Human Resource Management: Fifteenth Edition

Human Resource Management
Fifteenth Edition
Chapter 14
Global Human Resource
Management
Copyright © 2019, 2016, 2014 Pearson Education, Inc. All Rights Reserved
Learning Objectives (1 of 2)
14.1 Discuss the evolution of global business and the
context of global human resource management.
14.2 Summarize global staffing practices.
14.3 Describe global performance management and human
resource development practices.
14.4 Discuss global compensation practices
Learning Objectives (2 of 2)
14.5 Explain global safety, health, and employee and labor
relations.
14.6 Discuss globalization issues for small to medium-sized
businesses.
Evolution of Global Business (1 of 3)
• The environment confronted by businesses today is so
vastly different from doing business in one or two
countries of only a few decades ago
• It is now one large marketplace consisting of more than
7.5 billion people speaking 6,900 languages
• An indicator of the magnitude of the global economy is the
gross domestic product (GDP), which describes the size of
a country’s economy
• The five largest GDPs total about $58 trillion: China, $21.2
trillion; United States, $19.2 trillion; India, $8.7 trillion;
Japan, $4.9 trillion; and Germany, $3.9 trillion.
• Not long ago, Mercedes-Benz was still a German company,
General Electric was American, and Sony was Japanese
• Many United States firms do most of their business and
employ a substantial number of their workers outside U.S.
• Many non-U.S. companies make products here
Exporting, Licensing, Franchising
• Exporting: Selling abroad retaining foreign agents and
distributors
• Licensing: Organization grants foreign firm right to use
intellectual property
• Franchising: Parent company grants another firm right
to do business in prescribed manner
Types of Global Businesses
• Multinational corporation: Firm based in one country
that produces goods or provides services in one or more
foreign countries
• Global corporation: Corporate units in countries are
integrated to operate as one organization worldwide
Global Environment
• The functional areas associated with effective global HR
management are similar to the ones they experience
domestically
• The global external environmental factors may significantly
impact the manner in which they are implemented
Environment of Global Human Resources
Management
Country Political and Economic Structure
• In the U.S., democracy characterizes the political system
and the economy is based on capitalism
• In China, communism characterizes the political system
and the economy is based on communism
Legal System
• The growing complexity of legal compliance in the global
environment is one of the most important trends affecting
global business
• Managers contend with a growing tide of employment
legislation, and sometimes, the laws of one contradict
those of another
National Cultural Values
• Cultural differences create challenges for managing HR
• Cultural values pertain to the norms for behaviors and
beliefs
• National culture is steeped in a country’s history, a
society’s social traditions, political and economic
philosophy, and legal system
Dimensions of National Culture
Six dimensions of national culture:
• Power distance
• Individualism/collectivism
• Masculine/feminine
• Uncertainty avoidance
• Pragmatism/normative
• Indulgence/restraint
Labor Force Characteristics and Dynamics (1 of 2)
• Labor force characteristics create challenges throughout
the world
• Every country’s labor force is shaped by a variety of
forces, for example:
– China’s one-child policy has created a labor shortage
– Japanese culture relatively disfavors romantic
relationships
Labor Force Characteristics and Dynamics (2 of 2)
• Educational attainment and gender are important
characteristics
• Skill gaps are prevalent throughout the world
• Female talent is underused in many countries,
exacerbating labor shortages
Types of Global Staff Members
• Expatriate: Employee working in firm who is not a citizen
of country in which firm is located, but a citizen of country
where organization is headquartered
• Host-country national: Employee’s nationality same as
location of subsidiary
• Third-country national: Citizen of one country, working
in second country, and employed by organization
headquartered in third country
Approaches to Global Staffing
• Ethnocentric staffing: Primarily hiring expatriates for
higher-level foreign positions
• Polycentric staffing: More host-country nationals are
used throughout the organization, from top to bottom
• Regiocentric staffing: Regional groups of subsidiaries
reflect organization’s strategy and structure work as a unit
• Geocentric staffing: Using worldwide integrated business
strategy to hire the best person for the job
Recruiting Host-Country Nationals
• Should not assume that recruiting approaches that
worked in parent company will be effective in recruiting
host-country nationals
• Example: Error that many recruiters make is believing
that all countries in Europe are similar or the same
Selecting Expatriates
Four distinct stages:
1. Self-selection
2. Creating a candidate pool
3. Technical skills and managerial readiness assessment
4. Making a mutual decision
Background Investigation
• Conducting background investigations in other countries
is equally, or more, important than in U.S.
• Differences across cultures and countries often create
barriers
• Each country has own laws, customs, and procedures
for background screenings
Global Performance Management and
Human Resource Development
• Influences on effectiveness of performance appraisal
process
– Information asymmetry
– Cultural norms
• Training of expatriates improving
Expatriate Preparation and Development
Program
Global E-Learning and Virtual Teams
• Globalization has created special need for e-learning
• Virtual teams
– Necessity of everyday working life
– Enable companies to accomplish things more quickly
and efficiently
– Difficulties:
 Do not feel as connected or committed to team
 Communication problems directly proportional to
number of time zones separating them
 Language and culture problems
Compensation
• HCN compensation:
– Organizations should think globally but act locally
– Factors to consider:
 Minimum wage requirements
 Working time information, and hiring and termination
rules
 Culture often plays a part
• Expatriate compensation: overall remuneration, housing,
cost-of-living allowances, and physical relocation
– Balance Sheet Approach: Ensures standard of living
of the home country
Global Safety, Health, and Employee and
Labor Relations
• Safety and health
– Global companies continue to face global safety risks
– Bhopal Disaster of 1984 was worst industrial disaster
in history
• Global Labor Relations
– Codetermination
Globalization for Small to Medium-Sized
Businesses
• International sales have become vital and growing part
of market for small to medium businesses
• Can be intimidating
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