HRM CH16--Managing Human Resources Globally

Summary

This lecture covers the final chapter of KN and colleagues' 'Fundamentals of Human Resource Management,' focusing on managing global human resources. The lesson explains the importance of global HR even for those not working abroad, addressing concepts like outsourcing, offshoring, expatriates, and the impact of cultural differences. Key topics include transnational HR systems, global compensation strategies, expatriate success factors, and the challenges of repatriation. The lecture emphasizes the need for flexibility, cultural sensitivity, and strategic planning in managing a global workforce.

Takeaways

• 🌍 The marketplace is global, and organizations expand by exporting, building facilities, and forming alliances in other countries.
• 👩‍💼 HR managers need to manage employees internationally, even if they themselves don't plan on working abroad.
• 🏭 Outsourcing involves hiring other companies for services, often moving those jobs overseas, while offshoring means moving production to a country with lower costs.
• 🌎 Global organizations need a transnational HR system, balancing uniformity with flexibility, considering different cultural needs and perspectives.
• 🍔 Companies like McDonald’s adjust their global operations to local tastes and needs, offering a balance between uniformity and flexibility in product and HR systems.
• 🤝 Understanding cultural dimensions, such as individualism vs collectivism and uncertainty avoidance, is crucial for global HR management.
• 🗣️ Managers handling global teams should possess knowledge of other cultures, foreign work experience, or speak multiple languages.
• 👨‍👩‍👧 Expatriates, or employees working in other countries, need strong content knowledge, communication skills, cultural sensitivity, and family support for success.
• 💼 Compensation in a global workforce is complex, involving considerations like tax rates, cost of living, and differences in pay structures across countries.
• 🏡 Repatriation, or returning expatriates to their home country, requires effective communication and validation of their overseas work and contributions.

Q & A

What is the importance of studying global human resource management even if one does not plan on working in another country?

Global human resource management is relevant because the marketplace is increasingly global. Even if someone does not plan on working abroad, they may have to manage employees who are based overseas, travel internationally, or relocate to their home country. This requires an understanding of global HR practices.

What is the difference between outsourcing and offshoring?

Outsourcing is when an organization hires another company to provide a product or service, and jobs may be moved overseas. Offshoring, however, occurs when an organization moves its production to another country while continuing to provide the product or service itself, typically to reduce production and labor costs.

What is a parent country, host country, and third country in the context of international business?

A parent country is where the organization's headquarters are located. A host country is where the organization operates outside of its parent country. A third country is any other country involved that is neither the parent nor the host, such as when employees from a third country are brought to work in the host country.

What is a transnational human resource management system?

A transnational human resource management system is a global HR system where decisions are made from a global perspective, incorporating managers from many countries to ensure a diversity of cultural perspectives in the decision-making process. It requires balancing uniformity and flexibility to meet the diverse needs of a global workforce.

How can cultural differences influence HR practices in global organizations?

Cultural differences can impact HR practices in various ways, such as influencing employees' needs, motivations, and expectations. For example, cultural norms may affect preferences for incentive pay, work hours, or vacation policies. HR systems need to be flexible to accommodate these differences while maintaining consistency across the organization.

What are Hofstede's cultural dimensions, and how do they impact HR management?

Hofstede's cultural dimensions include individualism vs. collectivism, power distance, uncertainty avoidance, masculinity vs. femininity, long-term vs. short-term orientation, and indulgence vs. restraint. These dimensions help HR managers understand cultural differences, which can influence motivation, leadership styles, and employee behavior, although they should be cautious not to stereotype employees based on cultural generalizations.

What factors should be considered when selecting expatriates for international assignments?

When selecting expatriates, it is important to consider their knowledge of other cultures, experience studying or working abroad, language skills, adaptability to new environments, and family support. Providing employees with information about cultural adjustment requirements allows them to decide if they are a good fit for the assignment.

How do political and legal systems in host countries impact HR management?

Political and legal systems in host countries affect HR management by influencing labor laws, employment standards, taxation, and employee rights. Understanding the local legal context is essential to ensure compliance and manage employees effectively. Host country nationals can provide valuable insight into how laws are practically applied.

What is the balance sheet approach in expatriate compensation, and why is it used?

The balance sheet approach is used to ensure that expatriates maintain the same standard of living in their host country as they did in their home country. It typically includes base salary, tax equalization allowances, benefits, and other allowances to offset higher costs of living or inconveniences associated with relocation.

What is repatriation, and what are the key considerations for preparing expatriates to return home?

Repatriation is the process of preparing expatriates to return home from a foreign assignment. Key considerations include communication (updating expatriates on changes that occurred while they were away) and validation (recognizing their contributions and the value they provided during their assignment). These help ensure a smooth transition back to their home country.