Importance of HRMGreat people are a major resource in sucessful MNEs | Need to get right person in right job at right time for right $$$ |
Types of expatriatesHome country nationals | Third-country nationals |
Geocentric benefitsManagers may move between countries and cultures without losing their personal effectiveness | Difficult to develop and maintain |
How MNE HRMExpatriate selection | Screening execs re: desire and potential for foreign assignment. Screen for tech exp, ability to adapt (self-monitoring, social skills, sensitivity) leadership. | Expatriate failure | Manager goes home due to bad results, rate of failure is droping, higher in emergin econs (India / China). Cost can be high | Expat failure reasons | Often failure of spouse / family to adapt | Preventing failure | Prep programs for general country understanding, cultural sensitivity, practical skills | Comp packages should | Motivate, maintain standard of living, reflect responsibilities, ensure after tax $$$ won't fall, maintain $$ equity among peers, compete with industry packages, be easy to admin | Repatriation | reintegrating the expatriate into the home country. Can pose work, $$, social problems. Find right job for returning manager. |
Types of compensation plansBalance sheet approach | Equals $$$ so expats have same purchasing power / living standard | Typical package includes | Base salary, foreign service allowance, fringe benefits, tax differentials |
| | Define HRMActivities to staff a company | Difficult in international companies because of environmental, strategic and org challenges |
Trends in expatriate assignmentsTime | < 1 year | Age | Trend to younger and older workers | Gender | Mostly male but female is rising |
Polycentric: Key BenefitsEconomical | Local hire usually requires less $$$ than an expat | Nationalism | Host countries prefer local managers | Management development | Giving top jobs to locals attracts and motivates local workers | Employee Morale | Local workers like to work for local managers for many social and cultural reasons | Expat failure | Expat failure can be $$$ and negative exp. Ceteris paribus locals less likely to fail | Local innovation | Locals understand local markets so a sense of innovation ops |
PolycentricAssumptions | adapts to differences between home & host, HQ strategy DM, local adapts to local market | Advantages | Acknowledges unique merits of country, least $$ staffing, makes host govt and staff happy | Drawbacks | Complicates controlling and coordinating, isolates ops, reduces incentive for global perspective | Appropriate if | Multidomestic |
| | HRM strategyGreat HR = high productivity, comp advantage, value creation | Company strategy and HRM should be integrated |
3 types of staff policyEthnocentric | Fill key positions with home country nationals | Polycentric | Host country nationals | Geocentric | Best people for key jobs regardless of nationality |
Ethnocentric: Key BenefitsCommand & control | Expatriates are familiar with home country so can be counted upon to transfer processes | Local talent gaps | If shortage locally | Social integration | Symbolically and operationally integrates policies, fortifies culture | Local implementation | Expats offset breakdown of policies in transfer | High turnover locals | Expats have lower liklihood of defecting to a local company, Reduces IP loss. | Management development | Expat hard earned exp boosts knowledge and promotes exec leadership |
EthnocentricAssumptions | Presumes ideals, values and proactices superior, HQ are DM locals follow orders | Advantages | Leverages core competance, developes MGMT team | Drawbacks | Superiority complex, arrogance, cultural illiteracy, may overlook local innovation ops | Appropriate if | International |
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https://www.speedwell.com.au
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