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International Human International Human Resources StrategyResources Strategy
Internationale UnternehmensführungAo. Univ.-Prof. Dr. Josef Windsperger
BIART SébastienFLAMAND AstridKAL Ali
OverviewOverview
• Introduction
• Emerging markets
• Knowledge-based view of the firm
• International staffing strategies
• Global mindset
• Model of management staffing strategy for emerging markets
• Conclusion
• Case study: Gillette
Introduction - 1Introduction - 1
• Globalization
4 drivers :
• Market Drivers
• Cost Drivers
• Competitive Drivers
• Government Drivers
Introduction - 2Introduction - 2
Need for completely new competitive differentiation
Importance of development and retention of globally
efficient managers
SIHRM
= Strategic International Human Resources
Management
Emerging marketsEmerging markets
• Emerging markets
• Characteristics :
• Low level of economic development
• Rapidly expanding population
• Acceptable opportunity / risk ratio
• Example : Mexico, Poland, China, etc.
Knowledge-based viewKnowledge-based view
• Main barrier to knowledge transfer
• Firm = institution for integrating knowledge
• Development by selecting and retaining
global managers with :
• Local social knowledge of emerging markets
• Understanding of the global objectives of the
organization
International staffing International staffing strategiesstrategies
• 3 kinds of approach :
• Ethnocentric
• Polycentric
• Geocentric
Ethnocentric approachEthnocentric approach
• Tight control of HQ
• Key positions filled by PCNs
• Drawbacks :
• Slow adaptation of PCNs
• Limited promotion opportunities for HCNs
• PCNs not always cultural sensitive
Polycentric approachPolycentric approach
• Scattered control through different HQs
• HCNs are recruited to manage foreign
subsidiaries
• Drawbacks :
• Loss of control
• Limited opportunities for HCNs to gain
experience outside of their own country
Geocentric approachGeocentric approach
• Best people for key jobs, regardless of nationality
• Development of a pool of senior international managers
• Reduces identification of managers with subsidiary units
Global mindsetGlobal mindset
• It a way of being rather than a set of skills
• It means the ability to scan the world from a broad perspective
• Need for knowledge and skills to sustain and develop it !
Managerial mindsetsManagerial mindsets
• The defender
• The explorer
• The controller
• The integrator
Model of management Model of management staffing strategystaffing strategy
• Analyse of the contextual factors influencing the staffing choices
• Based on knowledge-based view of the firm
• Consists of 4 propositions
The modelThe model
Firm global HRM orientation
(i.e. Geocentric Global Mind-Set)
Percieved Value of Taciteness of
Local Country Knowledge
RELEVANCE OF THE CONTEXT OF HOST COUNTRY IN EMERGING MARKETS
Economic level difference
Cultural distance
Variability
CONTROL VARIABLES
Industry structure,MNC structure,
Etc.
Equivocality of subsidiarityPerformance goals
Value-AddingStaffing Choices
For Emerging Markets
Teachability
Codifiability
Complexity
ExpatriateHCN
TCN
Inpatriate
The degree of the firm’s geocentric
strategic HRM orientation will be
positively related to the
perceived value of tacit local
knowledge for the firm’s strategy
in emerging markets
Proposition 1Proposition 1
The modelThe model
Firm global HRM orientation
(i.e. Geocentric Global Mind-Set)
Percieved Value of Taciteness of
Local Country Knowledge
RELEVANCE OF THE CONTEXT OF HOST COUNTRY IN EMERGING MARKETS
Economic level difference
Cultural distance
Variability
CONTROL VARIABLES
Industry structure,MNC structure,
Etc.
Equivocality of subsidiarityPerformance goals
Value-AddingStaffing Choices
For Emerging Markets
Teachability
Codifiability
Complexity
ExpatriateHCN
TCN
Inpatriate
Proposition 2Proposition 2• Low difference in economic development and
low cultural distance between home and host countries will increase the association between the firm’s TMT’s global mindset and the perceived value of the tacit local knowledge.
• High difference in economic development and high cultural distance between home and host countries will reduce the association between the firm’s TMT’s global mindset and the perceived value of the tacit local knowledge.
