SMM 232 International Human Resource Management

1. SMM 232International Human Resource Management Module Introduction

2. Introductions Module Tutors Roger Bull Dr Abdullah Sheikh

3. Introductions Introduce yourself, briefly: Your name Where you are from Previous education Work experience Future career aspirations Why this particular MBA programme

4. Today • Why study Human Resource Management? • What is International Human Resource Management • Introduction to the Module • Issues to be covered • Learning outcomes • Lectures and seminars – case studies and presentations • Module handbooks • Assessment • Reading • Expectations

5. Why look at HRM? • In any business venture, the management of people is central to success – and poor leadership and people management can condemn a venture to failure. • This can occur at the ‘micro’ level of a work team – and at the ‘macro’ level of business strategy. • Some examples.

6. Authority in the Clouds

7. ‘Micro-HRM failures’ Problems in teams AIR SAFETY ‘Regions with high accident rates share similar cultural values, such as power distance — the inability of subordinates to question the actions of superiors and recommend alternative actions — and uncertainty avoidance, which emphasizes rigid adherence to rules and procedures that reduces the directness and bluntness of communication. Direct and rapid communication is often essential if accidents are to be avoided.’ ‘In virtually every organization, the ability to create effective relationships is essential. The same is true in the cockpit of an airplane. During critical moments, effective communication can mean the difference between life and death. You can avoid accidents most of the time if you have a flight crew whose members can talk to one another and whose voices are listened to.’ Source: James Schulz, ‘Hear what they’re saying: the influence of culture on cockpit communication’ (www.odu.edu/ao/instadv/quest/cockpitcommun.html)

8. Explanations? Pilots often have military training What is the impact of that on communications in teams?

9. Explanations ‘… emphasis on rules, order, strict time limits and a preference for finding a single correct answer to any problem. …subordinates are unlikely to question or challenge their superiors, even if they are aware of situation-critical information that senior pilots are not.’ This raises strategic issues for management • Cultural differences between countries can be relevant. • ‘Power distance’ and ‘uncertainty avoidance’ are concepts used to analyse different national cultures. • Training of managers and what counts as good leadership varies • Concepts of leadership vary . • Is there a single correct answer to any problem? • The ability to accept different points of view – based on evidence – can be vital in developing sound policies. International managers need to be able to tolerate ambiguity and difference.

10. Money can’t buy me love

11. ‘Macro-HRM strategic failures’ Mergers and acquisitions In 2000, Deutsche Bank wanted to buy Dresdner Bank – two of Germany’s largest banks. The plan had implications for Dresdner’s British workforce, based in the City of London. It involved either selling off Dresdner’s London-based investment bank – Kleinwort Benson – or incorporating it into Deutsche. One key asset was the skilled workforce at Kleinwort Benson – its ‘human resources’: many of these were highly-paid investment bankers, who had a lot of freedom to make deals, and were paid large annual bonuses. The proposal led to an exodus of talent from Kleinwort Benson – on such a scale that the merger was abandoned, despite the creation of a large fund to offer cash to those who stayed. The German newspaper Handelsblatt commented: ‘Top management had neither foreseen this development, nor were they able to influence it’.

12. Explanations? • London-based staff did not want to be swallowed up into what they saw as a ‘large German bureaucracy’. • Concerns that culture of entrepreneurship – and big bonuses – might be negatively affected by the takeover. • Strategic issues: • Organisational culture and national culture not considered in planning the acquisition • Payment systems and management style vary internationally • Retention (HR) issues considered too late in the acquisition • Failure to anticipate how employees perceived the change • Deutsche Bank’s business strategy could not be fulfilled because they had not developed an international people strategy.

13. Main areas of HRM HR’s central concerns are: Procurement That is, the recruitment of employees - or acquisition of staff through purchase of a business – and their assignment to a role, their orientation, development and training. Management That is, payment (reward or compensation), performance management, monitoring and enhancement of health and safety, and employee relations: their rights as employees. ‘Outprocessing’ That is, under what circumstances they leave an organisation (retirement, dismissal, ‘retrenchment’, downsizing, sale (divestiture) of the business.

