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Human Resource Management: The Global Environment

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Max Neubert

on 13 November 2014

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Transcript of Human Resource Management: The Global Environment

Best person available for a position will be hired
The Global Environment
Human Resource Management
Felix Falkenhof & Max Neubert
Key Points
Cultural Environment

Political and Legal Environment

Staffing Models

HRM - International Perspective

HRM - Domestic Perspective

International Transfers and Assignments

Case Study: Malaysia Training Academy
Cultural Environment
A country's culture can be defined as a set of
Political & Legal Environment
HRM -
International Perspective
HR Managers must customize their hiring, firing, training and compensation programs due to factors such as:

Differences in culture
Levels of economic development
Legal systems

HRM - Domestic Perspective
3 sets of domestic issues

Local recruiting and selection
Local training
Local compensation
International Transfers and Assignments

A.Hartrodt (GmbH & Co) KG
Malaysia Training Academy
Cultural & Legal Differences


U.S.

Discrimination on the basis of gender is illegal (Civil Rights Act)


Saudi Arabia

Discrimination on the basis of gender is allowed and generally accepted

Recruit and Select
Source of employees

Host country nationals (local employees)
Home country nationals (expatriates)
Third country nationals (neither nor)

Lower level jobs - take a local!

Low labor costs
Minimal skill requirements
Reasonable local supply of labor

Situation is changing!

25 years ago

Local labour - hourly wages only!
Singapore and other developing countries

Significant investments in human capital
U.S. takes advantage

Hiring of locals
Transfer them to the USA for training
Return to home country

Receive a management position

A.Hartrodt: HQ Management Training

Employees from different countries get trained in the HQ in Hamburg in topics such as...

Finance
Controlling
HRM


Large pool of well-aducated, highly motivated locals

Give me a management position!
Training & Development
Corporate executives chosen for overseas assignments

Cross-cultural training


Host Country Nationals

Training programs tailored to the educational levels
Compensation
How to compensate executives accepting an international assignment?

Higher costs of living
Reduction in quality of life
Unhappiness / stress due to separation

Loss of compensation / decrease in standard of living should be avoided


Corporate Strategies
Values
Languages
Beliefs
Cultural differences can directly affect business practices in international situations


Ethics
Set of challenges for HR Managers


Exporting
Licensing


Direct foreign investments
Joint venture / strategic alliance


Potential for misunderstandings, miscommunication, and similar problems.
Local Compensation Issues
Variation of lifestyles, standards of living and regulations

HR Managers must look beyond hourly wages


Local Recruiting &
Selection
Local Training &
Development
Understanding the training and development needs of the host-country workforce

Highly industrialized markets

Small amount of firm specific training


Relatively underdeveloped markets

Training and development needs are much more extensive
Systematic study of national values by Geert Hofstede

Power Distance
Individualism versus Collectivism
Masculinity versus Femininity
Uncertainty Avoidance
Time Orientation
languages

values

beliefs

ethics
Establish a recruiting & selection plan

Primary source of labor
Labor force skills and talents
Training requirements
Host Country
Nationals
Home- & Third Country
Nationals
VS
HQ
Production
High labor costs
e.g. Germany
e.g. Malaysia
Low labor costs
Lower labor costs
Productivity of the labor force might be lower

Investments in additional training & development are required

Political and legal issues
Government Stability
Incentives
Controls
Staying in power against opposing factions
Permanence of policies toward business
Comprehensibility and Predictability
Government Instability
Endangering employees
Risks for the company
Tax breaks

Reduced interest rates on loans

Subsidies

Relaxation of international trade controls

Guaranteed labor contracts
Several controls have to be considered in international business

Tariff
Quota
Trade control against global species extinction
Control of international travel
Minimum percentage of local employees
Corporate International Strategy and Expatriates
Repatriation
Compensating Expatriates
Training Expatriates
Corporate International Strategy and Expatriates
Selecting Expatriates
Training Expatriates
Compensation
Repatriation
Existing social benefits by government?
Expatriate
Manager
=
Key player in
knowledge-transfer process
Risk of "opportunistic
behavior" depends on the
corporate international strategy
Age and seniority-based wages or skill based wages?

