Global HRM: International Business

Managing Human Resources Globally

• Growth in international business significantly affects HRM practices
• Key factors influence HRM in global markets
• International operations affect various HR practices: workforce planning, selection, training, performance management, total rewards, and labor relations
• Employers should effectively manage and prepare employees for international assignments, including repatriation

Tim Hortons' Global Expansion

• Tim Hortons operates in 20 global markets
• The first store in India opened in 2022, with plans for over 300 stores by 2032
• Two stores in India opened on the same day in January 2025
• In China, the first store opened in 2019, with 1,000 locations by 2024
• Menus are adapted to local tastes, such as salted egg yolk TimBits in China

HRM and the Global Environment

• Globalization creates new markets with millions of new customers
• Setting up operations globally requires balancing risks and rewards
• Geopolitical risks, like wars, trade wars, and political polarization, must be considered
• Advances in telecommunications and IT enable companies to distribute work globally

Geopolitical Shifts

• Create both barriers and opportunities for businesses
• Trade agreements (free, preferential) impact international activities
• Domestic environmental, labor, and immigration policies play a role
• Tariffs and other trade barriers, such as U.S. tariffs on China's EVs, affect global operations
• Conflicts, like Russia's invasion of Ukraine, create instability
• Technology, intellectual property, and cybersecurity regulations also have an effect

Exiting Global Markets

• McDonald's shuttered all 850 locations in Russia in March 2022 due to the invasion of Ukraine
• This was the first time McDonald's "de-arched" and exited a major market
• This exit cost an estimated $1.4 billion
• The locations were sold to a Siberian franchisee, who agreed to rebrand and retain all 62,000 employees

Global Trade Agreements

• Global activities are encouraged by trade agreements
• The United States-Mexico-Canada Agreement (USMCA) lasts until 2026
• Canada and 10 Asia-Pacific countries have the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
• HR professionals can get international qualifications
• CPHR Canada has agreements with organizations like the Australian HR Institute and the Bangladesh Society for HRM

International Workforce

• Home country: The country where an organization's headquarters are located
• Host country: A country other than the home country where an organization operates a facility
• Third country: A country that is neither the home country nor the host country of an employer
• Canada is the home country of Fairmont Hotels because its headquarters are in Toronto
• A Fairmont employee who is a Canadian citizen is a home country national
• An American chef working in Barbados is a third country national
• A Barbadian manager working at Fairmont in Barbados is a host country national

Levels of Global Participation

• Progression from domestic to global
• Involves establishing foreign subsidiaries as participation increases

Global Marketplace Employers

• Domestic organizations have a workforce that may consist of new immigrants
• International organizations have facilities in one or more other countries
• Multinational companies build facilities in different countries
• Global organizations use cultural differences as an advantage
• They also need a transnational HRM system

Factors Affecting HRM

• Culture: Influences values and effectiveness of HRM practices
• Education & skill levels: Affect labor markets and company location decisions
• Economic system: Capitalist vs. socialist systems and government involvement impact HRM
• Political-legal system: Laws dictate HRM requirements and reflect cultural values and norms

Global Workforce Planning

• Decisions involve level of participation in a global economy
• Decisions about where and how many employees are needed
• Cost and availability of workers must be considered
• Outsourcing is another element
• Flexibility to reduce workforce is necesssary

Responding to Tariffs

• Taiwan Semiconductor Manufacturing Company (TSMC) is investing an additional $100B to build 5 microchip fabrication facilities in Arizona
• The goal is to secure market share free from tariffs
• These facilities are expected to be operational in 2028
• They will supply chips to Apple and Nvidia

International Assignments

• Competency in area of expertise
• Ability to communicate
• Flexibility and tolerance of ambiguity
• Sensitivity to cultural differences
• Motivation to succeed
• Enjoyment of challenges
• Willingness to learn

Developing a Global Workforce

• Special challenges require effective training for all participants
• Employees need training to handle culture gaps and other on-the-ground challenges
• Training programs benefit from specific techniques to navigate cultural issues
• Differences among participants
• International labor relations happen in a legal, social and economic context

Cross-Cultural Preparation

• Involves emotional stages of adjustment, including culture shock

Performance Management

• Specific methods require consideration of legal requirements, local business practices, and national culture
• Which behaviors are rated
• How performance is measured
• Who performs the rating
• Type and how feedback is provided (positive vs. negative)

Compensation

• Pay structure
• Market pay structures may differ across countries, reflecting pay level and relative worth of jobs
• Incentive pay
• Incentives are needed for employees, especially those in higher risk areas
• Benefits & services
• All compensation plans must take into account laws, employee expectations, and values
• Work with unions in more than one country
• Day-to-day decisions about labor relations are usually handled by each global subsidiary

Global Relocation

• Top 2 reasons for assignment failure:
• Changing business conditions
• Inability of family to adjust
• Trailing partner career transition services
• Cross-cultural training
• Career development activities
• International assignment letter

Repatriation

• Process of preparing expats to return home after global assigment
• Provide opportunities to use global experience and communication
• Provide validation by providing recognition