International Human Resource Management
Managing people in a multinational context
Chapter Objectives
We focus on the ‘managing the people’ aspect of IHRM:
• Issues relating to staffing foreign operations
• The reasons for using international assignments:
filling positions and developing managers and organizations.
• Various types of international assignments:
short term, extended and longer term;
• Various non-standard arrangements:
commuter, rotator, contractual and virtual
• The role of expatriates and non-expatriates in supporting
international business activities
• Return on investment of international assignments
• The role of the corporate HR function in MNEs
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Table
4-1a
The advantages and disadvantages of using PCNs
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Table
4-1b
The advantages and disadvantages of using TCNs
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Table
4-1c
The advantages and disadvantages of using HCNs
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Staffing Choices
Ethnocentric Management
Where the home country management style is imposed on the host country. The assumption is
that what works at home should also work overseas. This style of management is not well suited
or applicable to the global world today. The management team has to diversify and adjust in
being flexible to accommodate the host country’s culture and employees’ norms and social
relation in the workplace.
Polycentric Management
The foreign market is too hard to understand so host-country managers are relatively free to
manage their own way. Competition is focused on a market-by-market basis. This type of
management style is used by such franchises as McDonald’s, Domino’s Pizza, Kentucky Fried
Chicken, Pizza Hut, and Burger King.
Regiocentric Management
The style most parent organizations use when they feel that the regional insiders best coordinate
operations within the region. The assumption is that the regional workers know their market
better than others. Similarly, these employees can serve an entire region for economies of scale
purposes instead of having many representatives in various countries.
Geocentric Management
A highly interdependent system that speaks in terms of the global village. The focus is at once both
worldwide and on local objectives. Some franchises operate based on the geocentric management
orientation. They focus on being a worldwide business first and then they regionalize in groups.
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Figure
4-1
Determinants of staffing choices
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Reasons for International Assignments
1. Position filling
2. Management development
3. Organization development
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Types of international assignments
•
•
•
Short term
up to 3 months
Extended
up to 1 year
Long term (traditional expatriate assignment)
1 to 5 years
Some non-standard assignments:
• Commuter
go home every one to two weeks
• Rotational
commute for set period followed by
break in home country
• Contractual specific skills employees hired for
6 to 12 months on specific projects
• Virtual
employee manages international
responsibilities from home country base
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Table
4-2
Differences between
traditional and short-term assignments
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Figure
4-2
The roles of an expatriate
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Figure
4-3
ROI indicators for calculating international assignments
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4-steps to calculate expatriate ROI
1. Identify financial and non-financial costs and
benefits.
2. Link the costs and benefits to the purpose of
the long-term assignment.
3. Identify the appropriate antecedents (prior
events) from a system’s perspective.
4. Conduct the calculation at an appropriate time
within the context of the assignment’s purpose.
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Table
4-3
Various roles of corporate HR
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