Global Human Resource Management

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					Global Human Resource Management
                     Human Resource Management

 Human resource management refers to the activities an organization carries out to
  utilize its human resource effectively.
     Staffing Policy
     Management training and development
     Performance appraisal
     Compensation policy
     Labor relations

 An expatriate manager is a citizen of one country who is working abroad in one of the
  firm’s subsidiaries.
 Coca-Cola sees the HRM function as a vital link in the implementation of its strategic
  goal of thinking globally and acting locally.
                        Human Resource Management

 Four strategies pursued by international business

      Multidomestic firms try to create value by emphasizing local responsiveness
      International firms try to create value by transferring core competencies overseas
      Global firms try to create value by realizing experience curve and location economies.
      Transnational firms try to create value by doing all these things simultatneously.

 “Think globally, act locally” is a good definition of a transnational strategy
                        Human Resource Management

 Staffing Policy is concerned with the selection of employees for particular jobs.

      Select individuals who have the skills required to do particular jobs.
      Develop and promote corporate culture(organization’s norms and value system)
      Transnational and global firms need strong unifying corporate culture.
      International firms have lower needs and multidomestic firms have lowest needs.

 GE which is positioned toward the transnational end of the strategic spectrum is not
  just concerned with hiring people who have the skills required for performing particular
  jobs; it also wants to hire individuals whose behavioral styles, beliefs and value
  systems are consistent with those of GE.
       Three types of staffing policy in international business

 The ethnocentric staffing policy is one in which all key management positions are
   filled by parent country nationals(inernational firms e.g. P&G, Matsushita, Toyota &

      A lack of qualified individuals in the host country to fill senior management position
      The best way to maintain a unified corporate culure
      The best way to create value by transferring core competencies is to transfer parent company
       nationals who have knowledge of that competency to the foreign operation.

 This limits advancement opportunities for host country nationals and this can lead to
  resentment, lower productivity and increased turnover.
 The firms fail to understand host country cultural differences that require different
  approaches to marketing and management.
       Three types of staffing policy in international business

 The polycentric staffing policy requires host-country nationals to be recruited to
   manage subsidiaries, while parent-country nationals occupy key positions at corporate
   headquarters(multidomestic firms).

      The firm is less likely to suffer from cultural myopia. Host-country managers are unlikely to
       make the mistakes arising from cultural misunderstandings that expatriate managers are
       vulnerable to .
      It is less expensive to implement ; using them can reduce the costs of value creation.

 Host-country nationals have limited opportunities to gain experience outside their own
 Language barriers, national loyalties and a range of cultural differences may isolate the
  headquarters staff from the various foreign subsidiaries.
       Three types of staffing policy in international business

 The geocentric staffing policy seeks the best people for key jobs through the
  organization, regardless of nationals(global and transnational firms).

      The best use of human resources.
      This enables the firm to build a cadre of international executives who feel at home working in
       a number of different cultures. The creation of such a cadre may be a critical first step toward
       building a strong unifying corporate culture and an informal management network. Firms
       pursuing a geocentric staffing policy may be better able to create value from the pursuit of
       experience curve and location economies and from the multidirectional transfer of core

 Immigration laws require extensive documentation.
 This policy can be very expensive to implement ; increase training cost, relocation cost
  and the need for a compensation structure.

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