International Human Resource

Management (IHRM)

International Management:
an Overview (Master 1)

Yohan Bernard

2009 / 2010

Human Resource Management (HRM)

HR planning Staffing

Performance
Labor relations
management

Compensation Training and

and benefits development

2009 / 2010

1
International HRM (Morgan, 1986)

2009 / 2010

International assignments create

expatriates (Dowling and al., 2004)

2009 / 2010

2
Staffing: Ethnocentric approach

Country B
Country A Country C

Country H
Headquarter Country D
(Parent-country)

Country G Country E
Country F

2009 / 2010

Staffing: Polycentric approach

Country B
Country A Country C

Country H
Headquarter Country D
(Parent-country)

Country G Country E
Country F

2009 / 2010

3
Staffing: Geocentric approach

Country B
Country A Country C

Country H
Headquarter Country D
(Parent-country)

Country G Country E
Country F

2009 / 2010

Staffing: Regiocentric approach

Country B
Country A Country C

Country H
Headquarter Country D
(Parent-country)

Country G Country E
Country F

2009 / 2010

4
Expatriation problems

The job The local insertion

• Responsibilities / Autonomy • Preparation

• Visibility and recognition • Culture shock
• Learning • Local acculturation

• Criticality of the function • Political / social skills

• Global networking

• Support from headquarters

The career The family

• Selection • Adaptation
• Rotation • Education
• Re-entry

2009 / 2010

Expatriate Failure Rates

Recall Rate Percent Percent of Companies
US Multinationals
20 - 40% 7%
10 - 20% 69%
< 10 24%
European Multinationals
11 - 15% 3%
6 – 10% 38%
<5% 59%
Japanese Multinationals
11 - 19% 14%
6 – 10% 10%
<5% 76%
2009 / 2010

5
 Expatriates’ acculturation (‘the four Fs’)
Expatriate culture shock

Physical differences Cultural differences

Level of
disorientation
Stress
Unease

FLIGHT FIGHT FIT FOLLOW

• Reject • Hostility • Interested • Enthusiast
• Retreat • Disgust • Look for contacts • Adapt local practices
• Insulate • Disapprove • Learn about culture • Local companion

The isolated The militant The cosmopolitan The assimilated

expatriate expatriate expatriate expatriate

2009 / 2010
Source: Lasserre (2007)

The six major components of

the expatriation policy

Selection and
Strategic vision
preparation

Career follow up Compensation

Support Tenure

2009 / 2010
Source: Lasserre (2007)

6
Three modes of transfer policy (Edstrom and
Galbraith, 1977)

Filling position: the classic policy of expatriation

for key managers and technical support transfer

Develop manager: a policy designed to utilize
international postings as an instrument of
developing management talents and skill
developments

Develop organization: the main objective is to
develop the global strategic capabilities of the
company

2009 / 2010

Key success factors in international work

assignment (Stahl, 2001)

Tolerance of ambiguity

Behavioral flexibility

Goal orientation

Sociability and interest in other people

Empathy

Non-judgementalness

Meta-communication skills

2009 / 2010

7
 Relative Cost of Living in Selected Cities
Tokyo Frankfurt
Oslo Beijing
Zurich Moscow
Hong Kong Rome
Copenhagen Tel Aviv
Paris Mexico City
London Toronto
New York Prague
Singapore Jakarta
Stockholm Warsaw
Seoul Kuala Lumpur

New York = 100 2009 / 2010 New York = 100

A Typical Balance Sheet

Home and
Host-
Country
Income Income
Taxes Taxes Premiums
and
Incentives
Income Housing Income
Taxes Housing Taxes
Housing Housing
Goods and
Goods and Goods and Goods and
Services Services Services Services
Reserve Reserve Reserve Reserve

Home-country Host-country Host-country Home-country

salary costs costs paid by equivalent
company and
2009 / 2010 purchasing
Source: Deresky (2006) from salary power

8
The length of expatriate assignments

The time needed to learn the rules of business in

the country and to build the relationships

The importance of personal relationships in the job
and the required continuity of the task

The contextual hardship of the country

The company's policy with regard to career
development.

2009 / 2010

Repatriation of expatriates

Didn’t know what position they hold upon return.

Firm vague about return, role and career

progression.

Took lower level job.

Leave firm
within one year.

Leave firm within three years

10 20 30 40
2009 / 2010
50 60 70 %

9
Repatriation of expatriates

Over there, you are the big fish

in the small pond. Back home,
you return to being the small
fish in a big pond.

2009 / 2010

The managerial issues in localization

Retention and
Recruitment career
management

Cultural
differences

Reward Performance
practices evaluation

2009 / 2010

10