GLOBAL HUMAN RESOURCES MANAGEMENT

From TMT/CEO Perspective - HR Must Help Us To
• Increase profit
• Decrease cost
• Emphasize HR’s ROI, a.k.a. Value-adding deliverables
• Align HR’s Strategy and Administration efforts with the company’s goals & strategies
• Maintain & increase our competitive advantages
• Link your work to our strategic business plan

Increased market share
Tap into emerging markets
Better business climate
Lower production costs
Legal considerations
Better access to resources
Lack of growth in domestic markets
Technologically feasible
Closer to the customer
Competition
Diversity of business ideas and practices
Tax considerations

Olive oil for pizza
Silicone wafers at GF
GE turbines
Hospital X-ray readings
Lipton Tea – Dove Soap – Ben & Jerry
Hannaford Grocery
Nanotech Research
Caviar
Beer/Wine
Honda / Toyota
Mahogany
Coffee
Mediterranean countries
Dubai
Asia
India
British / Dutch
Belgium
Korea, Japan, UK
Russia
Germany/France
Japan
Honduras
Columbia

Capital Region Companies
Conducting Foreign Trade
GE
Albany International
Schenectady International
Port of Albany
SUNY-Poly
Comfortex
Ducommun
Turbines
Fine papers
Chemicals
Shipping
Semiconductors
Window Dressing
Aviation

• Trade barriers –
EU, NAFTA, 24/7, Internet
• Lines of business –
Conglomerates vs. single product/service
• Banking in the US
City-County-State – National – International
• Political changes
Russia – China – Egypt – Syria – Middle East

• Economic competence
• Production competence
• Politics – Fraud - Corruption
• Trade – Labor – Uneven playing field
• Capitalism vs. socialism
• Encouragement of creative thinking

• Re-thinking business strategies
• Re-thinking political support or blockages
• Examination of emerging markets – e.g. China, Asia, Gen Y,
Millennials
• New ideas – products – services (think Cloud computing, iPads, cell phone apps;)
• Re-evaluating what we think and teach in B-School
• Multi-culturalism

• Internal
• External

Technology - External
• Internet Social media E-everything e.g. books – film – travel tickets – payroll – on-line college degrees
• Tabulate everything – evaluate everything
• Smart apps, e.g. QR
• Labor reduction via technology = cost reduction (e.g. Panera's kiosks, self checkout lines at Home Depot/Price Chopper/Walmart)

• Easier to track performance
• Virtual management – Key focus for leadership
• Public availability of information
• Fraud & privacy/confidentiality concerns
• More work with less people at same pay = happy CFO

• Re-thinking all work processes
• Digitize everything
• Multi-media usage (LinkedIn, Facebook, Twitter)
• Matrix management
• Virtual management
• HRM - Delegating processes to line managers e.g. Payroll, benefits, recruiting
• Amazon.com (e.g. textbook purchases)

Global activities are simplified and encouraged by trade agreements among nations.
 Increase and change demands on leadership.
 Organizations need employees who understand customers and suppliers in foreign countries.
 Organizations need to understand laws and customs that apply to employees in other countries.

• Multinational company
– an organization that owns or controls production of goods or services in one or more countries other than their home country. Also referred to as an international corporation, a transnational corporation.
Examples: General Motors, McDonalds, Coca-Cola
• Global organization – chooses to locate a facility based on the ability to effectively, efficiently, and flexibly produce a product or service using cultural differences as an advantage.
• Expatriate—citizen of one country and lives and works in another country

Parent-country national
An employee who was born and works in the country in which an organization’s headquarters is located.
Ex. Yvonne (France) works for Air France (France) in Paris (France)
Host-country national
An employee who is a citizen of the country (other than parent country) in which an organization operates a facility.
Ex.
Nigel (Great Britain) works for General Motors (US) in Liverpool,
England

Third-country national
An employee who is a citizen of a country that is neither the parent country nor the host country of the employer.
Ex: Siegfried (Austrian) works for Rolls-Royce (English) in Athens
(Greece)
Ex-patriate
Native born employees of the parent company assigned to work in another country
Ex: Ken (US) is assigned by McDonalds to work in Monte Carlo
(France)

Transnational system:
• makes decisions from a global perspective
• includes managers from many countries
• based on ideas contributed by people representing a variety of cultures
• Decisions that are the outcome of a transnational system balance uniformity (fairness) with flexibility (accounting for cultural and legal differences).

Culture – a community’s set of shared assumptions about how the world works and what ideals are worth striving for.
• Is greatly affected by a country’s laws.
• Influences what people value, so it affects people’s economic systems and efforts to invest in education.
• determines effectiveness HRM practices.

• Organizations must prepare managers to recognize and handle cultural differences.
• Recruit leaders with knowledge of other cultures
• Provide training
• For expatriate assignments, organizations may require HRM to conduct an extensive selection process to identify individuals who can adapt to new environments.

