International Human Resource Management - Assignment Example

International human resource management Question one The main similarities and differences between domestic and international HRM Similarities Both domestic and international HRM involve the management of people resources. Both undertake manpower planning, recruitment, training and compensation of the human resources. Both domestic and international HRM involve employee motivation, job analysis and performance evaluation (Dowling, Festing and Engle 2). Differences Domestic and international HRM differ in the complexity since international HRM involves employing employees from different countries and operating in various countries.

International HRM is complex since it includes broader external influence and risk exposure. International HRM engages in some activities that are not necessary for domestic HRM. Such activities include international relocation and international taxation. International HRM is also concerned with administration services for expatriates and language translation services. Some common activities include provision of immigration and travel services (Dowling, Festing and Engle 5). Question 2 Definition of terms Host-country national (HCN)-is an employee who is a citizen of the country in which the multinational organization has a subsidiary or plant facilities.

The multinational is usually headquartered in a different country. Parent- country national (PCN) - is an employee who is a citizen of the parent country (where multinational organization has it current headquarters). The employee may be posted to overseas country as an expatriate. Third-country national- Are employees who are not citizens of either the host country (where multinational organization has a subsidiary) or the parent country (where the multinational is currently headquartered) (Dowling, Festing and Engle 5).

Question 3 Expatriate-Expatriate is an employee who is currently working and residing in a foreign country temporarily due to his job. Question 4 Impact of culture on IHRM- IHRM involves management of people from different countries. Employees from different countries have different cultural values, beliefs and traditions. IHRM should appreciate the differences in employee behavior patterns, attitudes towards work and values. Question 5 Major structuring issues faced by multinationals on parent-country headquarters and subsidiaries- some of the structuring issues include the need to align the communication and reporting channels of the parent country headquarter and subsidiaries.

Another structuring issue is the need to integrate the subsidiary culture and parent country headquarters culture. Other issues include the need to maintain management and supervisory relationships. Question 6 Problems during cross-border merger/acquisition- some of the problems include employee resistance due to differences in management styles of the two organizations. Another problem is the continuity of leadership and quality of the communication process during integration. Other problems include employee retention and voluntary job loss.

Task and cultural integration is also a major challenge. Question 7 Disadvantages of ethnocentric approach to management and staffing subsidiaries- it leads to decline in employee morale and productivity since host country nationals have limited opportunities in promotions. It may lead to high employee turnover amongst the HCNs. Parent country nationals do not quickly adjust to the host countries thus there is a high likelihood of poor decision making. It leads to an increase in the compensation package gap of the parent country nationals and host country nationals since PVNs are paid unjustified premium package.

The Parent country nationals achieve new authority and status thus they may not easily understand the needs of their host country subordinates. Question 8 Primary reasons for international assignments- Some include position filling depending on the skills required and need for technology transfer. Another reason is a need management development where employees are taken in different subsidiaries and headquarters for training and development. Another reason is a need for organization development.

Objective of the international assignment arise due to need for competence, need to exploit global opportunities and adapt to procedures and practices of the different locations. Such transfers assist support integration in to the global corporate culture. Question 9 Importance of measuring return on investment of international assignment and indicators- The multinational company is able to calculate the increase in business revenues and profitability. The company is able to assess the effect on global culture and competencies and whether the expatriate met the assignment goals.

The measure can assess the increase in market share in a hostile business environment. The multinational company is able to plan for future international assignments by increasing the length of assignments or reducing the compensation packages. Several indicators that are either direct or indirect can be used in measuring the return on investment. Direct indicators include employees’ salary, housing costs, repatriation logistics, goods and service allowances, administrative costs, education and shipment of household goods.

Indirect indicators include provision of effective communication with subordinates and ability to network in the new country. Another indicator is the ability to make business presentations in foreign language and ability to work in the new culture. Question 10 Prior experience when selecting an employee for international assignments- Prior experience is not a requirement. According to GMAC Global relocation services, only 12 percent of managers had prior experience in international assignments.

Some common requirements are intelligence, motivation and entrepreneurship abilities. Question 11 Should multinationals be concerned about expatriate failure and why?- expatriate failure include premature return of the expatriate before the end of assignment period due to low performance levels or inability to adjust to the local environment in the country of assignment. Multinationals should be concerned of expatriate failure since it involves both direct and indirect costs. The multinational company has to incur costs of airfare, training and relocation expenses when a replacement of the expatriate is carried out.

Failure may lead to low staff morale and productivity. Expatriate failure may lead to a decline in market share. The expatriate also loses self-esteem and confidence in future assignments. Question 12 Expatriate selection decisions are made informally according to “coffee machine” solution- expatriate selection process starts with casual conversations about the international assignment. Few candidates are considered. Nominations through networking and candidate reputation are encouraged since no panel discussions during the selection process.

