Emphasizes the norms and practices of the parent company relying on parent country nationals

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b. ethnocentric approach

_____ refers to activities to plan, organize, lead, and control the flow of products, services, finances, and information that passes through a set of entities from a source to the customer.

a. Contingency planning

b. Demand chain management

c. Supply chain management

d. Enterprise resource planning

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Global Business 2e C ha p t e r 15 Managing Human Resources Globally © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

LEARNING OBJECTIVES After studying this chapter, you should be able to: 1. Explain staffing decisions with a focus on expatriates. 2. Identify training and development needs for expatriates and host country nationals. 3. Discuss compensation and performance appraisal issues. 4. List factors that affect labor relations in both home and host countries. 5. Discuss how the institution-based and resource-based views shed additional light on HRM 6. Participate in three leading debates concerning HRM. 7. Draw implications for action.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

HUMAN RESOURCE MANAGEMENT Human resource management (HRM) Activities that attract, select, and manage employees Staffing HRM activities associated with hiring employees and filling positions

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

STAFFING Host country national (HCN) Employees from the host country and often known as locals Expatriate (expat) Individuals working in a foreign country Parent country national (PCN) Employees from the parent country of the multinational enterprise (MNE) who work at its local subsidiary Third country national (TCN) Employees from neither the parent country nor the host country © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

APPROACHES TO STAFFING Ethnocentric approach Emphasizes the norms and practices of the parent company (and the parent country of the MNE) by relying on PCNs Geocentric approach Focuses on finding the most suitable managers; a geocentric approach is colorblind; the color of a manager’s passport does not matter © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

APPROACHES TO STAFFING Polycentric approach Focuses on the norms and practices of the host country Expatriation Leaving one’s home country to work in another country

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

ROLE OF EXPATRIATES Strategists representing the interests of the MNE’s headquarters Daily managers to run operations and to build local capabilities Ambassadors representing headquarters’ interests Trainers for their replacements © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

TRAINING AND DEVELOPMENT Training Specific preparation to do a particular job Development Long-term, broader preparation to improve managerial skills for a better career

? What specific types of training and development do you think you will need to land your ideal job?

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

DEVELOPMENT FOR REPATRIATES Repatriate Process of facilitating the expatriate’s return Repatriation Process of facilitating the expatriate’s return Psychological contract An informal understanding of expected delivery of benefits in the future for current services © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

TRAINING AND DEVELOPMENTS FOR HCNs Training and development needs of HCNs deserve significant attention as well in the ongoing “war for talent”

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

COMPENSATION FOR EXPATS Compensation Salary and benefits Going rate approach Pays expatriates the prevailing (going) rate for comparable positions in a host country Balance sheet approach Balances cost of living differences relative to parent country levels and adds a financial inducement to make the package attractive © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

COMPENSATION FOR HOST COUNTRY NATIONALS Low-level HCNs, especially those in developing countries, have relatively little bargaining power They have jobs at MNE subsidiaries because of their low labor cost—they are willing to accept wage levels substantially lower than those in developed countries

Despite accusations of exploitation MNEs in developing countries typically pay higher wages © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

PERFORMANCE APPRAISAL Performance appraisal How expatriates provide performance appraisal to HCNs and how expatriates are evaluated

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

LABOR RELATIONS Labor relations Firm’s relations with organized labor (unions) in both home and host countries MNEs prefer to deal with nonunionized workforces

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

INSTITUTIONS AND HRM Every country has rules, laws, and regulations governing the do’s and don’ts of HRM. Foreign firms ignoring such rules do so at their own peril Informal rules of the game, embodied in cultures, norms, and values, also assert powerful influence © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

RESOURCES AND HRM Does a particular HR activity add value? Labor-intensive chores such as administering payroll, benefits, and basic training may not add value and can often be outsourced

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

RESOURCES AND HRM Are particular HR activities rare? The relentless drive to learn, share, and adopt best practices may reduce their rarity and thus usefulness

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

RESOURCES AND HRM How imitable are certain HR activities? It is relatively easy to imitate a single practice but it is more difficult to imitate a complex HR system (or architecture)

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

EXPATRIATION VS INPATRIATION Inpatriation Relocating employees of a foreign subsidiary to the MNE’s headquarters for the purposes of filling skill shortages at headquarters and developing a global mindset for such inpatriates

? Which do you think is better: expatriation or inpatriation?

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Which type of international employee is a parent country nationals who works at a foreign subsidiary?

Arnold is considered a parent-national, also known as an expatriate. An expatriate is a citizen of a company's home country working abroad at one of the company's foreign subsidiaries.

Which of the following is an advantage of staffing parent country nationals PCNs in top positions of a company group of answer choices?

Which of the following is an advantage of staffing parent-country nationals (PCNs) in top positions of a company? Control by headquarters is facilitated.

Are non native employees who work and reside in a foreign country?

Expatriates. U.S. companies have historically defined expatriates as employees who are asked to work outside their home countries for a period of time with the intent of eventually returning to their home countries.

Which of the following best describes a polycentric approach in staffing?

Which of the following best describes a polycentric approach in staffing? It emphasizes the norms and practices of the host country by relying on host-country nationals (HCNs).