Noe_FHRM9e_PPT_Ch16_accessible.pptx SHRM

Editor's Notes

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• #3: This chapter discusses the HR issues that organizations must address in a world of global competition. How the global nature of business is affecting HRM in modern organizations, how global differences among countries affect the organization’s decisions HR, HR planning, selection, training, and compensation practices in international settings and guidelines for managing employees sent on international assignments is discussed.
• #4: LO 16-1 Summarize how the growth in international business activity affects human resource management. A variety of international activities require managers to understand HRM principles and practices prevalent in global markets. Once organizations have taken advantage of these opportunities, they sometimes find themselves locked into overseas arrangements. In the consumer electronics industry, for example, so much of the manufacturing has shifted to China and other low-wage countries that U.S. companies no longer would have suppliers nearby if they tried to build a factory in North America.
• #5: Foreign countries can provide a business with new markets in which there are millions or billions of new customers; developing countries often provide such markets but developed countries do so as well. Companies set up operations overseas because they can operate with lower labor costs.
• #6: When organizations operate globally, their employees are very likely to be citizens of more than one country. Employees may come from the employer’s parent country, a host country, or a third country. Parent country is the country in which an organization’s headquarters is located. Host country is a country (other than the parent country) in which an organization operates a facility. Third country is a country that is neither the parent country nor the host country of an employer. Expatriates are employees assigned to work in another country.
• #7: When starting your career, would you be interested in taking a job in another country? What would be the biggest motivator in your decision? Yes, it would be a fun and exciting challenge. Yes, if I already knew the language. No, I would be too nervous about learning another country’s culture, language, and customs. No, I wouldn’t want to leave my family. Other Student answers will vary. This can lead to a lively discussion of the chapter’s materials.
• #8: As organizations grow, they often begin to meet demand from customers in other countries. The usual way that a company begins to enter foreign markets is by exporting, or shipping domestically produced items to other countries to be sold there. Eventually, it may become economically desirable to set up operations in one or more foreign countries. International organization is an organization that sets up one or a few facilities in one or a few foreign countries. Multinational company is an organization that builds facilities in a number of different countries in an effort to minimize production and distribution costs. Global organization is an organization that chooses to locate a facility based on the ability to effectively, efficiently, and flexibly produce a product or service, using cultural differences as an advantage.
• #9: Just as there are different ways for employees to participate in international business so there are different ways for employers to do business globally, ranging from simply shipping products to customers in other countries to transforming the organization into a truly global one with operations, employees, and customers in many countries. Figure 16.1 shows the major levels of global participation.
• #10: A global organization needs a transnational HRM system that features decision making from a global perspective, managers from many countries, and ideas contributed by people from many cultures. Decisions that are the outcome of a transnational HRM system balance uniformity (for fairness) with flexibility (to account for cultural and legal differences).
• #11: LO 16-2 Identify the factors that most strongly influence HRM in international markets. The most important influence on international HRM is the culture of the country in which a facility is located. Cultural characteristics influence the ways members of an organization behave toward one another as well as their attitudes toward various HRM practices. Cultures strongly influence the appropriateness of HRM practices. Cultural differences can affect how people communicate and how they coordinate their activities.
• #12: Such cultural characteristics as these influence the ways members of an organization behave toward one another, as well as their attitudes toward various HRM practices. Practices that are effective in the United States, for example, may fail or even backfire in a country with different beliefs and values. Differences among organizations within a particular culture are sometimes larger than differences from country to country. It is important for an organization to match its HR practices to its values; individuals who share those values are likely to be interested in working for the organization. Cultures differ strongly in their opinions about how managers should lead, how decisions should be handled, and what motivates employees. Consider the five dimensions of culture that Geert Hofstede identified in his classic study of culture: Individualism/collectivism Power distance Uncertainty avoidance Masculinity/femininity Long-term/short-term orientation
• #13: The success of HRM decisions related to job design, benefits, performance management, and other systems related to employee motivation also will be shaped by culture. Cultural differences can affect how people communicate and how they coordinate their activities.
• #14: Countries also differ in the degree to which their labor markets include people with education and skills of value to employers. Educational opportunities also vary from one country to another. In general, spending on education is greater per pupil in high-income countries than in poorer countries. The health of an economic system affects HRM. In developed countries with great wealth, labor costs are relatively high. Such differences show up in compensation systems and in recruiting and selection decisions.
