Presented By

Jyoti Verma

Strategic Role In Global

Environment

We are living in a vastly altered world where societal expectations of

businesses have changed dramatically. At the cornerstone of the discourses

dealing with human resources (HR), corporate social responsibility, corporate

governance, and sustainability, are humans—their rights, their aspirations, and

advancement. Humans are pivotal to both global corporations‟ survival and

the wealth of nations. Never before has the pressure on organizations, to

ensure that the basic rights of humans are protected and respected both within

them and the communities they operate in, been greater. The purpose of this

paper will be to review current worldwide trends and practices of leading

corporations (profit and non-profit) in their management of human resources

and social responsibility. An examination of the responsibilities of these

global corporations will be made, and recommendations for reconciling these

dual responsibilities and reshaping global HR practices will be presented.

International trade is growing at a more rapid

rate than world output

Foreign direct investment (FDI) flows have set

record levels in recent years

Cross-border inter-firm agreements have risen

dramatically during the last 20 years

Social, economic, and political developments

throughout the world have changed the way

global business is conducted.

Global strategic HRM augments the

Importance of resource flexibility,

Strategic leadership,

Human capital,

Technological and manufacturing advances

Cooperative synergies between organizational

culture and structure

The report examines the changing roles the human

resource (HR) function plays in a globally competitive marketplace and identifies the challenges of:

Investigate how domestic and international

companies conduct HR practices around the

world.

Determine the top HR priorities for each

organization type.

Determine the challenges that organizations

face when trying to globalize their HR

function, practices and policies to service

staffing need abroad.

Determine what organizations are doing to

institute a consistent corporate culture

across all locations/offices.

Creating organization structures capable of

balancing centralized home office control wit

adequate autonomy.

International

Human Resource

Management

Cultural

Factors

Legal and Industrial

Relations Factors

Economic

Systems

Major Factors Affect IHRM

International

Human Resource

Management

Training and

Development

Practices

Use of Pay

Incentives

Purpose of

Performance

Appraisal

Personnel

Selection

Procedure

International companies face

many challenges when try to

make HR Practices consistent

across all the locations/offices.

Top Three challenges included:

Variations in social, political and economic

circumstances.

Different locations/offices have their own

way of doing things are resistant to change.

The perceived value of the HR function

varies across locations/offices.

Relational competence to navigate the global

network knowledge base through consensus

building, accountability charting, conflict

management, performance contracting and

innovation management.

Managerial competence to design creative

human resource allocations, negotiate

concerted strategies, and structure

multiparty relationships.

Motivational leadership in incentivizing units

to demonstrate and share skills at joint human

resource management problem solving.

Cross-functional competence in auditing

managerial loss of control and difficulties in

assessing network accountability in terms of

human resource management adaptations.

Developed a long –

term HR plan to ensure

alignment of HR

strategies/objectives

with corporate

objectives.

Created centralized

reporting relationships

around the globe.

Created

centralized

reporting

relationships around

the globe.

Standardized

assessment,

development, and

compensation

practices.

Standardized

assessment,

development, and

compensation

practices.

Introduced practices

to regions around the

globe and allowed the

HR function in each

region the autonomy to

do job.

Introduced practices

to regions around the

globe and allowed the

HR function in each

region the autonomy to

do job.

Created global

policies/processes for

data management,

performance

management,

compensation,

education, and

development.

Tied regional

accountability to

performance

management.

Shared HR best

practices used in

certain

locations with all

other locations.

Developed an HR

mission statement.

Finding, developing, and retaining global

leaders tops the priority list of international

companies. International, or expatriate,

assignments are often used as a way to

develop the talent of global leaders.

Host Country Nationals (HCNs)

employees from the local population.

referred to as local nationals.

employees sent from the country in

which the organization is headquartered

referred to as expatriates.

Host Country Nationals (HCNs)

Third Country Nationals (TCNs)

employees from a country other than where the parent organization’s headquarters or operations are located

International Staffing Policy

Ethnocentric

Polycentric

Geocentric

Individual Self

efficacy Relation skill

Logistical Help

Inability to Cope

with Overseas

Responsibilities

Lack of

Cultural Skills

Why Expatriate

Assignments Fail

Personality

Personal

Intentions

Family

Pressures

Realistic Previews

Careful Screening

Cultural and Language Training

Improved Benefits Packages

Improved OrientationHelping Expatriate

Assignments Succeed

Interviews

For face-to-face interviews found that

interviewers had to be trained in cross-cultural

differences.

Adaptability Screening

Assessing the assignee’s (and spouse’s) probable success

in handling the foreign transfer.

