1. What is Global HRM? Global HRM involves the activities, policies, and practices of attracting, engaging, developing, rewarding, and retaining employees — but across multiple countries, cultures, and contexts. 2. Why does managing people differ across countries? Differences arise due to: • Culture • Politics • Laws • Societal norms and structures 3. Who needs International HRM (IHRM)? • Multinational Enterprises (MNEs) • Home-country subsidiaries of foreign-owned firms • Domestic firms with foreign employees • Government agencies and NGOs • SMEs (Small and Medium-sized Enterprises) 4. What is Globalisation? Globalisation refers to economic integration, reduced trade barriers, and worldwide interconnectedness across all activities. Businesses globalise to tackle threats and seize opportunities. 5. Factors influencing international business: • Geography • Culture • Political climate • Migration • Competitive and economic climate • Technology • Legal systems • International organisational behaviour • Labour relations and unions 6. Globalised environments examples: • Technology: Enhances communication, impacts recruitment, evaluation, compensation, and automates HR functions. • Economics: Interconnected economies, trade shifts, FDI, global labour force, migration trends. • Political/Legal: Political changes create uncertainty; HR navigates laws on discrimination, wages, unions, and immigration. • Culture: Shapes institutional goals, operations, and behaviours — HR must address value and belief differences. 7. Organisational Integration: • Align people, processes, and structures with goals. • Consider how globalisation impacts job perception, work hours, skills, and compensation expectations. 8. Evolution of Global HRM: • Industrialisation: Early HR practices linked to recruitment, union relations, and scientific management. • Internationalisation: Post-WWII global expansion of US firms, expatriate roles, and financial crises shifting focus. • Globalisation: 1990s competitive acceleration — focus on expatriate management and knowledge transfer across MNCs. 9. International HRM: • Deals with HR issues from business internationalisation. • Involves strategies to manage MNC employees both at home and abroad. • Focuses on attracting, developing, and maintaining global talent. 10. Global vs. Domestic HRM: • Global HRM: More complex, needing strategies for cross-border operations. • Domestic HRM: Focuses solely on managing a workforce within one country. Chapter 2 1. Importance of Cultural Knowledge in IHRM Understanding culture helps multinational enterprises (MNEs) effectively interact with: • Customers • Employees • Suppliers • Governments Culture influences how businesses operate, including: • Employee management • Teamwork approaches • Hiring criteria • Talent development • Meeting structures 2. Definition and Components of Culture Culture: A shared way of behaving and believing developed over time within a group (e.g., national, corporate, professional, or age-based groups). It provides identity, behavioral norms, and a framework for decision-making. 3. The Iceberg Concept of Culture • Surface Culture (Explicit, Observable): Clothing, food, gestures, etiquette. • Hidden Culture (Middle Layer): Values, religion, philosophies, morals. • Invisible Culture (Core Layer): Universal truths and fundamental beliefs. 4. Cross-Cultural Competence in IHRM HR managers must understand and adapt to cultural differences to: • Build credibility and goodwill • Motivate and interact with an international workforce • Handle international responsibilities effectively 5. Cultural Dimensions (Geert Hofstede) • Power Distance: Acceptance of hierarchy vs. equality in power structures. • Individualism vs. Collectivism: Prioritizing individual success vs. group loyalty. • Uncertainty Avoidance: Tolerance for ambiguity vs. preference for structure and rules. • Masculinity vs. Femininity: Competitive, success-driven societies vs. cooperative, quality-of-life-focused ones. • Short-term vs. Long-term Orientation: Tradition-focused vs. future-oriented societies. • Indulgence vs. Restraint: Freedom of personal gratification vs. controlled societal behavior. 6. MNE Culture vs. Country Culture • MNE Culture: Focuses on decision-making, safety, ethics, and corporate values. • Cross-Vergence: MNE culture often overrides national culture in work environments. 