International Business

1
International Business
International Business 10e Daniels/Radebaugh/Sulli
van

• Chapter Twenty One
• Human Resource Management

2004 Prentice Hall, Inc
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Chapter Objectives

• Illustrate the importance of HR in international
  business
• Explain unique qualifications of international
  managers
• Evaluate issues that arise when companies
  transfer managers abroad
• Examine companies alternatives for recruitment,
  selection, compensation, development, and
  retention of international managers
• Discuss how national labor markets can affect
  companies optimum methods of production
• Describe country differences in labor policies
  and practices
• Highlight international pressures on MNEs
  relations with labor worldwide
• Examine the effect of international operations on
  collective bargaining

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Factors Making International HR Difficult

• Different labor markets
• Mix of available workers
• Mix of labor costs
• International worker mobility problems
• National management styles and practices
• National orientations
• Strategy and control

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Human Resources in International Business
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Tiered Approach to International Staffing

• Subsidiaries need people who can manage well
  locally
• Headquarters needs people who can coordinate and
  control worldwide and regional operations

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International Managerial Terms

• Locals citizens of the countries in which they
  are working
• Expatriates non-citizen
• Home-country national
• Third-country national

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Corporate Managers Abroad

• Deal at top levels in many countries
• Experience the rigors of foreign travel
• Face difficulties if they have risen entirely
  through domestic divisions
• Usually have much broader duties
• Often isolated with less access to staff
  specialists

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Filling Foreign Managerial Positions

• Typically more difficult to fill than domestic
  positions because
• People dont like to move
• There are legal impediments to using expatriates
• Many are apprehensive about language issues
• Many assignments are open-ended
• Perception that assignment abroad will negatively
  affect family lifestyle
• Living is more expensive abroad

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Reasons to Use Expatriates

• Lack of locally qualified candidates
• Broaden the companies understanding of the
  overall corporate system
• Gain professional/foreign experience
• Can control operations according to headquarters
  preferences
• Need to transfer technology abroad
• Gain valuable educational experience

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Selecting the Proper Expatriate

• Technical competence
• Adaptiveness
• Those needed for self-maintenance
• Those related to development of satisfactory
  relationships
• Flexibility
• Tolerance
• Cognitive skills
• Local acceptance
• Most common reason for failure is inability of
  the expatriates family to adjust

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Cost-of-Living Indexes

• Higher pay for assignments abroad
• Increase compensation when foreign cost is higher
• Do NOT decrease compensation when foreign cost is
  lower
• Remove the differential when the manager is
  repatriated

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Staffing With Locals

• Locals usually cost less than do expatriates
• Understand local
• Language
• Management styles
• Labor policies and practices
• Localized operations
• May be legally required in some cases

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Pre-Employment Training

• Environment-specific information
• Adaptiveness training
• Training by an unaffiliated company abroad

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Allegiance of Expatriate Managers
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Chapter Review

• Illustrate the importance of HR in international
  business
• Explain unique qualifications of international
  managers
• Evaluate issues that arise when companies
  transfer managers abroad
• Examine companies alternatives for recruitment,
  selection, compensation, development, and
  retention of international managers
• Discuss how national labor markets can affect
  companies optimum methods of production
• Describe country differences in labor policies
  and practices
• Highlight international pressures on MNEs
  relations with labor worldwide
• Examine the effect of international operations on
  collective bargaining

21-1