HR in the Global Context Flashcards
Globalization
The inevitable integration of markets, nation states and technologies to a degree never witnessed before.
*Changes the way we see the world around us and how we interact with all the dynamic forces
Globalization Time Line
Intro of Apple Macintosh First web page posted on the internet Ratification of NAFTA Smartphones Tech companies Recession Global shift in FDI (foreign direct investment) TPP (trans pacific partnership) Brexit (British voters to exit EU) Tarrifs General Data Protection Regulation (UE Privacy Law)
Globalization Considerations
HR should strive to understand which globalization events, forces, and trends are significant for a given orgz and for HR responsibilities within the orgz.
- Global forces require careful analysis
- Global forces should be viewed in terms of their connections (PESTLE)
- Global forces have unique cultural connotations
Foreign Direct Investment
The investment of foreign assets into domestic structures, equipment, and orgz
The Diaspora
A mass migration of a group from its homeland to multiple destinations
Global Demographic Dichotomy
Basically, the workforce in emerging economies is becoming disproportionately young while the workforce in developed economies is rapidly aging
*A demographic bulge that is now preparing to leave the workforce, creating a deficit of experienced workers
Reverse Flow of Innovation
Refers to innovations created for or by emerging economy markets and then imported to developed economy markets
Hyperconnectivity
The increasing digital interconnection of people–and things–anytime and anyplace
Hyperconnectivity ‘Measurability’
Increased data mining and analytics are enabling new types of data to be measured and analyzed, new questions to be asked, and new criteria to be established
Hyperconnectivity ‘24/7 Global Workplace’
Worker can be fully connected to work via mobile phone or tablet, any time of day or night, and from anywhere around the world.
*Concern is data privacy
The Role of Global HR
- Participating in creating the orgz particular global strategy
- Aligning HR processes with the orgz global strategy
- Enhancing communication between the orgz and its stakeholders
- Ensuring HR function posessess the skills, and resources to fulfill its global role and demonstrate its VALUE
- Adapting processess as needed to the cultural and legal contexts of each area of the global orgz
Push Factors ‘Reactions’
- A need for new markets
- Increased cost pressures and competition
- Shortfalls in natural resources and talent supply
- Government policies
- Trade agreement
- A globalized supply chain
Pull Factors ‘Attractions’
- Strategic control
- Government policies that promote foreign investment
- Trade agreements
Ethnocentric
One best way – headquarters maintains control over subsidiaries (policies, practices, strategy etc.)
Polycentric
Many best ways –subsidiaries develop strategy consistent with local business practices and cultures
Regiocentric
Regional subsidiaries work together to coordinate policies SEPARATELY from headquarters
Geocentric
Team way headquarters and all subsidiaries work together as a network to coordinate policies, practices etc.
Global Integration (GI)
Emphasizes consistency, standardization of processes, and a common corporate culture across global operations
Advantages:
- Achieving economies of scale
- Integrating value chain activities
- Ability to serve globally integrated customers
- Global branding
- Sharing orgz capabilities
- Better quality assurance
- Leveraging global assets for local competition
Local Responsiveness (LR)
Emphasizes adapting to the needs of local markets and allows subsidiaries to develop unique products, structures, and systems
Advantages:
- The ability to respond to local customer needs
- Efficiency gained from using local substitutes
- The ability to remain compliant with local laws and regulations
GI Strategies Focus On
- Building a common orgz culture
- Developing HR practices to manage international assignments
LI Strategies Focus On
- Promoting cultural awareness
- Mitigating cultural bias
- Ensuring alignment of local HR practices with global HR strategy
- Developing the entire talent pool
GI-LR Matrix of Global Strategies
Global: high GI, low LR (Apple)
International: low LR, low GI (Moet)
Transnational: high LR, high GI (McDs)
Multidomestic: high LR, low GI (JJ)
International Strategy
Export a product or service to foregin countries that are developed in the home country
HR: working with ppl who are traveling
Ex: Moet, Redbull, Porsche
Multidomestic Strategy
Decentralized, Goals/Strategy developed locally to stay competitive, Knowledge shared at local level
HR: provide training to expats on legal or cultural
issues
Ex: Johnson and Johnson
Global Strategy
Views the world as a single market, Strategy comes from headquarters, Standardized technology
HR: Standardized hiring, identify EEs who can work in diff cultures
Ex: Apple
Transnational Strategy
- Locates value chain activities in most advantageous geographic locations
- Subsidiaries can adapt global products and services to local markets
HR: manage D&I
Ex: McDonalds (Pies)
Upstream V. Downstream
Upstream: decisions are made at the orgz headquarter level
Downstream: Decisions are made at the local level
Identity Alignment V. Process Alignment
Identity: local responsivement, differences among locations are embraced. EX: fast food chains offer localized menu
Process: global integration, underlying operations such as IT/Finance/HR integrate across locations. EX: business where units have a common platform (single technology used in all locales)
Outsourcing
A practice where a company transfers portions of work to outside suppliers rather than completing it internally.