7. Cultural Impact on IHRM Functions Cultural differences influence HR practices in: 1. Recruitment & Selection 2. Training & Development 3. Performance Management 4. Industrial Relations 5. Health & Safety 8. Cultural Influences on Business Practices Culture affects: • Recruitment & hiring processes • Business relationship-building • Communication and multilingualism • Organizational justice perceptions • Decision-making and leadership development • Performance evaluations and feedback • Career expectations and global mindsets Chapter 3 Summary of Neo-Institutional Theory and Its Impact on HRM 1. Neo-Institutional Theory in HRM Institutions shape the organizational environment through three mechanisms: • Coercive Mechanisms: Organizations comply with external pressures from: o Legislation o Government policies o Trade unions and work councils • Mimetic Mechanisms: Organizations imitate others in response to uncertainty, using: o Benchmarking o Industry best practices • Normative Mechanisms: Organizations adopt industry-specific standards from: o Professional bodies o Associations 2. Role of Institutions in HRM Institutions influence HRM through: • Economic Systems: Access to financial resources affects business operations. • Government & Legal Systems: Employment laws and government ownership impact HR policies. • Employment Relations Systems: Regulations on wages and working conditions. • Labour Markets & Education Systems: Availability of skilled human resources. 3. Grouping Countries by Institutional HRM Approaches Countries structure HRM differently based on institutional interactions: • Liberal Market Economies (e.g., US): Market-driven, flexible employment relations. • Coordinated Market Economies (e.g., Germany): Strong collaboration between businesses, government, and labor unions. • Socialist Market Economies (e.g., China): State involvement in labor markets and business practices. 4. Convergence vs. Divergence of HRM Practices • Convergence (Becoming More Similar): o Globalization of economic systems o Standardized HR practices in MNEs o Technological advancements • Divergence (Remaining Different): o HR practices embedded in cultural and institutional contexts 5. The Debate: Convergence, Divergence, or Equilibrium? HRM practices may evolve toward global standardization, maintain national uniqueness, or strike a balance between the two. Chapter 4 Summary of Chapter 4: Organisational Context of IHRM 1. The Influence of Organisational Context on HRM HR does not function in isolation; it is shaped by: • Formal organisational structures: Created to control and coordinate members' activities. • Informal organisational structures: Shared perceptions and work practices influence behavior. • Organisations as open systems: They take inputs, transform them, and produce outputs. 2. Organisational Structure and HRM • Organisations are structured systems designed to achieve goals. • Key elements of structure: o Roles (Who does what?) o Authority system (Who makes decisions?) • Organisations differ in formalisation and centralisation: o Formalisation: Strict policies vs. flexible rules. o Centralisation: HQ-driven vs. decentralized decision-making. • Mechanistic vs. Organic Structures: o Mechanistic: Centralized, highly formalized. o Organic: Decentralized, flexible. 3. Factors Influencing Organisational Structure • Size, strategy, technology, internationalisation, knowledge exchange, cultural differences. • Large firms in different countries tend to have similar structures. 4. National Culture & Organisational Structure • National culture impacts how organisations are structured and accepted. • Examples: o Keiretsu (Japan) o Chaebol (Korea) o Italian Knitwear Clusters 5. Informal Organisation & Organisational Culture • Organisational Culture: Shared assumptions guiding member behavior. • Positive effects: Identity, socialisation, alignment with goals. • Negative effects: Resistance to change, barriers to integration. 6. Multinational Enterprise (MNE) Structures & HRM MNEs coordinate operations across different environments using various structures: • International Division: Centralized unit for international operations. • Functional Division: Departments based on business functions. • Product Division: Structure based on product lines. • Geographic Division: Regions operate semi-independently. • Global Matrix: Dual reporting lines (e.g., to country & product managers). 7. Integration vs. Local Responsiveness in MNEs • Multidomestic Strategy: High local responsiveness, low global integration. • Global Organisations: High global integration, low local responsiveness. • Transnational Organisations: Balance both. • International Organisations: Least internationalised. 8. HRM Challenges in MNEs • Balancing control & coordination using formal and informal mechanisms. • Importance of social capital (relationships, trust, shared norms). 9. Global HR in SMEs • Unique HR challenges: Limited resources, attracting talent, legitimacy issues. • Closer manager-employee interaction, ad hoc HR practices. • "Bleak house" vs. "Happy family" models. 10. Managing Cross-Border Teams • Types: Global, multicultural, transnational, virtual. • Challenges: Managing remotely, redefining management roles. • Best practices: Clear email protocols, trust-building, cultural mentors. 