4 - Workplace: Managing A Global Workforce Flashcards
Globalization
- “The inevitable integration of markets, nation-states and technologies to a degree never witnessed before…”
Thomas L. Friedman
- Changes the way we see the world around us and how we interact with all the dynamic forces.
Connections in a Globalized World
- HR needs to distinguish between large-scale forces and trends and more immediate events and “trendy” phenomena.
- Global forces (political, economic, social, technological, legal, environmental) are and should be seen as interconnected.
- While a given force’s effects are global, their impact on different cultures, industries, and organizations may be unique.
Role of Global HR
- Help create the organization’s global strategy
- Align HR processes and activities with that strategy
- Enhance communication between the organization and its stakeholders
- Ensure that HR can fulfill its role and demonstrate its value
- Adapt to the cultural and legal contexts of each area of the global organization
Push Factors - Globalization
- Saturated local markets
- Increased cost pressures
- Decreased local access to materials and talent
- Restrictive government policies
- Trade agreements that increase domestic competition
- Globalized supply chain
Pull Factors - Globalization
- Greater strategic control
- Policies promoting outward foreign investment
- Trade agreements that offer protection of intellectual property
Perlmutter’s Headquarters Orientations
- Ethnocentric
- Polycentric
- Regiocentric
- Geocentric
Ethnocentric
Perlmutter’s Headquarters Orientations
- Headquarters maintains tight control over subsidiaries.
- “One best way.”
Polycentric
Perlmutter’s Headquarters Orientations
- Subsidiaries develop strategies consistent with local business practices and cultures.
- “Many best ways.”
Regiocentric
Perlmutter’s Headquarters Orientations
Communication and coordination are high within the region but not between regions and headquarters.
Geocentric
Perlmutter’s Headquarters Orientations
- Headquarters and subsidiaries form a network, each contributing specific expertise.
- “Team way.”
Global Integration
Strategic Globalization:
- Consistency of approach
- Standardized processes
- Common corporate culture across global operations
Advantages of Global Integration
- Economies of scale
- Integrated value chain activities
- Serve globally integrated customers
- Global branding
- Shared organizational capabilities and knowledge
- Better quality assurance
- Leverage global assets for local competition
Local Responsiveness
Strategic Globalization
- Adapt to needs of local markets
- Allow subsidiaries to develop unique products, structures, and systems
Advantages of Local Responsiveness
- Better respond to local customer needs or specialized local distribution demands
- Gain efficiencies from using local substitute products and components, local workforce, local networks
- Better/easier compliance with local laws and regulations
GI-LR Matrix
GI-LR Matrix
International Strategy
- Low in global integration; low in local responsiveness.
- Foreign divisions in host countries are seen as “appendages” to home country.
- Strategy, research and development, management, and management culture derive from home country.
GI-LR Matrix
Multidomestic Strategy
- Low in global integration; high in local responsiveness.
- Decentralized portfolio of subsidiaries that operate with fair degree of independence from each other and from headquarters, which remains in home country.
- Knowledge is shared on local rather than global level.
GI-LR Matrix
Global Strategy
- High in global integration; low in local responsiveness.
- “Hub and spoke” relationship between headquarters and subsidiaries; headquarters integrates operations to take advantage of conditions in subsidiary markets and standardizes products or services.
GI-LR Matrix
Transnational Strategy
- High in global integration; high in local responsiveness.
- Locates value chain activities in most advantageous geographic locations.
- Subsidiaries can adapt global products and services to local markets.
- Best practices and knowledge are shared throughout organization.
Upstream
Global-Local Model
Decisions made at headquarters:
- Strategy and coordination
- Standardization of processes and integration of resources
Global-Local Models: Downstream
Decisions made locally:
- Adapting strategic goals and plans to local realities
Identity Alignment
Global-Local Models
- Embraces diversity in management of people, products/services, and branding.
- Product/service offerings and brand identity may be adjusted for local cultures.
Global-Local Models: Process Alignment
Are underlying operations integrated across locations?
- Technology platforms
- Business performance metrics
- HR systems
Outsourcing
- Transfers portions of work (e.g., processes or production) to outside suppliers rather than completing it internally
- Contracts out (or subcontracts) activities
Why?
- Reduces costs
- Frees up personnel and resources for other activities
Offshoring
Relocating processes or production to another country
- From developed countries to distant developing countries
Why?
