Managing Global Human Resources

MANAGING

GLOBAL HUMAN RESOURCES

The environment in which business competes
is rapidly becoming globalized. More and more companies are entering international
markets by exporting their products overseas, building plants in other
countries, and entering into alliances with foreign companies. Global competition
is driving changes in organizations throughout the world. Companies are
attempting to gain a competitive advantage, which can be provided by international
expansion. Deciding whether to enter foreign markets and whether to develop
plants or other facilities in other countries is no simple matter and many
human resource issues surface. (Noe, Hollenbeck, Gerhart, and Wright; 534)

Doing business globally requires that adaptations
be made to reflect cultural and other factors that differ from country
to country and from continent to continent. The nature and stability of
political systems vary in character and stability, with contracts suddenly
becoming unenforceable because of internal political factors. Human resource
regulations and laws vary among countries in character and detail. In many
countries in Western Europe, laws on labor unions and employment make it
difficult to reduce the number of workers because required payments to
ex-employees can be very high. Equal employment legislation exists to varying
degrees. In some countries, laws address issues such as employment discrimination
and sexual harassment.

Cultural forces represent another important
concern affecting international human resource management. Culture is composed
of the societal forces affecting the values, beliefs, and actions of a
distinct group of people. (Mathis & Jackson, 171) Cultural differences
certainly exist between nations, but also between countries. Getting individuals
from different ethic or tribal backgrounds to work together may be very
difficult in some parts of the world. Culture is important to human resources
for two reasons. It determines the other factors – political-legal, economic,
and education-human capital factors. Culture affects human capital, because
if education is greatly valued by culture, then members of the community
try to increase their human capital. (Noe, Hollenbeck, Gerhart, and Wright;

537) Economic conditions vary also from country to country. Many lesser-developed
nations are receptive to foreign investment in order to create jobs for
their growing populations. In many developed countries, especially in Europe,
unemployment has grown, but employment restrictions and wage levels remain
high.

The internationalization of U.S. corporations
has grown than the internationalization of human resource management. International
human resource management differs from domestic human resource management
in several ways. In the first place, it places a greater emphasis on functions
and activities such as relocation, orientation, and translation services
to help employees adapt to a new and different environment outside their
own country. Assistance with tax matters, baking, investment management,
home rental while on assignment, and coordination of home visits is also
usually provided by the human resource department. Larger corporations
have a full-time staff of human resource managers devoted to assisting
globalization. For example, McDonald’s has a team of HR directors who travel
around the world to help country managers stay updated on international
concerns, policies, and programs. The human resource department in an overseas
unit must be particularly responsive to the cultural, political, and legal
environments. Companies such as Shell, Xerox, Levi Strauss, Digital, and

Honeywell have made a special effort to create codes of conduct for employees
throughout the world to make certain that standards of ethical and legal
behavior are known and understood. (Sherman, Bohlander, and Snell; 633)

A growing number of organizations that
operate only within one country are recognizing that they must change and
develop a more international perspective. Organizations may pass through
three stages that are import-export (national) companies, multinational
enterprises (MNE), and global organizations. National companies do not
become global companies immediately. Involvement in international HRM depends
greatly on a company\'s phase of globalization. Import-export firms. Firms
in the first phase of globalization simply move products across national
boundaries. The firm does not employ people in other countries, except
a few managers responsible for negotiating business agreements. These agreements
usually involve buying or selling complete products or services. Import-export
firms need to understand their trading partners\' cultures and usually must
overcome communication barriers to negotiate agreements. Negotiations are
usually done by expatriate representatives, but expatriates are not employed
as extensively by import-export firms as by multinational enterprises.

HR policies and practices remain relatively unchanged from the company\'s
traditional home-base practices. (HR Magazine,06-01-1995)

Multinational enterprises (MNEs). Firms
in the second phase of globalization have strategic corporate units located
in foreign countries. Part of the firm\'s goods or services may be produced
in one country, then possibly moved to another country for additional assembly,
and ultimately distributed to other countries where they are sold by employees
of the firm. MNEs typically make extensive use of expatriate managers who
are sent from headquarters to oversee foreign operations. Expatriate managers
play important strategic roles.