HR in the Global Context - Functional Area 11

Globalization

a web of interconnectedness, or the movement of people (labor) and knowledge (technology) across borders. CHANGES THE WAY WE SEE THE WORLD AROUND US AND HOW WE INTERACT WITH ALL THE DYNAMIC FORCES
- HR needs to distinguish between large-scale forces and t

Moving from Developed to Emerging economies

reasons for moving are:
- Foreign Direct Investment: the investment of foreign assets into domestic structures. Flowing money from developed to emerging economies, directly investing in the infrastructure of industries there. Leading indicator of shift.
-

Foreign Direct Investment

Investment by a multinational corporation in a foreign country's economy. The investment of foreign assets into domestic structures. Flowing money from developed to emerging economies, directly investing in the infrastructure of industries there. Leading

Demographic Dichotomy

younger workforce in emerging economies; aging workforce in developed economies --> CREATES EDUCATIONAL AND SKILLS DIVIDENDS AND DEFICITS

The Diaspora

mass migration from homeland to multiple destinations. Communities often voluntary emigrants bonded by common heritage. Sending money back to your homeland

Reverse Innovation

innovations created for or by emerging markets and then imported to developed markets. EX: $800 portable ECG's made in India that are now being sold in developed countries that are normally using $10,000 ECG systems

Hyperconnectivity

sense that we are instantly and constantly globally connected. 24/7 Workplace: that there is a blurring of public and private lives, harder to achieve a work-life balance while being constantly connected to work with your phone (email, etc.). Data privacy

Role of Global HR

role is to:
- help create the org's global strategy
- align HR processes and activities with that strategy
- enhance communications b/t the org and its stakeholders
- ensure that HR can fulfill its role and demonstrate its value
- adapt to the cultural an

Push factor

organizations have been driven to globalization by competitive factors in their industries. FORCED INTO GLOBALIZATION because of:
- a need for new markets
- increased cost pressures or competition
- decrease in local access to materials and talent
- Restr

Pull factors

globalization that supports' orgs aspirations. WANTING TO GO GLOBAL, ITS ENTICING because:
- greater strategic control
- policies PROMOTING outward foreign investment
- Trade agreements that offer protection of IP

ethnocentric, polycentric, regiocentric, geocentric

Perlmutter's headquarters ORIENTATIONS AND GLOBAL APPROACHES

Ethnocentric

headquarters maintains TIGHT CONTROL over subsidiaries. ONE BEST WAY. ISOLATIONIST, headquarters is in charge of all global enterprises they own

Polycentric

Subsidiaries are allowed a large measure of independence as long as they are profitable. Develop strategies consistent with local business practices and cultures. MANY BEST WAYS

Regiocentric

A philosophy of management whereby the firm tries to blend its own interests with those of the subsidiaries on a regional basis (Europe, North America, APAC). Strategic coordination is high within the region but not as high between the region and headquar

Geocentric

headquarters and subsidiaries form a NETWORK, each CONTRIBUTING SPECIFIC EXPERTISE. TEAM WAY

Global Integration

Emphasizes consistency of approach, standardization of processes, and a common corporate culture across global operations
ADV: economies of scale, integrated value chain activities, serve globally integrated customers, global branding, shared org capabili

Local Responsiveness

emphasizes ADAPTING to the needs of LOCAL markets and allows subsidiaries to develop unique products, structures, and systems.
ADV: better respond to local customer needs or specialized local distribution demands, gain efficiencies from using local substi

People, processes, performance, culture

ways to achieve global integration

GI-LR Matrix

Global Integration - Local Responsiveness
Driven by four factors:
-Market Drivers
-Cost Drivers
-Governmental Drivers
-Competitive Drivers
Vertical Axis is Global Integration
Horizontal Axis is Local Responsiveness
4 STRUCTURES:
- International, multidome

International Strategy

LOW GI, LOW LR
LOW GLOBAL INTEGRATION - in that there is little pressure to increase efficiency.
LOW LOCAL RESPONSIVENESS - in that there is little advantage of tailoring products or services to individual foreign markets AND
- ETHNOCENTRIC ORIENTATION IS

Multidomestic strategy

LOW GI, HIGH LR
- POLYCENTRIC ORIENTATION
- when multinational firms enable individual subsidiaries to compete independently in domestic markets. Fair degree of independence from headquarters.
EX: The organization is a decentralized portfolio of subsidiar

Global Strategy

HIGH GI, LOW LR
- REGIOCENTRIC ORIENTATION
- selling the same standardized product and using the same basic marketing approach in each national market
- Hub and Spoke analogy: the centralized hub makes key strategic decisions and exerts tight but simple c

Transnational Strategy

HIGH GI, HIGH LR.
- GEOCENTRIC ORIENTATION
- strategy that attempts to combine the benefits of a localization strategy (high local responsiveness) with those of a global-standardization strategy (lowest-cost position attainable)
EX: the firm locates its v

Glocalization

an organization with a strong global image but an equally strong local identity. Reflected in the transnational structure of HIGH GI and HIGH LR

