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Global Human Resource Management

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Typical Selection Criteria Education & experience Skills and ... selection technique Expatriates and Global Staffing of Managerial positions in Global ... – PowerPoint PPT presentation

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Title: Global Human Resource Management


1
Global Human Resource Management
  • MIM 564
  • Spring, 2010
  • Sully Taylor and Berrin Erdogan

2
Week 2, Global Human Resource Management
  • The Global Labor Pool Coloplast and the
    expansion into Hungary and China
  • The potential and problems of offshoring
  • The Quest for Global Talent Peter Hanson and
    offshoring to China
  • Career Management and the Role of Effective
    Expatriation Celtic Tiger

3
  • The Human Side of Globalizing a Company
  • The Global Work Force and Offshoring
  • Adapting the organization to globalization

4
The Global Labor Pool
  • What does a company need to consider when
    thinking about offshoring or outsourcing
    employment (or any corporate value chain
    activity)?
  • How do you determine the suitability of a labor
    pool in another country?

5
An application.
  • Coloplast A/S

6
  • Outsourcing.is part of analyzing a business
    process to identify those activities that can be
    done external to the firm. A source can be
    either domestic or international.
  • Offshoring.is placing a part of a business
    activity in a foreign location. If kept within
    the firm, it can be called international in-house
    (out)sourcing.
  • Offshore outsourcing is using a supplier based in
    a foreign country on a recurrent basis.

7
Offshoring (in-house production)
  • Full control over quality of products
  • Leveraging of best practices across subsidiaries.
  • High short-term flexibility, allows adjustments
    to changing market (e.g., changes in import tax)
  • Know-how protection (IP)
  • Stable pricing and lower supply risk

8
Outsourcing to a Third Party
  • Lower lead time due to use of existing
    infrastructure
  • Specialized outsourcing companies
  • Exploit the advantages of using a subcontractor
    more focused on a particular task
  • High long-term flexibility because fewer
    asset-specific investments have been made
  • Lower investment costs tend to be variable
    costs
  • Often cheaper production
  • Integrating binds (human and capital) resources
    and distracts managerial focus from other
    activities (such as marketing and branding)

9
The outsourcing decision
  • Decision depends on vulnerability costs of
    outsourcing.
  • Four factors that make an activity a target for
    outsourcing (vulnerability)
  • a. Fungibility
  • b. Is not tacitly specialized
  • c. Is measurable
  • d. Is stand-alone activity
  • Also must consider outsourcing costs (high/low)
    around
  • Product/service delivery
  • Coordination
  • Control
  • Enforcement
  • Adapted from Ungson Wong, 2008 Weidenbaum,
    2005.

10
Peter Hanson case.
  • Offshoring to increase the talent pool

11
Peter Hanson case presents us with several
questions
  • What is the goal of the PDC, and what will it
    take to make it successful? What strategic
    imperatives does it have to contend with?
  • What are the cultural and institutional forces it
    must take into account?
  • How can it reconcile (bridge) the conflicting
    cultural and institutional forces?

12
How can the differences be bridged?
13
  • Once you know whether you are going to look
    locally or globally, internally or externally
    for the people you need, then what?
  • Recruitment.
  • Methods.

14
Talent Management and Global Career Management
  • Selecting People for Overseas Positions
  • How, and based on what criteria, was Peter Hanson
    selected for the PDC post in China?

15
Selection process
  • Gather information about the people in the pool
    of qualified recruits
  • Evaluate the qualifications of each applicant
  • Make the decision about which to hire
  • Key question what criteria will you use, and
    why? How do you know that the person meets that
    criteria?

16
Typical Selection Criteria
  • Education experience
  • Skills and abilities (often subjective)
  • Personal characteristics including the Big 5
    personality traits (neuroticism, extraversion,
    openness to experience, agreeableness,
    conscientiousness)
  • Hiring for fit (personal values or personality
    fit)

17
  • What techniques can you use to select candidates
    for global positions? What are the strengths and
    weaknesses of each?

18
Major Selection Instruments used in Selection for
all Jobs
  • Application blanks and resumes
  • Selection tests e.g. mental or cognitive
    ability, psychomotor ability, work samples,
    personality, etc.
  • Interviews structured/unstructured situational
    (or behavioral)
  • Physical examinations
  • References and background checks
  • Assessment centers

19
Two important concepts in Selection Tools
  • Reliability the consistency of a measurement.
    Will you get about the same results if you use
    this instrument again with this person? E.g.
    test-retest.
  • Validity how well does the instrument really
    tell you whether the person will do well in the
    job? Deals with the issues of (1) whether the
    test is an adequate measure of the characteristic
    it supposedly measures and (2) whether inferences
    and actions based on test scores are appropriate.
    E.g. predictive or concurrent validation.