• Companies with foreign operations locate in countries where they can find suitable employees – with the right and necessary KSAs – and with the capability to acquire those KSAs.
• Education and skill levels of a country’s labor force affect how and extent to which companies want to operate there.
• In countries with a poorly educated population, companies will limit their activities to low-skill, low-wage jobs.

• Economic systems provides many incentives or disincentives for developing the value of the labor force.
• In developed countries with great wealth, labor costs are relatively high, impacting compensation recruiting and selection decisions.
• Income tax differences between countries make pay structures more complicated when they cross national boundaries.

• Country’s laws often dictate requirements for HRM practices, e.g. training, compensation, hiring, firing, layoffs & labor relations.
• An organization that expands internationally must gain expertise in the host country’s legal requirements and ways of dealing with its legal system.
• Organizations will hire one or more host-country nationals to help in the process, e.g. contractors or consultants.

• HR planning involves decisions about where and how many employees are needed for each international facility.
• Decisions about where to locate include considerations such as cost and availability of qualified workers which must be weighed against financial and operational requirements.

1. Before you take on a foreign assignment, what would you want to know?
2. What do you think are the positive career aspects of a foreign assignment?
3. What do you think are the negative aspects of a foreign assignment

FOREIGN ASSIGNMENTS PRACTICAL EXERCISE #1
TYPICAL RESPONSES
1. Cost of living differences
2. Affect on my career
3. Cultural norms
4. Pay
5. Living situation (e.g. housing, education, day/elder care)
6. Healthcare availability & cost
7. Labor Laws
8. Language

FOREIGN ASSIGNMENTS PRACTICAL EXERCISE #2
TYPICAL RESPONSES
Positive aspects on an international assignment
1 – Impact on my career
2 – Living and working with other cultures
3 - Challenges
4- New Perspectives
5- Gaining Knowledge
6- Get to travel
7- New career opportunities
8

6
7
8
Negative aspects on an international assignment
1 – Impact on my career
2 – Family concerns
3 – Lack of face time with peers & superiors
4 – Poor foreign language skills
5- Poor living conditions

Key Criteria for Selection of Employees for Foreign Assignments
1. Competency in employee’s area of expertise
2. Ability to communicate verbally and nonverbally in the foreign country
3. Flexibility, tolerance of ambiguity, and sensitivity to cultural differences
4. Motivation to succeed and enjoyment of challenges
5. Willingness to learn about the foreign country’s culture, language, and customs
6. Support from family members
7. Overcoming culture shock

Assessing Candidates for Overseas Assignments
Motivation
Health
Language ability
Family
Considerations
Resourcefulness
Adaptability
Career Planning
Financial

• Compensation decisions affect a company’s costs and ability to compete.
• Challenge of competing with organizations in low-wage countries can be very difficult.
• Decisions about benefits must take into account the laws of each country involved, as well as employees ’ expectations and values in those countries.

Equal to or better than US Compensation
Base salary
Incentive pay
Taxes
Benefits
Housing allowances
Education

• Balance sheet approach – adjusts manager’s compensation so that it gives the manager same standard of living as in the home country plus extra pay for inconvenience of locating overseas.
• involves an effort by the global organization to ensure that its expatriates are “ made whole.
”

Most Expensive
1. Tokyo
2. Osaka
3. Sydney
4. Oslo
5. Melbourne
6. Singapore
7. Zurich
8. Paris
9. Caracas
10. Geneva
Least Expensive
Karachi
Mumbai
New Delhi
Kathmandu (Nepal)
Algiers
Bucharest
Colombo (Sri Lanka)
Panama City
Jeddah
Tehran

MOST EXPENSIVE
1. New York, NY
2. San Francisco, CA
3. Stamford, CT
4. San Jose, CA
5. San Diego, CA
6. Santa Barbara, CA
7. Bakersfield, CA
8. Los Angeles, CA
9. Fresno, CA
10. Boston, MA
LEAST EXPENSIVE
Idaho Falls, ID
Conway, AR
Springfield, IL
Pueblo, CO
Wichita Falls, TX
Fayetteville, AR
Memphis, TN
Norman, OK
McAllen, TX
Harlingen, TX

Albany Salary = $60,000
Brooklyn
Boston
Chicago
Los Angeles
Dallas
Philadelphia
St. Louis
$95,689
$77,260
$63,850
$71,666
$52,657
$66,768
$51,118

http://www.expatistan.com/cost-of-living/index
Prague, Budapest & Ankara = 100
London
Zurich
= 280
= 256
New York City
Paris
Lima
Warsaw
= 237
= 219
= 97
= 91
Cape Town
Delhi
Caracas
= 88
= 57
= 30

• Reverse Culture Shock
• Re-establishing network (out of sight – out of mind)
• Old work customs may become boring
• Can’t use new skills in old environment

Repatriate Solutions
1. Planning
Before foreign assignment
During foreign assignment
After foreign assignment
2. Career management
What will this assignment do for my career
What are my next steps in career progression after an international assignment
3. Compensation
Removal of overseas pay and perks
Financial counseling