Organizational Behavior

1. Organizational Behavior Human Resource Management and Labor Relations

2. Human Resource Management Identifying international managers Selection criteria The compensation package Adjustment and repatriation Labor Relations Definition Importance, challenges and strategy Comparative labor relations Future challenges

3. Identifying International Managers Home-country nationals (expatriates) Preferred in ethnocentric organizations and in initiating international new operations Host-country nationals Preferred in polycentric organizations and when local knowledge or lower costs are important factors Third-country nationals Common in regiocentric or geocentric organizations and when selection is based primarily on expertise Inpatriates Common in geocentric organizations to promote diversity and develop global core competencies

4. Selection Criteria General selection criteria Leadership, motivation, adaptability, independence, self-reliance Experience, education, knowledge of local language Physical and emotional health, age, support of spouse and children Self-evaluation and preparation Is an international assignment really for me? Does my spouse support the decision? Do I have the necessary technical skills? Am I ready to invest in learning about the country?

5. The Compensation Package Balance-sheet approach: Ensures expatriate does not lose money from the assignment Complementary approach: Negotiation of a mutually acceptable ad hoc arrangement Localization: Expatriate salary comparable to salaries paid host-country nationals Lump sum method: Upfront incentive payment Cafeteria approach: Compensation package based on a series of individualized options Regional system: Set compensation for all expatriates assigned to a particular region

6. The Relocation Transition Curve

7. Repatriation of Expatriates Reasons for returning to home country agreed-on tour of duty is over want children educated in a home-country school are not happy in the overseas assignment failed to do a good job Key sources of readjustment problems “Out of sight, out of mind” syndrome Organizational changes Technological advances Adjusting to the new job back home

8. Adjustment Problems and Transition Strategies The main problems of repatriation include Adjusting to life back home Financial package not as good as overseas Less autonomy in the stateside job No career counseling from the company Transition Strategies Repatriation agreements Mentor programs Maintaining constant contact Cultural re-entry programs

9. Labor Relations Definition The process through which management and workers identify and determine the job relationships that will be in effect in the workplace Labor relations mechanisms are used to determine, among others considerations, wages working hours working conditions related areas such as vacations and benefits

10. Labor Relations and MNC Importance Directly impact labor costs and productivity Indirect impact through linkages to political issues Increasingly part of global agreements Challenges Differ significantly from country to country Labor relations climates reflect cultural values and orientations historical development and experiences legal regimes, and the relative power of government, industry and workers Effective worldwide strategies require a balancing of global and local pressures

11. Challenges for the MNC Labor relations differ significantly from country to country Labor relations climates reflect Cultural values and orientations Historical development and experiences Legal regimes and the relative power of government, industry and workers Effective worldwide labor relations strategies require a balancing of global and local pressures and forces

12. Labor Relations Strategy Management philosophy Ethnocentric, poly/regiocentric and geocentric approaches Managing labor costs Pursuing low-cost strategies in emerging economies Some workers are grossly exploited in some countries – toiling for long hours, in unsafe conditions, for minimum pay. Reducing labor costs in home-countries Part-time work, shift work, non-permanent employment, and subcontracting

13. Days Lost to Labor Disputes, 1993-2002

14. Labor Relations in the U.S. About 12% of US workforce is unionized Shift in the US to greater labor-management cooperation Negotiations generally follow a formalized processes of collective bargaining resulting in legally binding agreements on wages, hours, and conditions of employment a definition of grievance procedures and conditions that limit strikes Non-adversarial approaches to resolving disputes

15. Labor Relations in Europe European firms typically negotiate agreements with unions at the national level Many European unions have more political power than U.S. unions Salaried employees in Europe (including those at managerial levels) often have unions of their own European unions have existed longer than those in the United States and occupy a more accepted position in society

16. Labor Relations in Japan Japanese unions are relatively weak (enterprise unions) Social custom dictates non-confrontational union–management behavior Cultural value of Wa Disputes are settled in an amicable manner though sometimes resolved by third-party mediators or arbitrators Strikes and lockouts in Japan are very rare Strikes severe following WWII, but today only to make a point

17. Labor Relations in Emerging Economies (China, India, SEA) Organized sector is usually a small part of the economy Labor unions are generally fragmented (often as a result of anti-union legislation) Labor unions are politicized or co-opted by powerful political actors and elites As a result employees are less likely to initiate actions or organize unions to negotiate for improved working conditions, and workers are often compelled to accept conditions of work set by management

18. Industrial Disputes in Emerging, Transition and Developed Countries

19. Future Challenges MNCs are under increasing pressure to upgrade working conditions and labor practices at manufacturing and other facilities NGOs and other groups pressure MNCs to adhere to international standards and adopt new and more stringent codes of conduct Increasing standards of living and demands for democratization increase local pressure on MNCs to improve labor conditions