Chap016 - Chapter 16 - Global Human Resource Management...

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Chapter 16 - Global Human Resource Management Global Human Resource Management INTRODUCTION A) Human resource management (HRM) refers to the activities an organization carries out to utilize its human resources effectively. These activities include determining the firm's human resource strategy, staffing, performance evaluation, management development, compensation, and labor relations. B) The role of HRM is complex enough in a purely domestic firm, but it is more complex in an international business, where staffing, management development, performance evaluation, and compensation activities are complicated by the profound differences between countries in labor markets, culture, legal systems, economic systems, and the like. C) The HRM function must also deal with a host of issues related to expatriate managers (citizens of one country working abroad). THE STRATEGIC ROLE OF INTERNATIONAL HRM A) Success in international business requires that HRM policies be congruent with the firm’s strategy (see Figure 16.1 in the text). STAFFING POLICY A) Staffing policy is concerned with the selection of employees who have the skills required to perform a particular job. Staffing policy can be viewed as a major tool for developing and promoting a corporate culture (the organization’s norms and value systems). Types of Staffing Polices B) Research has identified three main approaches to staffing policy within international businesses. These have been characterized as an ethnocentric approach, a polycentric approach and a geocentric approach. The Ethnocentric Approach C) An ethnocentric approach to staffing policy is one in which key management positions in an international business are filled by parent-country nationals. The policy makes most sense for firms pursuing an international strategy. D) Firms pursue an ethnocentric staffing policy for three reasons: First, the firm may believe there is a lack of qualified individuals in the host country to fill senior management positions. Second, the firm may see an ethnocentric staffing policy as the best way to maintain a unified corporate culture. Third, if the firm is trying to create value by transferring core competencies to a foreign operation, as firms pursuing an international strategy are, it may believe that the best way to do this is to transfer parent country nationals who have knowledge of that competency to the foreign operation. 16-1
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Chapter 16 - Global Human Resource Management E) Despite the rationale for pursing an ethnocentric staffing policy, the policy is now on the wane in most international businesses. There are two reasons for this. First, an ethnocentric staffing policy limits advancement opportunities for host country nationals. Second, an ethnocentric policy can lead to cultural myopia (a failure to understand host-country cultural differences that require different approaches to marketing and management). The Polycentric Approach
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Chap016 - Chapter 16 - Global Human Resource Management...

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