Upstream Strategies

Decisions made at HQ-workforce alignment, organizational development, knowledge and experience sharing.
DECISIONS APPLY TO STRATEGY AND COORDINATION AND FOCUS ON STANDARDIZATION OF PROCESSES AND INTEGRATION OF RESOURCES

Downstream strategies

Decisions make at local level. Decisions aim at ADAPTING strategic goals and plans to LOCAL REALITIES (being locally responsive). Strategies for:
- agreements with local workforce groups
- adjustments to standard policies or working conditions (holidays,

Identity Alignment

Extent to which diversity is is embraced in management of people, products/services, and branding. EX: Global fast food chains offer LOCALIZED menu options in addition to standard menu items

Process Alignment

Extent to which underlying operations such as IT, finance, or HR integrate across locations.
EX: business where units have a common platform:
- single technology used in all locales
- same performance metrics in all locales
- unified HR systems in place i

Outsourcing

practice where a company TRANSFERS portions of work to OUTSIDE SUPPLIERS rather than completing internally.
- GOAL OF REDUCING COSTS AND FREEING UP PERSONNEL AND RESOURCES FOR OTHER ACTIVITIES
EX: By outsourcing its customer support service function to an

Offshoring

Moving operations or relocating processes or production to another country, closer to the market Common reasons include:
- LOWER COSTS (lower wages, less expensive facilities)
- CLOSER PROXIMITY TO NECESSARY PRODUCTION RESOURCES
- More favorable economic

Onshoring

Relocation of business processes or production to a lower-cost location inside the SAME COUNTRY as the business. Also may allow employees to work from home - "home shoring

Nearshoring

moving jobs to vendors in countries close to the business's home country.
EX: US businesses might relocate production plants to Mexico or Canada

Strategic-systematic, tactical-reactive

Approaches to global assignments (2)

Strategic-Systematic

Approach global assignments as LONG-TERM investments. Develop future executives with essential global perspectives and experiences to formulate and implement competitive strategies
- Increase the effectiveness of critical coordination and control function

Tactical-Reactive

approach global assignments as SHORT TERM EXPENSES. Focus on a QUICK FIX approach to a short term problem in a foreign operation. Fail to systematically integrate the worldwide values, technology, products, and brand

Global Assignments

globalists, local hires, short-term assignees, international assignees, commuters. just-in-time expatriates

Globalists

Spend their entire careers in international assignments, moving from one locale to another

Local Hires

Hired locally in subsidiary countries (and are also known as HCs, host-country nationals)

Short-term assignees

On assignment for less than a year but more than a few weeks, often without moving the family

International Assignees

Traditional expatriates on full relocation assignments lasting from one to three years

Commuters

travel across a country border for work regularly

Just-in-time expatriates

These are ad hoc or contract expatriates, who are hired from outside the firm just as they are needed and just for one assignment.

Global Assignment guidelines

Guidelines include:
- view assignments as a PROCESS, not an activity --> DEVELOPING PEOPLE
- Recognize and consider ALL DIMENSIONS of the assignment experience
- Conduct thorough and professional assessments of candidates
- Establish and maintain REALISTI

Global Assignment Process

Stage 1: assessment and selection
Stage 2: management and assignee decision
Stage 3: pre-departure preparation
Stage 4: on assignment - providing ongoing support
Stage 5: Completing the assignment
REPATRIATION OR REDEPLOYMENT

Assessment and Selection (stage 1)

develop the selection criteria, involve the right people, choose the best selection tools and methods, complete the assessment and make a recommendation. FIND THE RIGHT PEOPLE

Management and assignee decision (stage 2)

once the candidate has been selected. Manage the details of the transition. Analysis of the costs and benefits of the assignment (providing a RJP), preparation of the assignment plan, candidate either accepts or rejects offer

Pre-departure Preparation (stage 3)

preparing the assignee to relocate. Work on getting VISA AND WORK PERMITS, conduct SECURITY BRIEFINGS, provide CROSS-CULTURAL COUNSELING

On assignment (stage 4)

4 different stages while being on-assignment:
- Honeymoon
- Culture Shock
- Adjustment
- Mastery

Honeymoon

the assignee is on assignment and everything is new and exciting! Lots of support from home and host countries during this early stage of the assignment

Culture shock

on assignment, novelty and enjoyment turn to dissastifaction, as the challenges of living and working abroad become clear. The assignee and family begin to fend for themselves

Adjustment

on assignment. Working and living in the host country gets easier and more familiar. Assignees have learned the norms and patterns of the host country

Mastery

on assignment. After several years of adjustment and continual learning, assignees are able to participate fully and comfortably in the host country

Reverse Culture Shock

Challenges, returning and adjusting to home country after an assignment in a foreign country

Completing the assignment (stage 5)

two aspects of completion: repatriation and redeployment

Repatriation

involves reintegrating the employee back into the home country after an international assignment

Redeployment

redeploying employees after international assignment has ended, either to a new location or a different role in the same location