tax structure
-Real estate
-Infrastructure (examples include telecommunications networks, transportation, energy) - Sociopolitical environment
-Government receptivity, amount of regulation
-Ethical environment of political and business communities
-Quality of life
-Accessibility - Risk levels
-Political and labor unrest
-Natural disasters
-IT security
-Personal and property security, intellectual property rights
-Economic stability, including fluctuations in currency exchange value
-Regulatory stability
Talent pool
-Language and cultural differences
-Size of labor force with required skills
-Size of offshore sector and share of exports
-Availability of vendors for specific services, such as IT
2 approaches to global assignments
Managing Global Assignments
Strategic-Systematic
* Approach global assignments as long-term investments.
* Develop future executives with essential global perspectives and experiences to formulate and implement competitive strategies.
* Increase the effectiveness of critical coordination and control functions between and among the home office and foreign operations.
* Effectively disseminate information, technology, and values throughout the worldwide organization.
Tactical-Reactive
* Approach global assignments as short-term expenses.
* Focus on a quick-fix approach to a short-term problem in a foreign operation.
* Randomly and haphazardly perform some functions of assignments and focus attention as problems arise.
* Fail to systematically integrate the worldwide organization in terms of values, technology, products, and brand.
Briscoe, Schuler, and Tarique highlight a wide range of international work arrangements, including:
Managing Global Assignments
Long-term assignmentsTraditional expat roles (2+ years)
Short-term assignments 3–12 months, often project-based
Commuter assignments Employee travels regularly between countries
Rotational assignments Employee rotates between global locations
Virtual assignments Works remotely across borders without relocating
Self-initiated moves Employee chooses to work abroad independently
**Inpatriates **Foreign employees brought to HQ for a period
Contractors/freelancers Hired internationally for specific tasks
Globalists Spend their entire careers in international assignments, moving from one locale to another
Just-in-time expatriates Ad hoc or contract workers hired for a single assignment
international assignee, or IA
Managing Global Assignments
An employee who is being reassigned to an international jurisdiction
(vs “expat” now generally refers to anyone who is not a citizen of the country in which they reside and doesn’t intend to become a permanent resident).
Guidelines to Enhance Global Assignment Success
Managing Global Assignments
- View assignments as a process, not an activity.
- Recognize and consider all dimensions of the assignment experience (family, logistical, legal, cultural), including risks.
- Conduct thorough and professional assessments of candidates.
- Establish and maintain realistic expectations.
- Provide training.
- Provide appropriate health and safety support.
- Provide well-planned, ongoing training and support.
- Plan, prepare for, and support repatriation with the same care as expatriation. aka assimilation back to home country after the assignment has finsihed.
- Address problems quickly, thoroughly, and responsively.
Global Assignment Process + activities associated with each of the 5 steps
Managing Global Assignments
Stage 1: Assessment and Selection
-Develop the selection criteria.
-Involve the right people.
-Choose the best selection methods and tools.
-Complete the assessment/make a recommendation
Stage 2: Management and Assignee Decision
-Analysis of the costs and benefits of the assignment.
-Preparation of the assignment plan. Typically, the letter of assignment is a memorandum of understanding (MoU) stipulating the business aspects of the assignment as well as compensation, benefits, and local work rules.
-Candidate acceptance or rejection of the assignment offer
Stage 3: Pre-Departure Preparation
-Visas and work permits.
-Security briefings. (personal and family safety abroad and/or business aspects of security, including physical and intangible threats to the organization’s employees, assets, and intellectual property.)
-Cross-cultural counseling.
Stage 4: On Assignment
-4 distinct phases to new location adaptaion (happens on return to home country as well): Honeymoon, culture Shock, Adjustment, Mastery (aka biculturalism)
Stage 5: Completing the Assignment
-Repatriation involves reintegrating the employee back into the home country after an international assignment.
-Redeployment does not always involve repatriation. An assignee’s next assignment can be back in the home country, in a different global location, or in a new location or new position in the current host country.
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