Managing
Human Resources
Bohlander  Snell  Sherman
Chapter 16
International
Human Resources
Management
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
16-1
Learning Objectives
Identify the types of organizational forms used for
competing internationally.
Explain how domestic and international HRM
differ.
Discuss the staffing process for individuals
working internationally.
Identify the unique training needs for international
assignees.
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Learning Objectives, cont.
Reconcile the difficulties of home-country and
host-country performance appraisals.
Identify the characteristics of a good international
compensation plan.
Explain the major differences between U.S. and
European labor relations.
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Presentation Slide 16-1
16-1
Increasing Importance of Global
Human Resource Understanding
International Mergers
and Acquisitions
Foreign Human
Resources
Importance of
Global Human
Resources
Management
Global
Competition
Market Access
Opportunities
SOURCE: Jagdish N. Sheth and Abdolreza S. Eshghi, Global Human Resources Perspectives (Cincinnati: South-Western, 1989), vii.
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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16-2
Presentation Slide 16-2
Types of Organizations
GLOBAL
High
Views the world as a single
market; operations are
controlled centrally from the
corporate office.
TRANSNATIONAL
Specialized facilities permit local
responsiveness; complex
coordination mechanisms
provide global integration.
GLOBAL
EFFICIENCY
Low
INTERNATIONAL
Uses existing capabilioties to
expand into foreign markets.
Low
MULTINATIONAL
Several subsidiaries operating
as stand-alone business units in
multiple countries
LOCAL RESPONSIVENESS
High
Source: Adapted from Peter J. Dowling, Denice E. Welch, and Randall S. Schuler, International Dimensions of Human Resource Management, 3e (South-Western, 1999).
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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International Corporation
Domestic firm that uses its existing
capabilities to move into overseas markets
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Multinational Corporation
(MNC)
Firm with independent business units
operating in multiple countries
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Global Corporation
Firm that has integrated worldwide operations
through a centralized home office
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Transnational Corporation
Firm that attempts to balance local
responsiveness and global scale via a
network of specialized operating units
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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The Top 50 Global Firms
COMPANY
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
General Motors
DaimlerChrysler
Ford Motor
Wal-Mart Stores
Mitsui
Itochu
Mitsubishi
Exxon
General Electric
Toyota Motor
Royal Dutch/Shell
Marubeni
Sumitomo
IBM
Axa
Citigroup
Volkswagen
Nipon T&T
BP Amoco
Nissho Iwai
Nippon Life Insurance
Siemens
Allianz
Hitachi
U.S.Postal Service
SALES (1998)
U.S.
Germany
U.S.
U.S.
Japan
Japan
Japan
U.S.
U.S.
Japan
U.K./Neth.
Japan
Japan
U.S.
France
U.S.
Germany
Japan
U.K.
Japan
Japan
Germany
Germany
Japan
U.S.
161,315
154,615
144,418
139,208
109,373
108,749
107,184
100,697
100,469
99,740
93,692
93,568
89,020
81,667
78,729
76,431
76,306
76,118
68,304
67,741
66,299
66,037
64,874
62,409
60,072
COMPANY
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
Matsushita
Philip Morris
Ing Group
Boeing
AT&T
Sony
Metro
Nissan Motor
Fiat
Bank of America
Nestle
Credit Suisse
Honda Motor
Assicurazioni Generali
Mobil
Hewlett-Packard
Deutsche Bank
Unilever
State Farm Insurance
Dai-Ichi Insurance
Veba Group
HSBC Holdings
Toshiba
Renault
Sears Roebuck
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
SALES (1998)
Japan
U.S.
Netherlands
U.S.
U.S.
Japan
Germany
Japan
Italy
U.S.
Switzerland
Switzerland
Japan
Italy
U.S.
U.S.
Germany
U.K./Neth.
U.S.
Japan
Germany
U.K.
Japan
France
U.S.
