Transcript Global Human Resource Management

Global Human Resource Management
(HRM)
Human Resource Management
 Human resource management refers to the activities an organization carries out to
utilize its human resource effectively.
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Staffing Policy
Management training and development
Performance appraisal
Compensation policy
Labor relations
 An expatriate manager is a citizen of one country who is working abroad in one of the
firm’s subsidiaries.
 Coca-Cola sees the HRM function as a vital link in the implementation of its strategic
goal of thinking globally and acting locally.
Human Resource Management
 Four strategies pursued by international business
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Multidomestic firms try to create value by emphasizing local responsiveness
International firms try to create value by transferring core competencies overseas
Global firms try to create value by realizing experience curve and location economies.
Transnational firms try to create value by doing all these things simultatneously.
 “Think globally, act locally” is a good definition of a transnational strategy
Human Resource Management
 Staffing Policy is concerned with the selection of employees for particular jobs.
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Select individuals who have the skills required to do particular jobs.
Develop and promote corporate culture(organization’s norms and value system)
Transnational and global firms need strong unifying corporate culture.
International firms have lower needs and multidomestic firms have lowest needs.
 GE which is positioned toward the transnational end of the strategic spectrum is not
just concerned with hiring people who have the skills required for performing particular
jobs; it also wants to hire individuals whose behavioral styles, beliefs and value
systems are consistent with those of GE.
Three types of staffing policy in international business
 The ethnocentric staffing policy is one in which all key management positions are
filled by parent country nationals(inernational firms e.g. P&G, Matsushita, Toyota &
Philips).
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A lack of qualified individuals in the host country to fill senior management position
The best way to maintain a unified corporate culure
The best way to create value by transferring core competencies is to transfer parent company
nationals who have knowledge of that competency to the foreign operation.
 This limits advancement opportunities for host country nationals and this can lead to
resentment, lower productivity and increased turnover.
 The firms fail to understand host country cultural differences that require different
approaches to marketing and management.
Three types of staffing policy in international business
 The polycentric staffing policy requires host-country nationals to be recruited to
manage subsidiaries, while parent-country nationals occupy key positions at corporate
headquarters(multidomestic firms).
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The firm is less likely to suffer from cultural myopia. Host-country managers are unlikely to
make the mistakes arising from cultural misunderstandings that expatriate managers are
vulnerable to .
It is less expensive to implement ; using them can reduce the costs of value creation.
 Host-country nationals have limited opportunities to gain experience outside their own
country.
 Language barriers, national loyalties and a range of cultural differences may isolate the
headquarters staff from the various foreign subsidiaries.
Three types of staffing policy in international business
 The geocentric staffing policy seeks the best people for key jobs through the
organization, regardless of nationals(global and transnational firms).
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The best use of human resources.
This enables the firm to build a cadre of international executives who feel at home working in
a number of different cultures. The creation of such a cadre may be a critical first step toward
building a strong unifying corporate culture and an informal management network. Firms
pursuing a geocentric staffing policy may be better able to create value from the pursuit of
experience curve and location economies and from the multidirectional transfer of core
competencies.
 Immigration laws require extensive documentation.
 This policy can be very expensive to implement ; increase training cost, relocation cost
and the need for a compensation structure.