The Role of Globalization in HR Policy and Practice - Review Notes

Human Resource Management Revision Article Series

More and more large companies, as well as companies that account for a significant amount of business in the world or in any single country are globalizing. Hence the demand for employees, leaders and managers with global skills is increasing. HR managers are on one side expected to find staff with global skills, train them for global skills and do all other HR activities with focus on globalization and regional and national cultural and economic differences and also they themselves need to have global skills as HR managers.

1. Describe the different ways companies may engage in international commerce.

Contract manufacturing
Management contracts
Foreign direct investment
- Joint ventures
- Strategic alliance
- Sole ownership

Approaches to International HRM - A Paper

Paper by Dr. Hilary Harris

The different IHRM strategies.

Four general internationa human resource strategies are identified.

1. Ethnocentric appoach

Parent-country nationals (PCNs) are sent for top and middle level management positions. Rank-and-file workers are often locals. Pay for the locals will tend to be based on the local market place. Pay for the PCNs will tend to be related to the home country.

2. Polycentric philosophy

In this approach, during the early stages host-country nationals (HCNs) tend to fill middle- and lower-level positions in management. As time progresses, key management positions are also filled by HCNs. This approach believes the foreign subsidiaries are best managed by locals having successful track record in local markets.

3. Geocentric approach

In this approach, organizations begin considering themselves as having global workforce that can be deployed throughout the world based on the requirement of skill sets. Talent is identified and ranked and nationality is not an issue in talent identification for any post or job, role or position in these organizations. The compensation is also based on a global policy and the contribution of the individual to the organization on a global basis.

4. Regiocentric approach

In this approach, regions are emphasized and workforce is considered as region workforce that can be deployed within that region irrespective of the nationality of the person in the region. The compensation patters differ from region to region.

Global Mindset and Skills of Global Managers

One expert describes three key skills: Integration that can take care of country and cultural differences. Ability to influence locals to accept world standards and commonalities in work practices. Cross-fertilization ability to recognize the best from various places and adapt it at other places.

Another description is: Global managers have an in-depth understanding world markets (demand side). They master all elements of the global supply chain and distribution channels (supply side). Third they skillfully embrace cultural diversity.

Global mindset

Global mindset has requires knowledge about the demand side and supply side of the market and strategies to create a successful and profitable business out of them. It also needs cross cultural mindset that respects and understands other cultures. It requires willingness to learn some foreign languages, nonverbal communication symbols of other cultures, and a spirit of generosity, magnanimity and tolerance to give the opportunity to others to proceed and define own directions in the context of their cultural background.
(Reference: Jean-Pierret Jeannet, Managing with a Global Mindset (London: Pearson Education, 2000))


Chapter Learning Objectives

After reading this chapter, you should be able to

Describe the different ways companies may engage in international commerce.

Explain the different international business strategies.

Explain how international human resource management (IHRM) differs from traditional, domestic HRM.

Understand the different IHRM strategies.

Describe the trends relating to international job assignments.

Understand the issues and trends relating to the development of globally competent business leaders.


How to become global organization

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Updated 10.1.2012
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  1. It requires willingness to learn some foreign languages to write a real estate solicitation letter. Pay for the locals will tend to be based on the local market place. Pay for the PCNs will tend to be related to the home country.

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