11. The Global Learning Organisation • Firms must facilitate learning across borders. • Knowledge-sharing and intellectual capital are key to global success. Summary of Training and Development in MNEs Introduction To remain competitive in today’s dynamic business environment, organizations must develop employees at all levels and locations. This is achieved through training (skills needed now) and development (preparation for future demands). Key areas include training program creation, HR development evaluation, expatriate preparation, and workforce education. Local Workforce & Competitiveness Workforce assessment begins with literacy and education levels, measured by indices such as the OECD Workforce Potential Index and Global Talent Competitiveness Index (GTCI). • Academic training provides general skills, leaving job-specific training to individuals. • Vocational training aligns closely with industry needs, offering specialized skill development. Training & Development in MNE Operations Training programs vary across cultures, industries, and regulatory environments. Needs analysis helps organizations design appropriate training. Cultural differences impact training investment, with firms in low power distance, high future orientation, and high uncertainty avoidance cultures investing more in employee training. Key Considerations for Local Workforce Training 1. Trainers – Headquarters staff, local trainers, or independent experts? 2. Language barriers – Translation needs and responsibility. 3. Training location – Standardized vs. localized programs, overseas vs. regional training. 4. Delivery methods – Cultural considerations in training approaches. Global Management Development MNEs invest in developing global leaders who operate across national boundaries. Training approaches vary in rigor and feedback, but the goal remains to cultivate managers with a global mindset. Virtual & Global Teams Challenges include geographic dispersion, cultural diversity, time zones, and language differences. Best practices for virtual team leadership include: • Establishing trust • Managing diversity • Monitoring progress through technology • Enhancing visibility of virtual team members Global Leadership Theories & Development The GLOBE study identifies leadership styles that vary across cultures, including charismatic, consensus, technocratic, and political leadership. Effective global executives must: • Adapt to multiple cultures • Be multilingual • Work effectively in international teams Developing a Global Mindset A global mindset enables employees to manage complexity, uncertainty, and multicultural teams. Organizations fostering a global mindset adopt a geocentric approach, recruiting for global potential. Ways to develop a global mindset: • Four T’s (Travel, Training, Teamwork, Transfer) • Exposure to cultural differences • Developing multiple perspectives Expatriate & International Assignments Cross-cultural training improves expatriate success in personal adjustment, relationships, and task performance. Training needs depend on cultural novelty, job requirements, and degree of interaction. Training types include: • Cultural awareness • Intercultural skills • Foreign language training • Family support Challenges & Innovations in Expatriate Training • Short-term assignments receive less training but require rapid adaptation. • Companies experiment with sponsored volunteering assignments for skill-building. • International assignments help develop competencies but do not significantly change personality traits. This structured approach ensures MNEs effectively train and develop their global workforce while adapting to cultural and operational challenges. Chapter 10: Training and Development in MNEs Organizations must train and develop employees at all levels to remain competitive. Training focuses on acquiring skills for current roles, while development prepares employees for future demands. Global training programs consider local workforce characteristics, education levels, and vocational vs. academic training systems. Key Considerations in Training MNE Employees: • Needs Analysis: Determines the gap between employee skills and organizational needs. • Cultural Variability: Training programs differ across cultures, industries, and legal systems. • Training Delivery: Options include headquarters-led, localized, or hybrid approaches. • Global Management Development: MNEs invest in leadership training to develop executives with cross-cultural competencies. • Virtual and Global Teams: Require special leadership strategies like trust-building, clear communication, and technology use. Global Leadership & Expatriate Training: • Leadership development focuses on cultural adaptability, strategic thinking, and managing global complexity. • Expatriate assignments benefit from cross-cultural training, language