The modelThe model
Firm global HRM orientation
(i.e. Geocentric Global Mind-Set)
Percieved Value of Taciteness of
Local Country Knowledge
RELEVANCE OF THE CONTEXT OF HOST COUNTRY IN EMERGING MARKETS
Economic level difference
Cultural distance
Variability
CONTROL VARIABLES
Industry structure,MNC structure,
Etc.
Equivocality of subsidiarityPerformance goals
Value-AddingStaffing Choices
For Emerging Markets
Teachability
Codifiability
Complexity
ExpatriateHCN
TCN
Inpatriate
Proposition 3Proposition 3
In emerging markets, equivocality of subsidiary goals to corporate management is positively related to the perceived value of tacit local knowledge for the firm.
The modelThe model
Firm global HRM orientation
(i.e. Geocentric Global Mind-Set)
Percieved Value of Taciteness of
Local Country Knowledge
RELEVANCE OF THE CONTEXT OF HOST COUNTRY IN EMERGING MARKETS
Economic level difference
Cultural distance
Variability
CONTROL VARIABLES
Industry structure,MNC structure,
Etc.
Equivocality of subsidiarityPerformance goals
Value-AddingStaffing Choices
For Emerging Markets
Teachability
Codifiability
Complexity
ExpatriateHCN
TCN
Inpatriate
Proposition 4Proposition 4
• If the value of the local tacit knowledge is perceived as high by the firm management, then the preferred management staffing strategy in emerging markets will be impatriation
• If the value of the local tacit knowledge is perceived as low by the firm management, then the preferred management staffing strategy in emerging markets will be expatriation
The modelThe model
Firm global HRM orientation
(i.e. Geocentric Global Mind-Set)
Percieved Value of Taciteness of
Local Country Knowledge
RELEVANCE OF THE CONTEXT OF HOST COUNTRY IN EMERGING MARKETS
Economic level difference
Cultural distance
Variability
CONTROL VARIABLES
Industry structure,MNC structure,
Etc.
Equivocality of subsidiarityPerformance goals
Value-AddingStaffing Choices
For Emerging Markets
Teachability
Codifiability
Complexity
ExpatriateHCN
TCN
Inpatriate
Value-adding staffing Value-adding staffing choices (1)choices (1)
•Expatriates:
•cost/failure/performance records
are questionable
•Reintegration problems
•Dual-career couple (women…)
Value-adding staffing Value-adding staffing choices (2)choices (2)
• Inpatriates:• linking-pin role between headquarters and the
foreign subsidiary .• provide valuable specialized knowledge input
about HR function in emerging markets• provide mentoring to high potential managers
from emerging host country nations to insure a succession plan
• BUT must not be viewed as peripheral but as a part of the core global management team
•Globalization strategy = insure an adequate number of qualified global managers
•Inpatriation fulfils the need for social knowledge in global decision making
•Concept should be adapted to particular situation
ConclusionConclusion
Case studyCase study
Gillette’s Prescription for International Business Success :
In-House Training and Expat Experience
Background on GilletteBackground on Gillette
• Multinational company (57 manufactures in 28 countries)
• 90 years of international experience• Divisions / Geographic groups• Regiocentric approach to
international management regiocentric approach to international management
International HR strategyInternational HR strategy
“ One of my key objectives is to identify, recruit and develop competent managers. I am confident that these good people will generate a flow of business growth and profits for the future. ”
- Dieu Eng Seng, Vice-President Asia Pacific
Key StrategiesKey Strategies
1. International Trainee Program
2. Development through expatriate experience
International Trainee International Trainee ProgramProgram
• Program launched in 1983
• “Inpatriation” of students from subsidiary countries
• 18 months of training at regional headquarter (Boston, London or Singapore)
ITP : 3 main objectivesITP : 3 main objectives
• Personal development
• Better communication between headquarters and subsidiaries
• Emergence of a new breed of multilingual, open-minded global managers
Development trough Development trough expatriate experienceexpatriate experience
• Hiring and assigning foreign nationals to staff operations not only in their home countries but around the world
• They teach and develop other potential managers within the organization (next generation…)