2-IHRM-2

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International Human Resource

Management

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Copyright 2003-2006, Chris Chan 2

Strategies of international, multinational,

global & transnational organizations

Internationalcompany transports its business

outside home country; each of its operations is areplication of the company's domestic experience;

structured geographically; and involves subsidiary

general managers

Companies offering multiple products often find itchallenging to remain organized e.g. need to have a

common information systems for accounting,

financial and management controls, and marketing.Most evolve to become multinational companies

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Multinationalcompany grows and defines its

business on a worldwide basis, but continues to

allocate its resources among national or regional

areas to maximize the total.

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Globalorganizations treat the entire world

as though it were one large country; may be

the entire company or one or more of its

product lines; may operate with a mixture of

two or more organizational structure

simultaneously.

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Transnational organization - Use specialized

facilities to permit local responsiveness; more

complex coordination mechanism to provide

global integration

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Global efficiency and local responsiveness of

different types of firms

Global Transnational

International Multinational

Global

efficiency

HighLow

High

Local responsiveness

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Parent-country Nationals

Advantages

Control and co-ordination by

HQ is maintained.

Promising managers getinternational experience.

PCNs may be the best

people for the job.

Assurance that the

subsidiary will comply withcompany objectives policies

etc.

Disadvantages

HCNs promotion

opportunities are limited.

Adaptation to host country

may take a long time.

PCNs may impose an

inappropriate HQ style.

Compensation differences

between PCNs and HCNs

may cause problems.

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Host-country NationalsAdvantages

No problems with

language and culture.

Reduced hiring costs.

No work permits required. Continuity of management

improves since HCNs stay

longer in positions.

Govt. policy may force

hiring of HCNs. Promotional opportunities

not limited - so higher

morale among HCNs.

Disadvantages

HQ may have less controlover operations.

HCNs may still havelimited career

opportunities outside thesubsidiary.

Hiring HCNs limitsopportunities for PCNs togain overseas experience.

Hiring HCNs mayencourage a federation ofdisintegrated nationalunits rather than oneintegrated global unit.

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Third-country Nationals

Advantages

Salary and

compensation may be

lower than for PCNs.

May be more familiar

with host country than

the PCNs.

Disadvantages Transfers must

consider nationalanimosities.

Host governmentmay resent TCNs asmuch as PCNs.

TCNs may not complywith HQ style of

management. TCNs may not want to

return afterassignment.

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International Training and

Development Empirical literature give guarded support to the proposition

that cross cultural training has a positive impact on crosscultural effectiveness.

Cultural awareness training is not just for the employee

going overseas. It has numerous applications domesticallythat will increase organizational effectiveness. Findingsindicate that it should be a regular part of personnel trainingespecially management development. The realities of amore pluralistic society and international business make this

a necessity.

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International Compensation

If compensation is high then problems may

be encountered on return to head office.

If compensation is notadequate then there

may be no incentive to go for the

international assignment given the hardships

that are usually involved in doing so.

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International Compensation

Expatriation Premium

Cost of Living Allowance

Swamp Pay Allowance

Shelter Allowance

Educational Allowance

Home Leave

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Repatriation

Virtually all repatriated personnel experienced

some personal difficulty in reintegrating on

return home. The main complaints were loss

of status loss of autonomy lack of recognition

of the value of the experience and lack of

career direction.

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Repatriation: Reverse Culture-

shockJOB RELATED FACTORS

Out of sight out of mind

International experience

devalued

Loss of status and pay relativelypeaking

Changes in the HQ

SOCIAL FACTORS

Expat assignment - different typeof social interaction (going froma very close expat community towhere everyone is very busy

with their own lives) Problems of spouse returning to

the workforce

Lack of peer support forteenagers

2-IHRM-2

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