learning, and adjustment strategies. • Different types of expatriate programs, including short-term assignments and sponsored volunteering, aim to build global experience. Performance Management and Compensation in MNEs High-performance organizations align employee performance with business objectives through performance management systems, which include setting goals, giving feedback, and evaluating results. These systems are influenced by cultural, institutional, and organizational factors. Performance Management in a Global Context: • Cultural Impact: Individualistic cultures prioritize productivity and job performance, while collectivist cultures emphasize group harmony and respect. • Institutional Influence: Laws, employee relations, and data privacy rules shape performance evaluations in different countries. • Performance Appraisal Systems: Organizations must choose between standardizing, localizing, or integrating evaluation methods across subsidiaries. Compensation & Benefits in MNEs: • Challenges: Ensuring pay equity across countries, balancing salaries vs. benefits, and dealing with tax regulations. • Expatriate Compensation: Includes base salary, cost-of-living adjustments, hardship premiums, and relocation allowances. • Compensation Models: o Balance Sheet Approach: Aligns expatriate pay with home-country standards. o Localization & Cost-Cutting: Some firms transition expatriates to local salaries to reduce costs. o Strategic Flexibility: Compensation systems should balance local responsiveness and global consistency. In summary, MNEs must carefully design training, performance management, and compensation systems that align with global business goals while adapting to local cultural and legal differences. Summary of Global Careers and International Assignments Types of International Assignments 1. Traditional Expatriation o Long-term (3–5 years) with family relocation o Logistical and financial support provided o Increasing alternatives to traditional expatriation 2. Alternative Assignments o Short-Term Assignments (3 months–1 year): Focus on projects, skill transfer, minimal family relocation Chapter 12 Summary of Global Careers and International Employment Relations 1. Global Careers 1.1 Traditional Expatriation • Long-term assignments (3–5 years) • Partner and family relocation • Logistical and financial support • Generous compensation 1.2 Alternative Assignments • Short-term Assignments (3 months to 1 year) o No family relocation o Focus on project work, skill transfer, or problem-solving o Salary, pension, and social security handled in home country • Commuter Assignments o Work in another country but reside in home country o Regular travel (weekly or bi-weekly) • International Business Travelers o Short trips (up to 3 weeks) across multiple countries o Purpose: negotiations, conferences, and knowledge transfer • Flex-patriates and Other Arrangements o Rotational or short-term relocation followed by time off at home • Virtual Assignments o No relocation or international travel o Working remotely while collaborating across time zones 2. Self-Initiated Global Mobility (SIEs) • Individuals move abroad without company support • Driven by personal growth, career advancement, adventure, or lifestyle • Temporary intention, not migrants • Careers likened to "rivers"—varied paths rather than corporate ladder • Greater local community integration 3. Cultural Adjustment & Family Considerations 3.1 Cultural Adjustment • Psychological and socio-cultural adaptation • U-Curve Model: 1. Honeymoon – Excitement and curiosity 2. Culture Shock – Frustration and confusion 3. Adjustment – Learning cultural differences, adapting 4. Mastery – Functioning effectively in the new culture 3.2 Family Considerations • Family adjustment critical for expatriate success • Partners and children may struggle more than the expatriate • Dual-career couples face challenges 4. Challenges in Alternative Assignments • Frequent travel can impact family life • Time zone differences affect communication • Negative health outcomes (poor sleep, diet, stress) • Increased workload at home and abroad • HR departments often provide little support 5. Women in Global Mobility • Female expatriates increasing but still underrepresented • Women more likely to be SIEs • Barriers: work–family balance, societal perceptions, host country attitudes 6. Repatriation Challenges • Reverse culture shock upon returning home • Family and career adjustments • Loss of company support • Compensation and status changes 6.1 SIE Repatriation • More control over timing and expectations • Often planned as part of career progression 6.2 Organizational Support for Repatriates • Need structured programs to ease transition 7. Impact of International Assignments • On Employees: Personal and professional growth, but career advancement not