14. What is international HRM? “The HRM issues and problems arising from the internationalisation of business, and the HRM strategies, policies and practices which firms pursue in response to the internationalisation of business” (Scullion & Linehan, 2005:4) “We define the field of IHRM broadly to cover all issues related to the management of people in an international context. Hence our definition of IHRM covers a wide range of human resource issues facing MNCs in different parts of their organizations. Additionally we include comparative analyses of HRM in different countries.” (Stahl & Bjorkman, 2006, cited in Dowling et al. 2008:5)

15. What is international HRM? In the past, IHRM dealt mainly with four areas of HRM – all related to expatriates (Welch, 1994). • Recruitment and selection of international employees (expatriates) • Training and development of expatriates. • Reward (compensation) for expatriates. • Repatriation of expatriates. Iles, cited in Mabey et al. (1995) added to this: • Managing multicultural teams and diversity • Managing performance.

16. What is international HRM? Hendry (1995) offered a more strategic perspective. IHRM deals with: • Management and development of expatriates • The internationalisation of management. • The internationalisation of the whole organisation – developing awareness of cross-cultural and cross-national interactions in international businesses (and other organisations). More recent approaches have looked at the internationalisation of firms – and its HRM consequences: for example, how to manage geographically-dispersed workforces to gain competitive advantage. Evans et.al. (2010) focus on the ‘global challenge’ for companies – especially in the fields of knowledge management, global leadership development, and managing change in an international context, of which one of the biggest changes is becoming an effective international player. Finally, Lane et.al. (2006) stress the complexity of international management – and see IHRM as both a part of, and solution to, this complexity. In particular, they focus on the need to develop international leadership competences.

17. What is international HRM? “………….two major trajectories…..are apparent in IHRM. “The international trajectory may be referred to as the study of human resource policies and practices in multinational enterprises. This involves strategic considerations in formulating policies (e.g. recruitment, training and reward) affecting the staffing of headquarters and subsidiaries in international enterprises. A central focus of this approach has been on expatriation. “The comparative trajectory refers to the investigation of embodied contexts, policies and practices in specific national and regional domains. This might be referred to as the ‘National Geographic’ perspective as it concerns ‘terrains’ of organizational and employment structures and practices as conditioned by indigenous socio-political and economic factors.” Hollinshead, 2010

18. Differences between HRM and IHRM Firms often underestimate the complexity involved in managing international activities – and building the ‘organisational capabilities’ they need to undertake these. What do you think might make international HRM more complex?

19. Why study IHRM? • Rapid corporate internationalisation has led to greater mobility and diversity of staff – and a need to manage them in complex contexts. • Good IHRM builds competitive advantage, helping firms implement international strategies and integrate complex structures. • Implementation of global strategies is highly dependent on availability of capable international managers – shortages. • Performance of expatriate employees continues to be a problem. • The ability to ‘create, transfer and integrate knowledge across borders’ (Scullion & Linehan, 2005: 9) is a source of competitive advantage that is dependent on mobility and cross-cultural teams. • International growth often creates new ‘critical incidents’ – such as mergers and acquisitions – that call for special HR skills.

20. Module overview The Module will look at: • the implications for the management of people when organisations operate outside their own boundaries • introduction to key themes in HRM – with special reference to their international application • theories and models developed to address these issues.

