2. Culture Yk
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Transcript of 2. Culture Yk
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7/30/2019 2. Culture Yk
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Cross Cultural ManagementCulture
Session 2
Yoginder Kataria
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Brain Teaser 1
Imagine you are a Manager for a domestic company
that is planning to extend its operations
internationally. You are responsible for handling the
CCM implications.
What questions should you be asking the senior
management team?
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Why CCM?
Multinationals are becoming
increasingly dominant.
Technological changes make it easier to
spread the business across the globe.
Globalization.
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IHRM
IHRM is
Human resource management issues,
functions and policies and practices that
result from the strategic activities of
multinational enterprises and that
impact on the international concerns
and goals of those enterprises. Schuler, Dowling and De Cieri, 1993
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What does IHRM add into the
Traditional Framework of HRM?
Types of employees Within and cross-cultural workforce diversity
Coordination
Communication
Human resource activities Procurement
Allocation
Utilization of human resources
Nation/country categories where firms expand and operate
Host country Parent country
Third country
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Adapted from PV Morgan
A Model ofIHRM
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Some Terms Defined
Host Country National (HCN): Belongs to the
Country where the subsidiary is located
Home Country National (HCN): Belongs to theCountry where the firm has its headquartersalso might be calledParent Country National (PCN)
Third Country Nationals (TCN): Belongs to
any other country and is employed by the
firm
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HRM emphases in 7 European countriesRole of HRM Den Fr Ger Net Sw UK
Comp Ad
SHRM
Decentralization of HR activities
Integration of HR functions
Individualization of emprelationship
Clark, T. and Pugh, D. (2000). Similarities and differences in European
conceptions of human resource management.
International Studies of Management & Organizations, 29(4), 84-100.
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Evidence of Trends
Evidence that increasing responsibility is
being devolved (decentralize) to the line in
Europe.
Recruitment and selection, health and
safety, and workforce expansion/reduction
would go to the line; whilst ER and training
would stay with HR.
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The IHR Department
Ensure IHR is involved in global strategy formulation for the
firm
Ensure managers have the necessary competence to
contribute to the global management of the firm
Prepare issues/concepts for inclusion in global strategies
Prepare a framework to ensure global management
are aware of the growing complexity of the business
Distribute and share the responsibilities for IHR
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Operation of the Department
IHR will be linked to business at both strategic and
operational level
IHR will shift from being a purely operational function to one
of strategic input and operational implementation
IHR will shift from doing HR, to advising line managers HRissues involved with their teams
IHR will focus on internal and external issues
Staffing the Department:
Fewer specialists, more generalists
Greater business focus; managers with line experience
Experience of global working, and global teams
Development of coaching and counselling skills
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HRM functions in a global setting
Recruitment methods
Headquarters vs. local practices
Selection criteria:
Ability, education, experience, . . . (achievement focus)
Age, gender, religion, sex, . . . (ascriptive focus)
Performance evaluation Centralized or decentralized policies & practices
Compensation & benefits
Local market conditions vs. common compensation
Labour relation strategies Centralised or decentralised
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Glossary of Terms
Home country where a firm is headquartered
Host country - where a subsidiary may be located
Other country may be a source of labour or
technology
PCNs parent country nationals
HCNs host country nationals
TCNs third country nationals
MNEmultinational enterprise
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IHRM
Ethnocentric (parent control)
Polycentric (Keeping PCNs and HCNs
separate)
Regiocentric (Asia-Pacific, Eastern
European regions)
Geocentric (pick talent from wherever
possible)
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Four Approaches to International
HRMPerlmutter (1969); Dowling and Welch (2004)
The ethnocentric HR orientation- All key positions in
the host country are occupied by parent company
nationals. Ensures tight control and good
communication. Typically deployed during the early
stages in establishing a new business presence.
The polycentric orientation- Host country nationals
manage all operations in their own country. Thishelps avoid intercultural management conflict and
also promotes the corporations image.
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Four Approaches to IHRM/cont
The geocentric orientation- A meritocratic approach.
The best people are deployed throughout the
organisation and may be sourced from any region of
the world. This enables corporations to build
international executive teams.
The regiocentric orientation- Results in staff being
developed and deployed within specific regions ofthe world eg. Europe, S.E. Asia etc.
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Brain Teaser 2
What are the potential disadvantages for each of these
approaches?
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Schulers integrative framework for strategic HRM in MNEs
Schuler et al (1993)
SIHRM issues
Interunit linkages
Internal operations
Local sensitivity
Strategic fit
SIHRM
Functions
Orientation
Resources
Location
SIHRM Policy
Staffing
Appraising
Compensating
Developing
MNE concerns
& Goals
Competitiveness
Efficiency
Local responsivenessFlexibility
Learning & transfer
Endogeneous factors
Structure of international operations
HQ international orientation
Competitive strategy
Experience in managing international operations
Strategic MNE
Components
Interunit linkages
Internal operations
Exogenous factors
Industry characteristics
Country/regional characteristics
See Fig 31 BS&V
pp 215
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IHRM practices
Compensation: Seniority-based, team-based vsMerit-based, individual-based
Selection: De-emphasize experience?
Appraisal: Low (collectivist) to High(individualistic)
Training & development vs Outsourcing (e.g.US)
SHRM: low cost and differentiation strategies(Asia) to no linkage (Mexico)Von Glinow, M.A., Drost, E.A. and Teagarden, M.B. (2002). Converging on IHRM bestpractices: Lessons learned from a globally distributed consortium on theory and practice.Human Resource Management, 41(1), 123-140.
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Thank you