Making an effective selection decision for an overseas assignment can prove to be a major problem. Typically, this decision is based on international selection criteria, which are factors used to choose international managers. These selections are influenced by the Multinational Corporations experience and often are culturally based. Sometimes as many as a dozen criteria are used, although most Multinational Corporations give serious consideration to only five or six. 1. Adaptability to Cultural Change Overseas managers must be able to adapt to change. They also need a degree of cultural toughness. Research shows that many managers are exhilarated at the beginning of their overseas assignment. After a few months, however, a form of culture shock creeps in, and they begin to encounter frustration and feel confused in their new environment. One analysis noted that many of the most effective international managers suffer this cultural shock. Organizations examine a number of characteristics Continue reading
International HRM
International Compensation Management
Designing and developing a better compensation package for HR professionals for the international assignments requires knowledge of taxation, employment laws, and foreign currency fluctuation by the HR professionals. Moreover, the socio-economic conditions of the country have to be taken into consideration while developing a compensation package. It is easy to develop the compensation package for the parent country national but difficult to manage the host and third country nationals. When a firm develops international compensation policies, it tries to fulfills some broad objectives: The compensation policy should be in line with the structure, business needs and overall strategy of the organization. The policy should aim at attracting and retaining the best talent. It should enhance employee satisfaction. It should be clear in terms of understanding of the employees and also convenient to administer. The employee also has a number of objectives that he wishes to achieve from the compensation policy Continue reading
International Business Negotiations
In a number of cases the foreign market entry and strategy implementation involve negotiation with the government of the foreign country and / or foreign firm. International business plans “are always often implemented through, face-to-face negotiations with business partners and customers from foreign countries. The sales of goods and services, the management of distribution channels, the contracting for marketing research and advertising services, licensing and franchise agreements and strategic alliances all require managers from different cultures to sit and talk with one another to exchange ideas and express needs and preferences. Executives must also negotiate with representatives of foreign governments who might approve a variety of their marketing actions’ or in fact be the actual ultimate customer for goods’ and services. In many countries governmental officials may also be joint venture partners, and in some cases vendors. International business negotiations are deliberate interactions of two or more social units (at Continue reading
Working Across Boundaries
During the last decade, the concept of working across boundaries has become a popular concept. The basic premise is that individuals and organizations need to traverse boundaries if they are to achieve their goals. Essentially earlier concepts of fixed organizational demarcation lines no longer apply in modern-day business concepts. Within the organizational framework, the concept of boundaries can become a reasonably complex issue. There still remains an active debate as to whether the definitions of boundaries are realistic, objective, or imagined. The concept has become more complex with the use of outsourcing and Public/Private partnerships in terms of lines of demarcation and authority. The concept of boundaries within organizations takes on different shapes and forms. Much of this has to do with social and knowledge boundaries. The explosion in technological and communication advances has simplified the concept of working across boundaries. Despite the fact that organizations still are challenged to Continue reading
What is HR Professionalism?
In order to understand what HR professionalism is we first have to break down what it means to be a professional. The term professional could be an individual who is a qualified member of a professional body, someone who continuously updates their knowledge, is competent, and uses their skills in practice. Professionalism could be interpreted as the use of specialist knowledge necessary to perform a particular type of work or role. Professionals are associated with increased training, the development of professional knowledge standards, and a requirement to update this knowledge. One way the CIPD (The Chartered Institute of Personnel and Development) measures professionalism is through their code of conduct which can be broken down into 4 sections as shown below: Professional Competence and Behaviour Ethical Standards and Integrity Representative of the Profession Stewardship. These codes of conduct apply to everyone who is registered with the CIPD regardless of size, sector, Continue reading
Importance of International HRM
Various threats generated by the liberalization of an economy can be met only through bringing corresponding changes in management practices including practices related to International HRM. In the newer management practices, more emphasis has been given to International HRM because of the following factors: 1. Emphasis on Core Competency. Post-liberalization, many organizations have started focusing on their core competence and businesses are being organized around that. Core competence is a unique strength of an organization that may not be shared by others. This may be in the form of unique financial resources (finance available at a much lower cost), manpower resources, marketing capability, or technological capability. If the business is organized on the basis of core competency, it is likely to generate competitive advantages. Because of this reason, many organizations have restructured their businesses-divesting those businesses which do not match core competence such as Tata Group divesting many businesses and Continue reading