59,771
57,813
56,468
56,154
53,588
53,156
52,126
51,478
50,999
50,777
49,504
49,143
48,747
48,478
47,678
47,061
45,165
44,908
44,620
44,485
43,407
43,338
41,471
41,353
41,332
16-10
HRM Issues of a Unified Europe
Staffing
Training and
Development
Productivity
Labor Relations
Compensation
and Benefits
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
16-11
Cultural Environment
Language, religion, values, attitudes,
education, social organization, technology,
politics, and laws of a country
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Host Country
Country in which an international
corporation operates
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Presentation Slide 16-3
Cultural
Environment
of
International
Business
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Presentation Slide 16-4
Advantages of Different Sources
for Overseas Managers
HOST
COUNTRY
 Less Cost
 Preference of
host-country
government
 Knowledge
of
environment
 Language
facility
HOME
COUNTRY
THIRD
COUNTRY
 Talent available  Broad
within company
experience
 Greater control  International
outlook
 Company
experience
 Multilingualism
 Mobility
 Experience
provided to
corporate
executives
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Expatriates,
or Home-Country Nationals
Employees from the home country who
are sent on international assignment
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Host-Country Nationals
Natives of the host country
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Third-Country Nationals
Natives of a country other than the
home country or the host country
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Changes in International Staffing
Over Time
Emphasis in Staffing
Host Country
Nationals
Expatriates
Time
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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International Staffing
Recruitment
Key Issues
Selection
Training and
Development
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Guest Workers
Foreign workers invited in
to perform needed labor
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Work Permit,
or Work Certificate
Government document granting a foreign
individual the right to seek employment
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Expatriate Selection Criteria
International
experience
Interpersonal
Professional
skills
experience
Technical
competence
Country
experience
Family
flexibility
Language
skills
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Core Skills
Skills considered critical in an
employee’s success abroad
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Augmented Skills
Skills helpful in facilitating the efforts
of expatriate managers
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Skills of Expatriate Managers
Core Skills
Experience
Decision-making
Resourcefulness
Adaptability
Cultural sensitivity
Team building
Maturity
Augmented Skills
Experience
Decision-making
Resourcefulness
Adaptability
Cultural sensitivity
Team building
Maturity
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Failure Rate
Percentage of expatriates who
do not perform satisfactorily
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Why Do Expatriates Fail?
•
•
•
•
•
•
•
•
Family adjustment
Lifestyle issues
Work adjustment
Bad selection
Poor performance
Other opportunities arise
Business reasons
Repatriation issues
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Transnational Teams
Teams composed of members of multiple
nationalities working on projects
that span multiple countries
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Global Managers
Seize Strategic
Opportunities
Manage
Decentralized
Operations
Aware of Global
Issues
Sensitive to
Diversity Issues
Skilled in Building
Communities
Interpersonal
Competence
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Global Manager
Manager equipped to run a global business
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Content of Training Programs
Language
Training
Key Elements
Needed to
Prepare
Employees to
Work Overseas
Cultural Training
Career
Development and
Mentoring
Personal and
Family Life
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Repatriation
Process of employee transition home
from an international assignment
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Culture Shock
Perceptual stress experienced
by people who settle overseas
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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International Performance Appraisals
Host-Country
Evaluations
Home-Country
Evaluations
Augmenting Job
Duties
Key Issues
Individual Learning
Organizational
Learning
Providing
Feedback
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Presentation Slide 16-5
Performance Evaluation
Home-Country
Evaluation
Host-Country
Evaluation
GLOBAL
PERSPECTIVE
LOCAL
PERSPECTIVE
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Presentation Slide 16-6
Effective Compensation of
Expatriate Managers
The compensation program must:
 Provide an incentive to leave the U.S.
 Maintain a U.S. standard of living.
 Facilitate reentry into the U.S.
 Provide for the education of children.
 Maintain relationships with family, friends,
and business associates.
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Balance-Sheet Approach
Compensation system designed
to match the purchasing power
of a person’s home country
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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Presentation Slide 16-7
Hourly Wages
in Different
Countries
Source: Department of Labor (Hourly
compensation costs in U.S. dollars for
production workers in manufacturing).
Country
Germany
Belgium
Japan
Sweden
U.S.
France
Italy
Canada
Australia
Britain
Spain
Israel
Korea
Taiwan
Hong Kong
Mexico
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
$/Hour
28.28
22.82
19.37
18.81
18.24
17.97
16.74
16.55
16.00
15.47
12.16
12.05
7.22
5.89
5.42
1.75
16-39
Codetermination
Representation of labor on the board
of directors of a company
Managing Human Resources, 12e, by Bohlander/Snell/Sherman © 2001 South-Western/Thomson Learning
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