- Lower costs
- Closer proximity to production resources
- More favorable economic climate for taxation
- Financial incentives
- Access to talent
- Round-the-clock shifts
- “Follow the sun”
What is Changing?
- Eroding cost-saving dynamics
- Creation of a new middle class in offshoring destinations
- Political fallout in developed countries
Onshoring
- Relocation of business processes or production to a lower-cost location inside the same country as the business
- Sometimes called “home-shoring”
- May include employees working from home
Why?
- Lower operation costs
- Benefits of having local employees
Near-Shoring
Contracting a part of business processes or production to an external company located in a country that is relatively close.
Why?
- Similar financial and legal constraints or trade agreements that provide social and economic stability
- Shared cultural values and similar mindset
- Proximity benefits (e.g., time differences and reduced travel costs)
HR Due Diligence in Moving Work
Strategic-Systematic
- Approach as long-term investments.
- Develop executives with global perspectives to create and manage competitive strategies.
- Improve coordination among home office and foreign operations
- Disseminate information, technology, and values throughout worldwide organization.
Tactical-Reactive
- Approach as short-term expenses.
- Quick-fix approach to short-term foreign operation problem.
- Randomly and haphazardly perform assignment functions, shifting focus as problems arise.
- Fail to integrate worldwide organization’s values, technology, products, and brand.
Globalists
Spend entire career moving from one locale to another
Local hires
Host-country nationals
Short-term assignees
Less than a year but more than a few weeks
International assignees
Traditional expatriates on one- to three-year assignment
(Expatriate: a person who lives outside their native country)
Commuters
Travel across country border for work regularly
Just-in-time expatriates
Ad hoc or contract workers hired for single assignment
(Expatriate: a person who lives outside their native country)
Global Assignment Guidelines
- View assignments as a process, not an activity.
- Recognize and consider all dimensions of the assignment experience.
- Conduct thorough and professional assessments of candidates.
- Establish and maintain realistic expectations.
- Provide training.
- Provide appropriate health and safety support.
- Provide well-planned, ongoing training and support.
- Plan, prepare for, and support repatriation.
- Address problems quickly, thoroughly, and responsively.
Global Assignment Process
Global Assignees:
Assessment and Selection
The right people in the right place at the right times
- Develop the selection criteria
- Involve the right people
- Choose the best selection methods and tools
- Complete the assessment/make a recommendation
Global Assignees:
Management and Assignee Decision
Engage in due diligence regarding costs, benefits, logistics and aspects of global assignment
- Analysis of the costs and benefits of the assignment
- Preparation of the assignment plan
- Candidate acceptance or rejection of the assignment offer
Global Assignees:
Pre-Departure Preparation
- Visas and work permits - adequate time to obtain the necessary documents and awareness of expiration dates
- Security briefings - briefings about personal and family safety abroad and business aspects of security
- Cross-cultural counseling - counseling before and during the assignment to increase the probability of success
Global Assignees:
On Assignment
Global Assignees:
Completing the Assignment
Repatriation
- Involves reintegrating the employee back into the home country
- Includes adjustment to a new job and readjustment to the home culture and conditions
Global Assignees:
Completing the Assignment
Redeployment
- A different global location
- A new location or new position in the current host country
PESTLE
Political
Economic
Social
Technological
Legal
Environmental
Global Crisis
- Economics
- Climate change
- Pandemics
- Changes in governmental power
The Global Organization
Four structural/strategic components:
- Physical dispersion - operates in multiple countries
- Diversity of thought, people and culture
- Unified through a clear single org. identity
- Self-aware of their global reach and leveraging geographic and cultural diversity to achieve success
Go Global
- Create a new entity
- Turnkey: purchase an already existing operation
- Greenfield: build new operation from the ground up
- Brownfield: repurposing an existing disused facility
- Aquire a subsidary
- Enter into a partnership
- Outsource all or specified tasks
- Offshore existing capability to a new location
Homebound
Refusal to assimilate into the local culture
Go Native
Full embrace of local culture and work modes
Management Knowledge Guidelines
Schell & Solomon
Managers should know as much as possible about:
- The country they are sending assignees to
- Essential developmental assignments and experiences
- Specific job function and assignment objectives
- Process of cross-cultural adjustment to anticipate feelings the assignee may experience
- Cultural dimensions
- Potential problem areas