20
One method of recruitment .that is also a kind
of selection tool.
  • Realistic job previews. What do they get you?
    Why do they work?

21
Common errors in interviews
  • First impression
  • Similarity error
  • Contrast error
  • Halo error
  • Non-relevancy error

22
Making the final determination of who to hire
  • Use multiple indicators allows you to
    counterbalance the measurement error in any one
    selection technique

23
  • Expatriates and Global Staffing of Managerial
    positions in Global Companies

24
Broadly speaking, there are two categories of
expatriates
  • Agents the agency motive for using
    expatriates is to fix a problem, or to control,
    or to transfer knowledge or corporate culture.
  • Learners the reason for this is to develop
    the professional capabilities of managers, often
    at younger ages.

25
Three Key Roles of Expatriates
  • Alignment (helps to decentralize decisions while
    keeping the global perspective WHO makes the
    decisions, not where)
  • Standardization (global standardization of
    practice, e.g. focus on operating procedures, or
    education and training)
  • Socialization (inculcating the cultural code of
    the company in others, e.g., in Intel, have to be
    able to argue your point forcefully in HP,
    teamwork is important).

26
In other words, using expatriates
  • Permits decisions to be made locally but with the
    global perspective in mind.
  • Permits the transfer abroad of the standards of
    the parent company.
  • Permits the diffusion abroad of shared values a
    key element in global integration.

27
Selecting people for global positions the case
of expatriation
  • What approach does the company have towards
    staffing in its affiliates overall?
  • What criteria does it use or should it use?
  • What instruments should it use to select among
    different candidates? E.g. assessment centers,
    past performance, interviews, psychological
    tests.
  • An examination of the reliability and validity of
    interviews.

28
Four general approaches to staffing of affiliates
  • Ethnocentric
  • Polycentric
  • Geocentric
  • Regiocentric

29
Ethnocentric approach to staffing
  • All key positions filled by parent country
    nationals.
  • Advantages easy communication with HQs
    overcomes a lack of good local managers good in
    early stages of internationalization.
  • Disadvantages limits promotion opportunities of
    host country nationals there is low productivity
    while the expatriate adjusts often leads to
    inequitable pay packages.

30
Polycentric approach
  • All key positions in parent country operations
    filled by parent country people all key
    positions in host country affiliate by host
    country nationals.
  • Advantages eliminates language barriers and
    adjustment problems lowers the political profile
    of the affiliate less expensive (usually)
    provides continuity of management.
  • Disadvantages communication gap between host
    country and HQs limits host country nationals
    career paths because cant get necessary
    experience to go to highest reaches of the firm
    limits international experience among top HQ
    executives.

31
A geocentric approach
  • The best people are sought for key jobs
    throughout the organization, regardless of
    nationality.
  • Advantages develops an international cadre of
    executives deploys best talent for a particular
    situation reduces identification with local
    unit.
  • Disadvantages most host countries want foreign
    affiliates to employ their citizens increases
    the training and relocation expenses creates a
    need for standardized compensation structure
    requires longer lead times and more centralized
    control of the staffing process.

32
Regiocentric Approach
  • Is a modified geocentric approach, based on
    regional selection and deployment.

33
Assessment centers for international postings are
  • Used to determine managerial potential of
    employees that evaluates individuals as they take
    part in a large number of activities conducted in
    a relatively isolated environment. It is also
    useful for identifying potential training needs.
  • (e.g. tasks such as dealing with a sudden
    disruption to supply chain conflict between
    employees government representative with a beef
    with the company team work with others on a
    problem).

34
Criteria for Selecting Expatriates
  • Depends on the role the expatriate is expected
    to assume.
  • E.g. for agency-type assignments, clear
    managerial qualifications and the relevant
    professional skills are key. Also the ability to
    improvise, impart confidence and motivate.
    (agency control or knowledge transfer)
  • In learning-oriented assignments, relationship
    abilities and cultural awareness may be more key
    as they open access to new knowledge. (career
    enhancement, development of young people)

35
The decision to take a global position.
  • The Celtic Tiger case.
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