Essentials of International Human Resource Management: Managing People Globally

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David C. Thomas & Mila B. Lazarova

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    Preface

    This book is about managing people in the context of a global business environment. The field of international human resource management has its roots in the study of managing expatriates in the multinational firm and in comparisons of management practice in different countries. In recent years, the strategic management of human resources in the multinational firm has been the dominant consideration. However, globalization has created the need to understand human resource management more broadly across countries, cultures, and organizational types. In this book we consider the broad global spectrum for the context for HRM, including cultural, institutional, and organizational contexts. Our coverage is not limited to the multinational firm but considers all types of organizations that are embedded in the global context. And we integrate comparative approaches to HRM with an understanding of the strategic management of people in organizations that operate in a global context.

    A unique feature of this book is that it balances U.S. and non-U.S. schools of thought with regard to HRM. That is, as opposed to treating HRM strictly as a set of functions in the service of strategic management of the multinational firm that can be reduced to best practice, we take a more pluralistic view of the relationship of people within organizations in a global context. While recognizing this complexity, we present concepts in an easy to read user-friendly way, but provide extensive references that allow the reader to follow up on concepts in more depth.

    Because the book is an essentials volume that extracts key concepts in the management of people in a global context and presents them in a concise form it allows a number of options for use in the classroom. It can be used as a standalone text for advanced undergraduate and postgraduate courses in International Human Resource Management. In that regard we have provided some of our favorite case studies to supplement the text. While recognizing that cases often present multiple issues, we have presented them in an order that parallels the development of topics in the text. However, they are at the end of the book to facilitate their use at any stage in the course. In addition, the text can be combined with selected readings to create a more rigorous in-depth treatment of global HRM or used as a supplement to introduce the international dimension to more general HRM courses. Finally, we hope that scholars, particulary those without a deep background in IHRM, will find it a concise reference to key issues in the field.

    In Chapter 1, we introduce HRM in a global context and define the scope of the book. This chapter moves beyond the traditional focus of management of human resources in the multinational enterprise (MNE) to discuss the continually changing context in which IHRM exists and the changing nature of MNEs themselves. It addresses trends, such as the aging of the workforce in the developing world and international migration that result in workforce demographic changes, outsourcing and its influence on workforce characteristics, rapid technological changes, and cultural differences in attitudes toward work influence the way work itself is organized. And uneven distribution of talent around the world creates a playing field in which talent shortages in one area contrast with labor surpluses in another resulting in a worldwide competition for talent.

    The goal of Chapter 2 is to overlay the country context on the global context to define the external challenges facing global HRM. In it we focus on the cultural and institutional factors that influence HRM within a national context. We also discuss differences in national business systems including political, legal, social, and economic institutions and their effect on HRM, including coverage of the unique context of less developed countries. Further, we include a discussion that contrasts models of HRM and outline the differences in institutional constraints and choices available to HR managers.

    Chapter 3, completes the contextual picture by introducing the organizational context of IHRM. It focuses on how organizational differences influence global HRM, including a discussion of types of MNEs (international, multidomestic, global, transnational, metanational), but also describes a shift from MNEs alone to the broad domain of firms for whom global HRM is relevant. This involves an examination of emerging players on the global stage, including small- and medium- sized enterprises and MNEs in the developing world. It includes a discussion of the strategy and structure of the MNE, including emerging organizational forms on HRM.

    In Chapter 4, we move the discussion from a description of HRM in global context to the influence of crossing contextual boundaries on HRM policies and practices. In this chapter, we discuss the issues involved in transferring HRM policies and procedures across boundaries, including the direction of transfer and the effects of outsourcing of HRM on transfer. We include a discussion of the global diffusion of employment practices, global best practices, the influence of home and host country on inhibiting or facilitating transfer, and country of origin effects. Finally, we review the often unanticipated effect of cultural recontextualization of practices as they are transferred.

    In Chapter 5, we present a systematic understanding of HRM issues that are present in joint ventures, mergers, and acquisitions. In this chapter, we highlight issues in a variety of functional areas of HRM because of disparities in practices among firms, the need to eliminate duplication in the new entity, the need for consistent HRM practices, the integration or merging of practices, and the dominance of one firm's practices over the other. The need for HR due diligence as part of the process of joining firms is an additional important area of discussion.

    In Chapter 6, we focus on how the changing nature of the global workforce influences attracting, engaging, and retaining employees for competitive advantage. We include discussions of issues such as talent availability, workforce mobility, and outsourcing and also provide a comparison of recruitment and selection methods across countries. Also covered in this chapter are issues involved in staffing managerial positions in MNEs and a discussion of the reasons for using expatriates and expatriate selection issues.

    Chapter 7 examines and categorizes training and development activities, including global leadership development, in such a way that their utility in different and dynamic contexts can be clearly understood. The global context forces an examination of cultural differences in learning styles and training methods and the need to design and deliver training and development programs across borders. We also give attention to the special needs of training expatriates, repatriates and their families, including discussions of program types, predeparture versus in-country training, and so on.

    This goal of Chapter 8 is to examine how to achieve the best return on the investment made in employees by matching performance management systems with the firm. The global environment requires a consideration of both cultural differences in motivation and performance management and institutional differences in compensation practices. A key area of consideration is the need for internally consistent versus locally adapted performance management and compensation systems. Compensation and tax issues related to international assignments are also discussed.

    In Chapter 9, we expand the traditional discussion of expatriates to cover all types of mobility and its relationship to both firm and individual outcomes. We examine international career issues both from the perspective of the employee and the employer and also discuss the adjustment, performance, and repatriation of expatriates and the relationship of overseas assignments to career. An associated topic area involves family issues, women on overseas assignments, and dual-career couples. From the perspective of the organization, a key issue is the relationship of the organization (support) to the expatriate assignment and the ROI of expatriate assignments.

