IHRM final – Flashcards
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IHRM definition
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managing human resources in enterprises in the global environment
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9 drivers of international business
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1. trade agreements 2. searching for new markets and lower costs 3. global communication 4. new technology 5. improving global education 6. travel and migration 7. knowledge sharing 8. e-commerce 9. homogenization of culture and consumer demands
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trade agreements
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trade treaties/decreased trade barriers/open markets
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4 settings for IHRM
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1. headquarters of multinationals 2. home country subsidiaries of foreign owned firms 3. Domestic firms 4. Government/non-government agencies and orgs
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what are headquarters of multinationals?
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HRM professionals work in central/regional headquarters (most common for IHRM)
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what policies do they use for foreign subsidiaries?
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either parent company or host country
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what are home country subsidiaries of foreign owned firms?
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HR manager working in home country but at the local subsidiary of a foreign owned firm
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what policies do they use?
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general local and organizational culture combined
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strategic IHRM definition
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creating/implementing IHRM policies that help achieve international strategy
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5 stages of internationalization
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1. portfolio investment 2. sales subsidiary/local sales office 3. licensing/franchising/contracting/subcontracting 4. Wholly-owned subsidiaries 5. International joint venturers/internation M&A/international alliances
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international joint venture definition
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two or more firms join to create a legal entity
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alliance/partnership/consortia
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informal or formal collaborations that do not result in legal entities
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outsourcing
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subcontract business processes to other firms in home or foreign countries
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off-shoring
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moving a business process to another country to lower costs
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integration
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the extent to which subsidiaries and headquarters are unified
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local responsiveness
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extent to which subsidiaries are guided by local differences
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4 types of strategic business approaches
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1. global 2. international 3. multi-domestic 4. transnational
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global approach
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high integration, low local responsiveness receptive
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international approach
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low integration, low local responsiveness
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multi-domestic approach
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low integration, high local responsiveness autonomous
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transnational approach
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high integration, high local responsiveness active
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orientation of senior executives definition
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how much MNE headquarters dominate subsidiary HR practices vs. localization
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3 types orientations
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1. ethnocentrism 2. polycentrism/regiocentrism 3. geocentrism
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ethnocentrism definition
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using home country standards for international management
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polycentrism/regiocentrism definition
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using host country standard for international management
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geocentrism definition
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using both home and host standards for international management
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centralization is similar to _____ while decentralization is similar to ______
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a. integration b. local responsiveness
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convergence definition
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use of parent-company policies throughout global operations
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divergence definition
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culture differences are considered
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organizational structure definition
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formalized arrangement of organizational components
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organizational design definition
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a process used by management to arrange the various components
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3 levels of structural development for overseas operations
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1. international 2. multidimensional 3. global/transnational
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what is international structural development
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a. subsidiary is a start-up to establish international presence b. not much integration or local responsiveness c. subsidiaries are quite dependent on headquarters
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what is multi-dimensional structural development
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a. subsidiary is established and used to operate the international strategy b. strong local responsiveness and weak integration
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what is global/transnational structural development
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a. subsidiaries become leaders in market b. global: subsidiaries still heavily managed by headquarters c. transnational: subsidiaries are global interdependent networks
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globally integrated structure definition
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everything is integrated into production and services with different capabilities around the world
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functional division structure definition
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departments organized by function
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product division structure definition
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departments are organized by product divisions that have all functions in them
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global matrix division structure definition
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mix of the first two, two lines of reporting with managers and product groups
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3 challenges of cross-border teams
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1. managing people you can't see 2. re-defining the role of management 3. virtual teams
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3 layers of culture
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1. invisible culture 2. hidden culture 3. surface culture
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what is invisible culture
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implicit culture, truths and values
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what is hidden culture
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philosophies, right and wrong
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what is surface culture
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things like clothes and eating
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hofstede
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classified countries based on certain characteristics
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trompenaars
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found that people act/respond as culture has taught them
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4 general patterns of cross cultural business behavior
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1. deal vs. relationship focus 2. informal vs. formal cultures 3. rigid vs. fluid time 4. expressive vs. reserved cultures
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cross-vergence
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intermixing home and host systems
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glocalization
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optimal tradeoff between globalization and localization
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5 hofstede dimensions
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1. power distance 2. individualism vs. collectivism 3. masculinity vs. femininity 4. uncertainty avoidance 5. long-term vs. short-term orientation
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international assignee
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an employee who is moved from one country to another for a period of more than one year
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sourcing
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process of finding candidates from geographically dispersed labor markets (internally or externally)
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selection
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the process of gathering and analyzing information about applicants to select the most suitable person
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process of selecting and evaluation an international assignee
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1. analyze job requirements 2. analyze country 3. evaluate candidates 4. prep candidates 5. correct length 6. repatriation preparation
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4 candidate selection factors
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1. maturity 2. foreign language ability 3. positive attitude 4. personal characteristics
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3 types of international assignment failures
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1. dropout 2. brownout 3. turnover
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what is a brownout
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when the assignee is unable to successfully perform their job
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total compensation
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total pay made up of base pay, pay incentives, and benefits
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fair pay
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pay employees view as equitable
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internal equity
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pay is fair within the firm
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external equity
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pay is fair compared to other firms
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fixed vs. variable pay
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is salary more base pay or variable pay (base pay is declining)
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performance vs. membership
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is pay based on performance or time/ranking within the firm
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job vs. individual pay
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do you pay based on the job or based on an employees abilities
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egalitarianism vs. elitism
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are most employees under the same pay system or is it different at different hierarchical levels
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below market vs. above market compensation
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most firms pay some employee groups above and some below
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open vs. secret pay
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open pay generally means less dissatisfaction and fairer pay decisions
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centralization vs. decentralization of pay decisions
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does the HR department or managers decide about pay
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distributive justice model
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employees exchange their contributions to the firm (input) for pay (outcome) and compare their input to outcome, and that ratio to the ratio of their peers
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the labor market model
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wage rate is set where supply of labor equals demand for labor and is fair when firms pay the going rate
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job-based approach to compensation
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things get done by people paid to perform very defined jobs that are aimed to complete very specific tasks, the most pay is allocated to the most important tasks
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3 steps to developing job-based plans
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1. achieve internal equity 2. achieve external equity 3. achieve individual equity
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skill-based approach to compensation plans
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assumes workers should be paid by how flexible and capable they are at doing the most
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pay-for-performance systems
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incentive systems
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individual-based plans
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merit pay or bonus programs
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team-based plans
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rewards all members equally and is easier to measure performance (especially w intertwined tasks)
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plant-wide plans
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reward all workers in a plant or business unit on the performance of the whole plant or unit
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gainsharing
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most common way to do plant-wide, everyone shares in the gains or savings of the plant (scanlon or rucker plan)
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corporate wide plans
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reward employees based on entire corporation's performance
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profit-sharing
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no reward for improvements, portions of profit are allocated to employees
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employee stock ownership plans
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based on corporation and measured by stock price, employees are given stock