• #16: A country’s economic system, whether capitalist or socialist, as well as the government’s involvement in the economy through taxes or compensation, price controls, and other activities, influences HRM practices in a number of ways.
• #17: A country’s political-legal system—its government, laws, and regulations—strongly impinges on HRM. The country’s laws often dictate the requirements for certain HRM practices, such as training, compensation, hiring, firing, and layoffs. United States has led the world in eliminating discrimination in the workplace. Since the amount of take-home pay a worker receives after taxes may thus differ from country to country, in an organization that pays two managers in two countries $100,000 each, the manager in one country might take home more than the manager in the other country. Such differences make pay structures more complicated when they cross national boundaries, and they can affect recruiting of candidates from more than one country. The political-legal system arises to a large degree from the culture in which it exists, so laws and regulations reflect cultural values. For example, United States has led the world in eliminating discrimination in the workplace. Because this value is important in U.S. culture, the nation has legal safeguards such as the equal employment opportunity, which affect hiring and other HRM decisions. As a society, United States also has strong beliefs regarding the fairness of pay systems. Thus, the Fair Labor Standards Act, among other laws and regulations, sets a minimum wage for a variety of jobs. Other laws and regulations dictate much of the process of negotiation between unions and management. All these are examples of laws and regulations that affect the practice of HRM in the United States. Similarly, laws and regulations in other countries reflect the norms of their cultures.
• #18: LO 16-3 Discuss how differences among countries affect HR planning at organizations with international operations. As economic and technological change creates a global environment for organizations, HR planning is involved in decisions about participating as an exporter or as an international, multinational, or global company. Even purely domestic companies may draw talent from the international labor market. When organizations decide to operate internationally or globally, HR planning involves decisions about where and how many employees are needed for each international facility.
• #20: Honeymoon – period of fascination and euphoria as the employee enjoys the novelty of the new culture. Culture shock – the disillusionment and unfreezing of ideas that occur during the process of adjusting to a new culture. Learning – continued learning about the host country’s culture, language increase their comfort level and their mood. Adjustment – stage where the expatriate accepts and enjoys the host country’s culture. The factor most strongly influencing whether an employee completed a foreign assignment was the comfort of the employee’s spouse and family. Personality may also be important. Successful completion of overseas assignments has been found to be most likely among employees who are extroverted (outgoing), agreeable (cooperative and tolerant), and conscientious (dependable and achievement oriented). The emotions that accompany an overseas assignment tend to follow in a cycle like that in Figure 16.2. Qualities of flexibility, motivation, agreeableness, and conscientiousness are so important because of the challenges involved in entering another culture.
• #21: Rachel is an expatriate working in Japan. She is feeling very uncomfortable in her surroundings. She often feels as if she has said the wrong thing. Rachel is most likely in which emotional stage of expatriation? Honeymoon Culture shock Learning Adjustment Answer: B In the second stage, the employee’s mood declines as he or she notices more unpleasant differences and experiences feelings of isolation, criticism, stereotyping, and even hostility. As the mood reaches bottom, the employee is experiencing culture shock, the disillusionment and discomfort that occur during the process of adjusting to a new culture and its norms, values, and perspectives.
• #22: In an organization whose employees come from more than one country, two special challenges arise with respect to training and development. Developers of effective training programs for an international workforce must ask certain questions such as objectives for the training and its content, training techniques, strategies, and media to use. Language differences will require translations, any other interventions and conditions that must be in place for the training to meet its objectives. They need to consider who in the organization should be involved in reviewing and approving the training program, international differences among trainees and whether they will consider it appropriate to ask questions and whether they expect the trainer to spend time becoming acquainted with employees or to get down to business immediately.
• #23: The plan for training program must consider international differences among trainees. Table 16.1 provides examples of how cultural characteristics can affect training design. For example, economic and educational differences might influence employees’ access to and ability to use web-based training. Cultural differences may influence whether they will consider it appropriate to ask questions and whether they expect the trainer to spend time becoming acquainted with employees or to get down to business immediately.