    In Chapter 10, we include both a comparative perspective in which such issues as cultural differences in ethical HR practices are examined and an organizational perspective covering such elements as the formulation and implementation of corporate codes of social responsibility. A second but related focus is on differences in the development of and current state of industrial relations and differences in employment law. We integrate stakeholder perspectives to understand the important role that the HRM practices have in CSR.

    Chapter 11 is dedicated to sensitizing the reader to areas that are likely to have the biggest impact on future global HRM. We outline a number of important, if less-studied, issues that are on the horizon with regard to managing a global workforce. These involve demonstrating the link between global HRM and firm performance, the role of global HR in championing sustainable business, the numerous challenges under the heading of global talent management, and the way in which global mobility is being shaped by the changing needs, locations, and types of international assignments combined with an increasing focus on cost reduction. Finally, the changing nature of careers and the need to create policies and procedures that are fair across employee categories, countries and regions will also be central issues for global HR in the future.

    With this book we have tried to capture the broad spectrum of global HRM to include comparative aspects as well as the importance of HRM in the multinational enterprise. Global HRM has come a long way from the study of how to manage expatriates. In this volume we have tried to reflect the fact that globalization requires an understanding of human resource management across countries, cultures, and organizational types.

    Acknowledgments

    We are grateful for the support and assistance of a great number of people and institutions that contributed to the completion of this project. The Beedie School of Business, Simon Fraser University, Koç University, Istanbul (thank you Zeynep), the Australian School of Business, University of New South Wales, and Wirtschaftsuniversität Wien all provided support in various ways. Mila's association with the Cranfield Network on International Human Resource Management (CRANET) has been invaluable. And our colleagues in the International Organizations Network (ION) are a continuous source of information and inspiration. We thank Patricia Quinn and all the professionals at Sage for allowing us the latitude to do the book the way we wanted and in the time available to us. Thanks to Vicki L. Baker, Albion College, Albion; Diya Das, Bryant University, Smithfield; Linda Kuechler, Daemen College, Amherst; Denise Lanfear, Oakland University, Rochester; Fidelis Ossom, Northeastern State University, Tahlequah; and Kern Peng, Santa Clara University, for providing reviews of the book. We are especially grateful to Karin Rathert for her superb job of copyediting the manuscript and to Echo Yuan Liao for research assistance. Finally, we are both grateful for the tolerance and support of our partners in life and families. Lisa works hard to keep Dave centered and mostly succeeds, and Mila is fortunate to have the love and support of Gancho and Boyan.

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    About the Authors

    David C. Thomas (PhD, University of South Carolina) is currently Professor of International Business in the School of Management at the Australian School of Business, University of New South Wales, Sydney. He is the author of eight other books including (with Kerr Inkson) the bestselling Cultural Intelligence: Living and Working Globally (2009, Berrett-Koehler Publishers). His book Cross-Cultural Management: Essential Concepts (2008, Sage Publications) was the winner of the R. Wayne Pace Human Resource Development book of the year award for 2008. In addition, he has recently edited (with Peter B. Smith and Mark Peterson) The Handbook of Cross-Cultural Management Research from Sage Publications. His research on cross-cultural interactions in organizational settings has appeared in numerous journals. He is currently Area Editor for Cross-Cultural Management for the Journal of International Business Studies and serves on the editorial boards of the Journal of World Business, Journal of Organizational Behavior, and European Journal of Cross-Cultural Competence and Management. His previous academic postings have included positions at the Beedie School of Business, Simon Fraser University, the Pennsylvania State University, and the University of Auckland, New Zealand, where he was also director of the Master of International Business Program. He has held visiting positions at Koç University, Istanbul, Turkey, the Chinese University of Hong Kong, the University of Hawaii, Massey University, New Zealand, and ESCEM, Tours, France. In addition to teaching at both undergraduate and post graduate level, Dr. Thomas has consulted on diversity issues with numerous organizations in North America, Europe, and Australasia.

    Mila B. Lazarova is Associate Professor and Canada Research Chair in Global Workforce Management in the Beedie School of Business, Simon Fraser University, Canada. She is the Director of the Centre for Global Workforce Strategy. She received her PhD in Human Resources and Industrial Relations from Rutgers, the State University of New Jersey. Dr. Lazarova also holds a MS degree in HR/IR from Rutgers University and a MBA degree in International Business from the University of National and World Economy in Sofia, Bulgaria. Her research interests include, expatriate management, with a focus on repatriation and the career impact of international assignments; work/life balance issues related to assignments; global careers; the role of organizational career development and work/life balance practices on employee retention; and the changing role of the HR department in organizations. She also conducts research in comparative human resource management and is the Canadian contributor to CRANET, a long-term research collaboration of over 35 universities across the world that carries out a regular international comparative survey of organizational HR policies and practices. She has received two competitive research grants from the Social Sciences and Humanities Research Council of Canada in support of her work on the CRANET project. Dr. Lazarova has published her work in journals such as the Academy of Management Review, Organization Science, Journal of International Business Studies, and Journal of Organizational Behavior and has contributed numerous book chapters in edited volumes. She recently edited (with Emma Parry and Eleni Stavrou) Global Trends in International Human Resource Management (Palgrave Macmillian, 2013). She is currently on the editorial board of several journals, including the Journal of International Business Studies, Journal of World Business, Human Resource Management Journal and the International Journal of Human Resource Management.


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