HR for Intl Business
Human Resource considerations for International Business Management
updated 2014 Aug 5th
.
see also    witiger.com/marketing/motivation.htm
               witiger.com/marketing/measuring-human-capital.htm
 
. This page used in the following courses taught by Prof. Richardson
.
MGTC41
MGTC44, MGSC44
MGTC46, MGSC44
CCT224
MRK460
IBM 600
.
.
including material from Chpt 16
Global Human Resource Management
in
Global Business Today
Hill, McKaig ... and Richardson
.... online learning centre of the publisher http://www.mheducation.ca/highereducation/products/9780070401792/global+business+today/
2nd Edition 3rd Edition 4th Edition
..
INTRODUCTION Why have Human Resource considerations become so important in International Business Management?

The environments within which international business is carried out in the first decade of the new millenium is increasingly competitive.

  • The technological environment is such that technology supremacy is fleeting and since it does not last long - cannot be considered a strong advantage of a company.
  • The economic environment is effected by too many uncontrollable factors which means a stable economic situation is less certain. The economy can be effected negatively by things which large companies and federal governments have no control over.
  • The political environment responds to the socio-cultural environment - which in many countries, is undergoing the stresses of large immigration movements and cultural and religious frictions. Very few regions of the world are free of conflict so no place has a distinctively advantageous political environment
  • The geographic environment, long affected by rampant pollution, deforestation, greenhouses gases from autos and factories, acid rain from coal fired generators, declining water reserves etc. etc. has seen a bit of Mother Nature fighting back in 2003-2008 with some spectacular events such as a massive tidal wave, numerous destructive tornadoes, larger and more frequent hurricanes, volcanoes, mudslides, sandstorms, drought and crop failures an so on. As a consequence of the changes to and changes by the geographic environment, almost everyplace on the planet has had to endure weather that has negatively effected business and agricultural productivity.
The one area in which companies can become more competitive is having the best people and having those people serve their customers in the best way.

Therefore one of the key things for companies in the "new new" economy is to focus on the people in the company, and the customers they serve - ergo, Human Resource Management has become a "big issue" for international business.

WTGR

.dd
http://www.youtube.com/watch?v=I847nFEnPmg Prof. Chris Bovaird (UTSC), very experienced in international business management issues, commenting on the importance of "having the best people" to allow a company to have a competitive advantage in the second decade of the new millenium.

Bovaird explains that for economies where the majority of the business is the provision of services, "the one single key differentiator for corporations over the next generation or two will the ability to attract and retain clever, innovative, flexible, willing, intelligent people - people will be the outstanding resource which will make the west succeed"

dd

 
KEY POINTS Although Dilbert has many jokes about Catbert, the "Evil H.R. Director", fact is, morale of employees is increasingly important, especially in international business,
(see  witiger.com/marketing/motivation.htm )

since companies are more and more challenged to cut expenses, and the # 1 expense cut is staff cuts - meaning, more productivity out of fewer people.

The way to get more productivity is partly by enhancing morale.

WTGR

.
 
 

Chpt 16
Expatriate Managers (expats)

simply defined as a citizen of one country working abroad in another country

Another slang expression often used is "the expat community" to describe a group of foreign country nationals, most often educated executives with good jobs, benefits and privelages, who can sometimes be seen by the local population as behaving in a way that is "elite".

..

Chpt 16
Types of Staffing policies
  • Ethnocentric Staffing Policy
    • when the company sends people from the country of the home company, overseas
    • all senior managers are people who are "parent-company nationals"
    • eg. a Korean company operating in Canada like Hankook Tires, all executives are Koreans from Korea
    • not such a popular policy among large multi-nationals in Y2K and beyond
      • can lead to resentment among motivated and educated local managers
      • can effect high staff turnover among junior managers
  • Polycentric Staffing Policy
    • when the company allows local staff to rise to the executive level and be managers
    • like Doug Wilson, President and C.O.O. of SONY Canada
    • host country managers less likely to make mistakes arising from cultural understandings
    • cheaper than expatriate managers
    • negatives - creates a gap between head office and regional offices
  • Geocentric Staffing Policy
    • when the company uses staff in foreign operations - no matter what country they come from
    • expensive to implement
    • inreased training and relocation costs
...
m
Global HR Challenges

Things that make it difficult for companies to manage Human Resources situations in other countries.

    o Compensation varies
    o Labour Laws
    o Social-Cultural Environment

mm
Compensation varies Compensation varies

Software development in India costs $15-$20/ hour including the cost of the hardware, software and a satellite link. Compare this with $60-$80/ hour in the US
- still true in 2009?

from http://home.alltel.net/bsundquist1/gcib.html
Foundry workers (casting metal things) in India earn $1 for working an 8-hour day

Mexican auto industry wages and benefits average $4.00 hr, vs. $30 hr in the US

Despite seemingly low wages and wretched conditions, Mexico is losing garment assembly jobs to Central America, call centers to Argentina, data processing to India, and electronics manufacture to China
Joel Millman, David Luhnow, "Decade After NAFTA, Prospects for Mexico Seem to be Dimming", Wall Street Journal, 2003
Japanese companies can hire 3 Chinese software engineers for the price of one in Japan (Thomas L. Friedman, "Doing our homework", Pittsburgh Post Gazette, 6/25/04).

Vietnamese Nike workers earn $1.60/ day, while three simple meals cost $2.00

m
Labour costs in China
 http://factsanddetails.com/china.php?itemid=367&catid=9&subcatid=60#410
Jeffrey Hays explains
"One of Chinaís problems is that while it produces lots of low skill factory jobs it isnít creating enough good job for college graduates."

reliable figures - there are none
"Wages in northern China are as much 20 percent lower than those in southern China."