Overseas Assignment Inventory

A test that identifies the characteristics and

attitudes international assignment candidates

should have.

Realistic Previews

The problems to expect in the new job, as well as the

cultural benefits, problems, and idiosyncrasies of the

country.

Psychological Testing

Psychological tests may be seen as a way of

avoiding the subjective bias of other options. I

The greater international mobility of candidates

has increased the demand for tests to be used

on job applicants from different countries.

High Probability for Success

Strong analytical skills

Good language skills

Strong desire to work overseas

Specific knowledge of overseas

culture

Well-adjusted family situation

Complete support of spouse

Behavioral flexibility

Adaptability and open-

mindedness

Good relational ability

Good stress management skills

Low Probability for Success

Uncertain technical competency

Weak language skills

Unsure about going overseas

Family problems

Low spouse support

Behavioral rigidity

Inadaptability – closed to new

ideas

Poor relational ability

Weak stress management skills

Culture Shock – the frustration and confusion that

result from being constantly subjected to strange

and unfamiliar cues about what to do and how to

get it done

Does not typically occur during the earliest days of an

overseas assignment

Communicated to all locations about a common

corporate culture.

Managerial issues like the leadership of the

organization is dispersed throughout the global

system top management must recognize the

impact on the organizational hierarchy.

The top management of the organization must

recognize that strategic initiatives may be

generated by subsidiaries and shared with other

subsidiaries rather than having to come from

headquarters.

The governance and control mechanism of the

global network organization will need to be

modified to allow localized decision-making.

The selection process for subsidiary

management must be modified to align it with

the role of the key subsidiary managers and the

modified independence of the subsidiaries

Managers who are host country nationals have

distinct advantages over expatriates

cultural sensitivity

understanding of local employees’ motivations and

needs

Careful recruitment, selection, and training of

HCNs can reduce or eliminate the potential

problems with using HCNs

Cultural awareness

Preliminary Visit

HCN Training

Practical Assistance

Language Training

Development through

International assignment

Management Development

Organizational Development

Individual Development

International staff and

multinational Teams

While developing international compensation

policies, a firms seeks to satisfy several

objectives:

Policy should be consistent

with the overall strategy,

structure and business need of

the multinational

Policy must work to attract

and retain staff in areas of

greatest need and opportunities

Policy should facilitate the

transfer of international

employees in cost effective

manner

The policy must give due

consideration to equity and

ease of administrations.

The “Balance Sheet Approach”

Home-country groups of expenses—income taxes,

housing, goods and services, and discretionary

expenses—are the focus of attention.

The employer estimates what each of these four

expenses is in the expatriate’s home country, and

what each will be in the host country.

The employer then pays any differences such as

additional income taxes or housing expenses.

Local Going Rate Approach

This can be desirable in high-paying

countries such as the US of Switzerland

The market rate is also preferred when the

assignment is likely to be long term or

permanent.

The main advantage of this method that it

is administratively simpler than the balance

sheet.

Hybrid Approach

This approach refer variation of

the greater of home or host

system where a balance sheet is

compared to local market rate

equivalent.

Industry-Wide

Centralization

Content and

Scope of

Bargaining

Employer

Organization

Multiple Union

Recognition

Characteristics of

European Labor Relations

MNCs faced with the demands of

integration and control, have to always

decide which is most important –the

company as a whole or each

subsidiary’s short term profitability.

Unpredictable Global Environment.

Time and distance separation.

Variability in level of maturity.

Communication Gap.

Lack of technical knowledge.

Lack of domestic management's

international experience.

Operational language used in the firm

Cultural ‘distance’ based often on the

region of the world.

Stability of the factors affecting the

expatriate's performance.

Be objective in evaluation.

Criteria for evaluation of performance.

Flexibility in structure strategy to

implement change.

Some vital criteria for successful

performance for manager abroad are:

Inter-personal understanding and

respect.

Empowerment to share information

and delegate resposibility.

Team support to help employees

cooperate.

Versatility to adjust in new

environment.

Strategic thinking to grasp changing

environment and market possibilities.

Relationship management to influence

and seek the cooperation of customer,

trade union, government institutions

and lobby activities.

Business practices that are considered

unethical or illegal in the U.S. might be

considered part of the national conduct of

business in other countries

Foreign Corrupt Practices Act of 1977

(FCPA)

Employment discrimination

Global human resource management

is an important component of an

organization’s success in a global

marketplace

Organizations must be sure that their

HRM policies can accommodate a

culturally diverse workforce