21. HR and internationalisation • Internationalisation of business - HR implications and strategies • Culture – its impact on HRM and management • Transferring HR practices between countries and building a capable international HR function. • International leadership competences. • International staffing – management of expatriates • Managing change – issues in an international context • Mergers and acquisitions – example of a critical incident • Ethics and codes of conduct in an international context

22. The overall approach • The Module aims to develop a range of skills – in line with guidelines set by the UK’s Quality Assurance Agency for Higher Education (QAA). • In particular we want to develop: • Awareness of business issues informed by research and good practice – academic journals, consultants, case studies, business press. • An ability to look at research with a critical perspective – that is, to question its assumptions, its methods, and compare and contrast it with alternative accounts. • Capacity to apply research and models to real-life complex situations. • A sense of the dilemmas facing organisations – and how to think about these in an analytical way. • The ability to communicate effectively – orally and in writing, using a range of media. • Strategic thinking – identify and analyse what is critical to an organisation’s survival and success, and how to implement them.

23. Learning outcomes • The Module is structured in line with a set of ‘Learning Outcomes’ – these were approved by the University and may not be changed without a special procedure. • They indicate how the overall aims of the MBA Programme and QAA guidelines are translated into a set of objectives for participants on this Module. • Passing the Module means showing that you have achieved the Learning Outcomes – as demonstrated by passing the Assessments. • In the Learning Outcomes set out in the Module Handbook, there is an indication of the topics relevant to each outcome.

24. Review learning outcomes • Analyse and evaluate the context of international business to the management of people. • Evaluate the contribution of major schools of management to the development of ideas in HRM. • Analyse & evaluate approaches to the effective performance of people at work. • Through analysis contribute to the design of and development of international organisations. • Evaluate the contribution of key human resource initiatives in effecting change and enhanced performance in international organisations. • Contribute to the formation of an HR strategy relevant to an international business. • Demonstrate an understanding of the role of effective leadership. • Evaluate the main strategies used to effect change.

25. Teaching and learningLecturesLecture notes and course materials will be available on UEL Plus.Lecture notes should be downloaded and printed.SeminarsCase studies, class discussions of reading, student presentations. Some time for reading and group work during the blocks.Seminar materials usually provided or made available on UEL Plus.ReadingIndicative reading in the Module Handbook – further and updated reading made available on UEL Plus.

26. AssessmentTwo assignments for SM232 – one in IHRM, one in Project Management IHRM Assignment2,500 wordsIssued to you in December – submission 7th January 201350% of the marks for the moduleThe overall pass-mark is 50% - averaged over both assignmentsYou must get at least 40% (‘threshold mark’)on any individual element of assessmentIf you fail to get 50% overall you must resit BOTH the IHRM and Project Management assignments

27. Learning how to learn – and the role of evidence in management • Emphasis on your own learning – in particular reading and reflecting on what you read. • Combining your own experience with models and theories developed by researchers. • Looking for evidence to support your analysis. • Going ‘beyond the bullet point’. See, Pfeffer, J and Sutton, R.I. (2006) ‘Evidence-based management’, Harvard Business Review, January 2006. Available in the readings folder on UEL Plus

28. One best way? ‘For every complex problem there is an answer that is clear, simple ….. and wrong.’ Henry Louis Mencken 1880-1956 ‘Sage of Baltimore’

29. Questions?

30. References • Evans, P., Pucik, V, and Björkman, I. (2010) The Global Challenge: International human resource management. Boston, MA: McGraw-Hill • Hendry, C. (1995) Human Resource Management. Oxford: Butterworth-Heinemann • Hollinshead, G. (2010) International and Comparative Human Resource Management. Maidenhead: McGraw-Hill • Lane, H.W., Maznevski, M.L., Mendenhall, M.E., and McNett, J. (2006) Handbook of Global Management: Aguide to managing complexity. Oxford: Blackwell Publishing • Mabey, C., Iles, P., and Salaman, G. (1995) Strategic Human Resource Management. Oxford: Blackwell Publishers • Pfeffer, J and Sutton, R.I. (2006) ‘Evidence-based management’, Harvard Business Review, January 2006. • Scullion, H. and Linehan, M. (eds) (2005) International Human Resource Management: A critical text. Basingstoke: Palgrave Macmillan • Welch, D. (1994) ‘HRM Implications of Globalization’, Journal of General Management, 19(4): 52-68