*Reduces costs and frees up personnel and resources for other activities
Offshoring
Practice of relocating processes or production to another country.
*Resons for offshoring: lower costs, closer proximity to necessary production resources, more favorable economic climate, financial incentives, also:
- access to talent
- round the clock shifts (24 hours a day)
- follow the sun (work can proceed without interruption)
Onshoring
The relocation of business processes or production to a lower cost location inside the same country as the business.
*Lower costs, having local EEs and avoiding the problems associated with distant offshoring scenarios
Near Shoring
A company contracting a part of its business processes or production to an external company located in a country that is relatively close (US/Mexiso/CAN).
*Social and economic stability within region, shared cultural values and similar mindsets
HR Due Diligence for Moving Work
Cost and quality: wage structure, tax structure, real estate
Sociopolitical environment: government receptivity, ethical environment, quality of life, accessability
Risk levels: political and labor unrest, natural disasters, IT security
Talent Pool: language and cultural differences, size of labor force, availability of vendors
Approaches to Global Assignments
Strategic Systematic (Long term):
- approach global assignment as long term investments
- develop future execs with global perspective
- increase effectiveness of critical coordination and control between home office and foreign operations
- disseminate information, technology, and values throughout the worldwide orgz
Tactical Systematic (Short term):
- approach global assignments as short term expenses
- focus on quick fix approach to a short term problem in a foreign operation
- perform some functions of assignments and focus attention as problems arise
Types of Global Assignments
- Globalist: spend their entire careers moving from one locale to another
- Local hires: hired locally in subsidiary countries
- Short term assignees: On assignment for less than a year but more than a few weeks
- Intl Assignees: traditional expats on full relocations assignments lasting from 1 to 3 years
- Commuters: travel across a country border for work
- Just in Time Expats: Ad hoc or contract workers hired for a single assignment
Global Assignment Process
Stage 1: Assessment & Selection
Stage 2: Mgmt & Assignee Decisions
Stage 3: Pre-departure Prep
Stage 4: On Assignment
Stage 5: Completing the Assignment
Stage 1: Assessment & Selection
- Develop the selection criteria
- Involve the right people (Stakeholders)
- Choose the best selection methods & tools
- Complete the assessment/Make a recommendation
Stage 2: Mgmt & Assignee Decisions
- Analysis of costs & benefits of the assignment: specific and quantifiable benefits to justify funding.
- Preparation of assignment plan: clarify the orgz and assignee’s expectations of the assignment.
- Candidate acceptance or rejection: the candidate should be given access to ppl and information needed to make a sound decision.
Stage 3: Pre-departure Prep
- Visas and work permits: the orgz must plan for how long it will take to obtain documents, and be aware of time restrictions.
- Security briefings: personal and family safety abroad, and business aspects of security.
- Cross cultural counseling: conducted before and during the global assignment.
Stage 4: On Assignment
- Honeymoon: everything is new and exciting
- Culture shock: the challenges of living and working abroad become clear
- Adjustment: working and living in host country gets easier, you have unlocked the code
- Mastery: assignees are able to participate fully and comfortably in the host culture
Stage 5: Completing the Assignment
Repatriation: reintegrating the EE back into the home country after international assignment.
Redeployment: an asignee’s next assignment can be back in the home country, in a different global location, or in a new location or new position in the current host country.
Global Crises
Global crises have made it apparent that the world itself is a system in which changes in one part can affect other parts:
- Economics (recesions)
- Climate changes
- Pandemics
- Changes in Govt power (new policies)
The Global Orgz has 4 Strategic Components
- Physical dispersion-the orgz operates in multiple countries
- Diversity of thought, people, and culture that is actively leveraged by a strategic objective
- Unified through a clear single orgz identity
- Global for a reason, self aware of their global reach and leveraging geographic and cultural diversity to achieve success as they have defined it
Guidelines to Enhance Global Assignment Success
- View assignment as a process
- Recognize 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
- Plan, prepare, and support repatriation
- Address problems quickly thoroughly and responsively
