Module 10: Overview

1. Module 10: Overview • Discussion: Cross cultural aspects of management • Reading: Adapting to a boundaryless world: A developmental expatriate model • Case Study: International sourcing in athletic footwear: NIKE and REEBOK

2. International Expansion • Strategies for expanding internationally • Exporting locally produced goods to host country • Subcontracting or licensing production of certain goods or services to foreign partner • Entering into joint venture with foreign partner • Setting up operations (making a direct investment) in form of foreign branch or subsidiary

3. The Management Challenges of International Business • Coordinating market, product, and production plans on a worldwide basis • Creating organization structures capable of balancing centralized home-office control with adequate local autonomy. • Extending its HR policies and systems to service its staffing needs abroad:

4. The HR Challenges of International Business • Deployment • Easily getting the right skills to where we need them, regardless of geographic location. • Knowledge and innovation dissemination • Spreading state-of-the-art knowledge and practices throughout the organization regardless of where they originate. • Identifying and developing talent on a global basis • Identifying who can function effectively in a global organization and developing his or her abilities.

5. How International & Domestic HRM Differ • International HRM requires • Managing broader range of functional areas • Becoming more involved in employees’ personal lives • Setting up several different HRM systems for different geographic locations • Dealing with more complex external constituencies • Participating in international assignments that have heightened exposure to personal risk

6. Assessing Culture: Hofstede’s Cultural Differences Dimensions • Individualism or collectivism • Individualistic societies value development of & focus on individual • Collective societies value group relationships • Power distance • Extent to which society is hierarchical, & how power is distributed among its members • Uncertainty avoidance • Extent to which society feels comfortable with ambiguity & values & encourages risk-taking • Quantity versus quality of life

7. Assessing Culture

8. Hall’s Model of Cultural Differences • Time • Importance or sense of time in daily activities • Space (distance) • Amount of physical distance individuals attempt to maintain between themselves & others • Material goods • Emphasis or inferences on possession of goods to signify power, success & status • Friendships • Importance of friendships in conferring status • Agreements • Considers how agreements are reached

9. Strategic Issues

10. Four Approaches to IHRM • Make strategic decision as to level of standardization desired across locations • Ethnocentric approach • Exporting organization’s home country practices & policies to foreign locations • Polycentric approach • Allowing each location to develop own practices & policies

11. Four Approaches to IHRM • Regiocentric approach • Developing standardized practices & policies by geographic region • Geocentric approach • Developing one set of global practices & policies applied at all locations

12. Setting Strategic HR Standards

13. Strategic HR Issues in Global Assignments • Strategic management of global assignments • Establish specific purpose for assignment • Select appropriate employee for assignment • Organizational & individual purposes for assignment must be identified & matched

14. Strategic HR Issues in Global Assignments • Strategic management of global assignments • Assess adaptability to host culture of both employee & any family members who will be accompanying employee • Provide appropriate training for employee & family members • Simultaneous training should be conducted for headquarters staff

15. Balance sheet method Expatriate salary based on home country pay Additional expenses associated with relocation & assignment Hardship & incentives to determine overall reimbursement & compensation level Higher-of-home-or-host method Employee’s salary at home adjusted upward to account for higher cost of living Localization approach Salary converted to host country’s equivalent when employee is on permanent assignment Determining Expatriate Compensation

16. Repatriation

17. Summary of Best Practices

18. Summary of Best Practices