• #24: When an organization selects an employee for a position in a foreign country, it must prepare the employee for the foreign assignment. This kind of training is called cross-cultural preparation. It often includes family members who will accompany the employee on the assignment. Methods for providing this training may range from lectures for employees and their families to visits to culturally diverse communities. Employees and their families may also spend time visiting a local family from the country where they will be working. It is important for employers to remember that returning home is also a challenge when employees have been away for months or years. Returning employees often find that life at home seems boring, relative to the excitement of learning a new culture, and family members and colleagues at home may find it hard to relate to their recent experiences. Employers should be ready for employees who want to share what they learned and put their recently acquired skills to work in new assignments. Career development helps expatriate and inpatriate employees make the transitions to and from their assignments and helps the organization apply the knowledge the employees obtain from these assignments.
• #25: LO 16-5 Discuss challenges related to managing performance and compensating employees from other countries. The general principles of performance management may apply in most countries, but the specific methods that work in one country may fail in another. The extent to which managers measure performance may also vary from one country to another. Organizations have to consider legal requirements, local business practices, and national cultures when they establish performance management methods in other countries. Differences may include which behaviors are rated, how and the extent to which performance is measured, who performs the rating, and how feedback is provided.
• #26: Compensation decisions about pay structure, incentive pay, and employee benefits become more complex when an organization has an international workforce.
• #27: As Figure 16.3 shows, market pay structures can differ substantially across countries in terms of both pay level and relative worth of jobs. A global compensation strategy is important as a way to show employees that the pay structure is designed to be fair and related to the value that employees bring to the organization.
• #28: Organizations with a global pay strategy must adjust the strategy to account for local requirements and determine how pay decisions for optional practices will affect their competitive standing in local labor market.
• #30: Paid vacation tends to be more generous in Western Europe than in the United States. Figure 16.4 compares the number of hours the average employee works in various countries. Of these countries, only in Mexico, South Korea, and Chile do workers put in more hours than U.S. workers. In the other countries, the norm is to work fewer hours than a U.S. worker over the course of a year.
• #31: Companies that operate across national boundaries often need to work with unions in more than one country. labor relations on an international scale involve differences in laws, attitudes, and economic systems, as well as differences in negotiation styles. In comparison with European organizations, U.S. organizations exert more centralized control over labor relations in the various countries where they operate. U.S. management therefore must recognize differences in how various countries understand and regulate labor relations. Legal differences range from who may form a union to how much latitude an organization is allowed in laying off workers. Negotiations between labor and management take place in a different social context, not just different economic and legal contexts. Cultural differences that affect other interactions come into play in labor negotiations as well.
• #32: Most international organizations assign managers to foreign posts. These assignments give rise to significant HR challenges: Selecting managers for these assignments Preparing them Compensating them Helping them adjust to a return home The same kinds of HRM principles that apply to domestic positions can help organizations avoid mistakes in managing expatriates: Planning and goal setting Selection aimed at achieving the HR goals Performance management that includes evaluation of whether the overseas assignment delivered value relative to the costs involved
• #33: LO 16-6 Explain how employers prepare managers for international assignments and for their return home.
• #34: Consider the statements in Figure 16.5, which are comments made by visitors to the United States. Do you think these observations accurately describe U.S. culture?
• #35: Measures such as productivity should take into account any local factors that could make expected performance different in the host country than in the company’s home country. For example, a country’s labor laws or the reliability of the electrical supply could affect the facility’s output and efficiency.
• #36: Expatriates sent to expensive destinations such as Singapore and Hong Kong can receive $200,000 a year in subsidies to cover the expenses of housing, transportation, and schools for their children—plus an additional $100,000 to cover the cost of taxes on these benefits. Adding in the costs to relocate the employee and his or her family can send the total bill for the assignment up to $1 million. That high cost is one of the reasons employers are investing more in recruiting and training local talent.
• #38: As the expatriate’s assignment nears its end, the human resource department faces a final challenge: helping the expatriate make the transition back to his or her home country. The process of preparing expatriates to return home from a foreign assignment is called repatriation. Culture shock takes place in reverse. The experience has changed the expatriate, and the company’s and expatriate’s home cultures have changed as well. Also, because of differences in economies and compensation levels, a returning expatriate may experience a decline in living standards. The standard of living for an expatriate in many countries includes maid service, a limousine, private schools, and clubs. Companies are increasingly making efforts to help expatriates through this transition. Two activities help the process along: communication and validation. The more the organization keeps in contact with the expatriate, the more effective and satisfied the person will be upon return. Expatriates should work at maintaining important contacts in the company and industry. Communication related to career development before and during the overseas assignment also should help.