Focus on individual or collective performance?

International
Strategy
One strategy adapted for local needs
Expatriates only capable of making some decisions


Low risk for opportunistic behaviour
Existing governmental regulations?

Maternity protection
Severance payments
Bonuses



Global Strategy
One strategy for all
Expatriates not capable of making important decisions



Lowest risk for opportunistic behaviour
Transnational
Strategy

High transfer with much independence
Expatriates is capable of most decisions


High risk for opportunistic behaviour
Multidomestic
Strategy
Strategy developed in each country
All decision making is
decentralized


Highest risk for opportunistic behaviour
Providing
Gaining
Sent abroad
Help overseas operations
Provide technical expertise
Required Skills
Technical skills

Organizational skills

language skills
Sent abroad
Gain
expertise
Required Skills
Adaptability

Language skills

Physical & emotional health

Independence and self-reliance

Experience and education
Selecting Expatriates
Sources of Recruitment
Own firm
Other organizations
Colleges
Criteria for Selecting
Managerial Competence
Pool of qualified applicants
Language Skills
Adaptability
Expatriate failure
Extreme costs
Training
Types of
Training
Simple Training

Language
training

History teaching

Technical traininig
Complex Training

Cross-cultural training
Short-term Assignments

Depend on

Managerial talent
Standard of living
Occupational status
Government regulations
Long-term Assignments
Salary
Housing
Medical treatment
Travel costs
Salary
Housing
Medical treatment
Education
Travel costs
Club membership
Social resettlement
Less real income
Social network
Professional
Issues
Loss of status

Poor career opportunities
Personal
Issues
Less real income

Different country practices

Social network
"The most valuable asset of a freight forwarding company is its staff; we have to develop our staff for being able to assume responsible functions within the organization"
Purpose
Understand foreign cultures and business environments


Maintaining corporate identity
Motivation for the staff
Language improvements
IT / Accounting/ CRM programs require a common knowledge base
Cultural exchange



Target group
"The idea of the training academy is to target young employees who have proven they have the eagerness to learn more and to assume job functions with a higher responsibility within the group at a later stage"

Training schedule
Staffing Models
Choosing among:

Home-country nationals

Host-country nationals

Third-country nationals
Ethnocentric Staffing Model
Geocentric Staffing Model
Home-country Host-country
individuals individuals
Polycentric Staffing Model
Host-country Home-country
individuals individuals

A.Hartrodt (GmbH & Co) KG
Malaysia Training Academy
Why do we need a training academy?
Who shall be trained
What kind of training shall be provided?
Training schedule
Budget
Home-country nationals
Host-country nationals
Third-country nationals
=
=
Available to staff working in all departments, such as finance/ accounts, operations and sales

The ideal age should be between 22 and 28 years

Basic English knowledge required
Minimum of 18 months within an a.hartrodt group company...

Trained on his job for a minimum of 2 years already

Deepen an existing knowledge base, but not to create a new one


Kind of Training
On the job training
Language classes
Extra curricular activities / training


Understand global and local principals / environments

Financial reporting
Sales staff evaluation
Operational software reporting as management tool
Usage of CRM programs

Customs visits
Shipping line visits
Shipping port visits
Airport visits
Warehouse visits
Private classes shall be given to the candidates on daily basis in

English
Bahasa Melayu
German




On The Job Training
Language classes

Additional training shall be provided in areas of interest such as

Computer classes
Sports
Cultural activities

On request additional programs are offered:

Weekend outings
Trips to other SEA countries
Local tours to places of interest
Extra curricular activities/ training
>
>
Internationally guided
Child labor
Host-country
guided
Home-country guided
No interest payments in Saudi Arabia
Budget
Preparation & Reintegration
Knowledge transfer
Full transcript