2010 Beijing city government raised the minimum wage by 20 percent to $141 a month.

2012 Shanghai, China's richest city, increased the wage by 13 percent to 1,450 yuan ($230) a month starting in April 2012,

dm
student Yingyan X. in MRK460 in March 2014 provided some updates on wage rates in China.
 
Labour costs in China

source:  http://www.tradingeconomics.com/china/wages-in-manufacturing
which is in turn sourced from the National Bureau of Statistics of China
- validity - generally speaking, students should appreciate that any time statistics are provided by a government agency the degree of accuracy is always effected by the "political environment".

Yingyan summarizes saying
"In 2013, the average yearly wage in China is 41650 CNY, which is approximately 6700 USD. However, ten years ago, the yearly average wage is much lower: in 2004, the average yearly wage in China is 14033 CNY, which is  approximately 2300 USD. "
 

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Labour costs in various major cities of the world compared 
- based on U.S. dollars per hour

supplied by student Ashok S from MGTC44 in March 2010

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Labour costs in various countries compared to South Korea

source: http://www.global-production.com/scoreboard/indicators/labourcost.htm

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Labour costs in various European countries compared to Germany
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Labour costs in various countries compared to  Canada
dd
Labour Laws, Rules and Regulations Labour Laws, Rules and Regulations

Minimum wage in Mexico is $0.50/ hour. In one US auto plant in Mexico, the workers went on strike. The Mexican police shot several and put the strikers back to work-and cut their wages 45%.

Nobody has ever been shot by police for being on strike in Canada !!!
 

m
Social-Cultural Environment
    o Language issues
    o Religious practices
                Canada
             - Christmas & New Years & Canada Day
                      + Chinese New Year
                      + Ramadan
                      + Jewish High Holidays
    o Gender issues
    o Vacations and holidays
m
Social-Cultural Environment
Social-Cultural Environment
  • effects Canadian managers operating Canadian companies overseas
  • effects Canadian managers operating in large "multi-cultural" cities in Canada
  • effects Foreign Company managers operating Foreign Companiesin Canada
m
Canadian managers operating Canadian companies overseas
    • Canadian managers of "european background"
    • Canadian managers who's background matches the region in which the company operates
        • eg. Canadian IT company using Chinese-Canadian managers in China
m
Canadian managers operating in large "multi-cultural" cities in Canada
m
  • Canadian managers operating in large "multi-cultural" cities in Canada 
      • Canadian managers who's background matches the workers in the company
          • eg. Canadian ISP company using Canadian-Desi for call centre employees from from India, Pakistan, Bagladesh and Sri Lanka
    m
    Foreign Company managers operating Foreign Companies in Canada
      • Foreign Company managers using English to manage Canadians of European Background
      • Foreign Company managers communicating and managing employees in Canada, who do not have English as a first language
          • eg. Japanese auto executives managing employes of South-Asian heritage
    m
    Social-Cultural Environment - "Managing Diversity"

    "Programs or corporate environments that value multiculturalism must answer hard questions about managing diversity."

    Promoting Diversity
    - equal treatment ?
    - or differential treatment? 

    Antidiscrimination laws in Canada and other OECD countries require that employers do not treat applicants for jobs, and employees, differently.

    Treating people "equally" can be both a positive and negative for ethnic minorities and those who laud and "celebrate diversity".

    For example - If we treated people "equally", we'd have just one written drivers test - in English
    from http://www.referenceforbusiness.com/encyclopedia/Mor-Off/
    Multicultural-Workforce.html#MANAGING_DIVERSITY
    m
    Social-Cultural Environment - "Managing Diversity"

    "On the other hand, treating people differently often creates resentment and erodes morale with perceptions of preferential treatment."

    Some employees resent other employees who gets special consideration for holidays, or prayer times, or special food considerations.

    "Other questions to be answered are: Will the company emphasize commonalities or differences in facilitating a multicultural environment? Should the successful diverse workplace recognize differentiated applicants as equals or some as unequals? How does the company achieve candor in breaking down stereotypes and insensitivity towards women and minority groups?"

    How do you make decisions about managing situations where it might be considered "favourtism" to make allowances or considerations for a special category of "diversity"?

    • If 9 students in a class of 35 ask for the exam to be on a different day 

    • - do you?
    • What if it is 4, how about 2?
    from http://www.referenceforbusiness.com/encyclopedia/Mor-Off/
    Multicultural-Workforce.html#MANAGING_DIVERSITY
    m
    http://www.apmforum.com/toc.php This web site discusses HRM issues specific to the Asia Pacific region. 

    There are a number of good articles available herein which would be useful for you to read.


    vv
    Motivation
    and
    Boosting
    Morale
    Student Kenny K. in MGTC46 at UTSC in mid-March 2011 emailed to say

     www.live-conference.ca

    Hi Professor Richardson,

    I was reading the section on your website concerning the importance of  morale and it really got me thinking about my past experiences. I for  one can definitely agree that high morale in a team environment is 
    vital to success. 

    Kenny adds
    This past year I was the Curriculum Manager for LIVE Conference 2010 and there were times when the morale of our team was very low. 

    During this time team members were constantly bickering with each other, efficiency was at an all time low and nobody was motivated to do anything! This was a very big problem since it was crunch time and the conference was quickly approaching. Eventually once the problem was sorted out, you could just feel a different vibe throughout the whole team. When morale was high, we all worked harder and just simply cared more. Just wanted to share my thoughts regarding  this topic, and how morale is not only important in a workplace, but across all aspects of life as well.

    WTGR replies 
    Great Kenny - and I think this would also be a great thing to mention during the end of a job interview when they ask you "do you have anything else to add", because it demonstrates your strength of character

    .

     

    permission to quote Jeff Hays received by email 2012 Dec 4 and copy put in the permissions binder
     
     
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