guaranteed • On Families: Multicultural exposure, language skills, broader perspectives • On Host Country Nationals: Wage disparities • On Organizations: High investment, ROI considerations 8. Designing a Global Mobility Program • Strategic alignment with business goals • Define expatriation-repatriation cycles • Provide comprehensive support throughout assignments • Continuous monitoring and improvement International Employment Relations 1. Introduction to International Employment Relations (ER) • Rooted in the Industrial Revolution and trade union movements • Unions advocate for wages, benefits, and working conditions • Some unions offer additional services (e.g., training, legal aid) • Unions influence workplace policies through industrial actions 1.1 Types of Trade Unions • General Unions – Open to workers from various industries • Industry Unions – Represent workers in a specific industry • Craft Unions – Occupation-based (e.g., carpenters, plumbers) • Conglomerate Unions – Merged unions for greater power • Enterprise Unions – Exclusive to a single company • Professional/Public Sector Unions – Represent professionals or government employees 2. Evolution of International Labor Relations • Early union movements were international • Post-WWII split between Western-oriented and communist-backed labor groups • Growing interest in cross-border labor cooperation 2.1 Major International Labor Organizations • World Federation of Trade Unions (WFTU) – Communist state-run unions • International Trade Union Confederation (ITUC) – Global trade union umbrella • European Trade Union Confederation (ETUC) – Advocates for EU workers • Trade Union Advisory Committee (TUAC) – Consults with the OECD • Global Union Federations (GUFs) – Industry-specific trade union alliances 3. Employee Voice & Negotiation • Information Sharing – Employer shares company updates • Consultation – Employer seeks employee opinions on changes • Negotiation – Agreements on employment conditions 4. Multinational Enterprises (MNEs) & Unions 4.1 Perceived Negative Actions of MNEs • Relocate work to low-wage, non-unionized countries • Pressure employees to accept lower wages • Use financial resources to outlast labor disputes 4.2 Barriers to Global Labor Bargaining • Differences in labor laws and economic conditions • Employer resistance and lack of centralized union authority • National priorities vary 5. National Employment Relations (ER) Systems • Liberal Market Economies: Companies have autonomy (e.g., U.S., UK) o Corporatist ER: Firms make unilateral decisions o Voluntarist ER: Firms voluntarily engage with unions • Coordinated Market Economies: Government-influenced labor relations (e.g., Germany) o Statutory ER: Legal frameworks dictate union-management interactions • Socialist Market Economies: Government-controlled unions (e.g., China) 6. Union Density & Collective Bargaining • Declining union membership in most countries • Economic changes (e.g., privatization, deregulation) impact union strength • In some countries, collective bargaining applies to non-unionized workers 7. Works Councils & Codetermination • Works Councils – Employee-elected bodies facilitating employer-employee communication • Codetermination – Legal employee participation in company decision-making (e.g., Germany) 8. Employment Relations in MNEs • Influenced by: o HQ country policies o Subsidiary integration o Managerial attitudes toward unions 8.1 ER Strategies in MNEs • Unitarist: Anti-union (common in U.S.) • Partnership: Employer-employee collaboration • Contingent: Adaptation to local labor laws 9. Trade Union Influence on MNEs • Can limit global integration and wage flexibility • Influence corporate strategy through legal action and global alliances 9.1 Union Responses to MNEs • International Coordination – Forming alliances to strengthen influence • Regulatory Pressure – Working with international organizations like: o ILO (International Labor Organization) o OECD (Organization for Economic Cooperation and Development) o UNCTAD (United Nations Council on Trade and Development) 10. European Union & Employment Relations • EU Social Charter guarantees worker rights • European Works Councils Directive mandates employee representation 10.1 Effectiveness of European Works Councils • Influenced by business alignment, management policies, and ER structure 11. MNEs & Litigation Risks in ER • Rising legal cases holding MNEs accountable for employment rights violations • MNEs face lawsuits in home countries for foreign labor practices Conclusion • Global careers and international employment relations continue to evolve with changing economic, social, and legal landscapes. • MNEs must balance corporate objectives with labor rights and employee well-being. • Effective global mobility programs and ER strategies are crucial for sustainable business operations.