Selector’s individual preferences influence the selection process. Question 13 Changes of MNE policy concerning pre-departure expatriate training in recent years- previously, MNEs were reluctant to offer pre-departure training due to limited time duration for relocation and inadequate financial resources. Currently, MNEs offer pre-departure training on the host country culture, legal system and other external market forces. Other aspects included are the host country language and market dynamics.

Question 14 International assignment and development of “cadre” of international operators- international assignment enhance communication between teams and develop a global perspective of the organization. Such assignments lead to shared values and informal teams in the organization. International “cadre” leads to international teams that are assist in knowledge transfer and innovation in the multinational processes. Question 15 How MNEs organize knowledge transfer and important factor influencing this decision- multinationals organize knowledge transfer through international assignments, international transfers and formation of international teams.

The most important factor is the culture of the multinational. Question 16 Main differences in the Going Rate and Balance Sheet approaches to international compensation- Going Rate approach is based on the prevailing market compensation rates while Balance sheet approach is based on the maintenance costs in the host country and some benefits to attract the expatriate (Dowling, Festing and Engle 165). Going rate approach bases the compensation on a selected expatriate survey comparison while balance sheet approach considered the host country compensation and makes adjustments for taxation, housing, goods and services and other expenditure such as pension contributions and education expenses (Dowling, Festing and Engle 167).

Question 17 Main objectives for a multinational firm in compensation policies- the main objectives are to attract and retain qualified personnel in all departments. Another objective is to ensure fairness in compensation to all employees including international transfers. The third objective is to ensure consistency with the overall multinational business strategy and organizational structure. The fourth objective is to ensure ease of administration and cost-effectiveness in maintenance of the human resources (Dowling, Festing and Engle 161).

Question 18 Importance for MNE to understand compensation practices of other countries- due to different national labor laws, multinationals are forced by law to employ host country nationals thus it is important to understand the compensation practices of such countries. Question 19 Advantages and disadvantages of providing post-assignment guarantees of employment- there are advantages of providing post-assignment employment guarantee since the expatriate is able to bring new ideas and knowledge in the company.

The employee is able to work hard in order to attain a promotion after the international assignment. However, there are numerous disadvantages of post-assignment employment guarantee since the expatriate will experience reverse cultural shock. The subordinates may feel demoralized if the repatriated employee is promoted as their supervisor. Repatriated employee may experience reduced self-esteem, status and job responsibility once repatriated. I will never provide post-assignment employment guarantee since the expatriate may lack an incentive to work hard (Dowling, Festing and Engle 206).

Question 20 Importance of understanding historical origins of national industrial relations systems- it is essential to understand such origins of national industrial relations since the origins shape the structure and roles played by trade unions. National industrial relations systems also affect the trade union regulations and labor laws. Such understanding leads to better choice of the human resource managerial styles and strategies (Dowling, Festing and Engle 248). Question 21 Ways in which trade unions limit strategic choices of MNEs- Trade unions influence the basic wages through collective bargaining agreements (Dowling, Festing and Engle 253) .

Trade unions also lobby the national governments in matters relating to working conditions and employment procedures. Trade unions activities can lead to go-slows and strikes that may lead to production stoppages (Dowling, Festing and Engle 254). Question 22 The first pan-European legislation that regulated relationships between multinationals and employees- Treaty of Rome Question 23 Role of performance management in a MNE- performance management in MNEs is essential in designing the compensation systems like bonuses for successful performance.

Performance management identifies skills that are essential in the MNEs. Performance management leads to motivate and more productive employees. Question 24 International initiatives to criminalize foreign bribery- multinationals should ethical policies that prohibit acceptance of foreign bribery. Multinational ethics should consider the ethical culture of the relevant country. A clear distinction should be made on facilitation of business payments, gifts and bribery (Dowling, Festing and Engle 295).

Question 25 Beyond checklist and systems analysis, what actions can MNEs take to reduce risks related to terrorism, roles of HRM in the process?- multinationals can participate in reducing such risks by implementing disaster prevention and preparedness programs, through providing enough surveillance and security in the work facility and avoiding cyber-terrorism (Dowling, Festing and Engle 301). HRM is involved in providing a safe working environment through coordinating the risk management procedures.

HRM is also tasked with recruiting and training risk management personnel (Dowling, Festing and Engle 302) . Works cited: Dowling, Peter. Festing, Marion and Engle, Allen. International human resource management. Victoria. Thomson. 2008.