IHRM_3_Session_2024.pdf

„International Human Resource Management“ IHRM: Personnel Selection and Development Institute for Organization and Human Resource Management PD Dr. Thomas Köllen © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 1 Agenda Session 1: Introduction: IHRM & Culture (20.02.2024)...

„International Human Resource Management“ IHRM: Personnel Selection and Development Institute for Organization and Human Resource Management PD Dr. Thomas Köllen © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 1 Agenda Session 1: Introduction: IHRM & Culture (20.02.2024) Session 2: Globalization & Organization (05.03.2024) Session 3: IHRM: Personnel Selection and Development (19.03.2024) Session 4: Intercultural Communication, Collaboration, & Leadership (16.04.2024) Session 5: International Assignments (30.04.2024) Session 6: Diversity Management (14.05.2024) © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 2 IHRM: Personnel Selection and Development Learning Objectives Once you've worked your way through today‘s lecture, you should be able to explain in which ways personnel selection and development in an international context is different from personnel selection and development in a domestic context, the roles different types of employees play in this context, different policies of international staffing, what intercultural competences are, and how they can be trained. © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 3 Personnel Selection Choosing the right people for overseas assignments https://www.youtube.com/watch?v=i9RyE9ZGKE © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 4 Global Competency Inventory (example) © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 5 Personnel Selection Company-internal recruitment Relocation or promotion of employees forms part of company-internal recruitment, whether or not it is accompanied by appropriate adaptational measures. Three resources are available for internal coverage of personnel needs: The parent company The foreign subsidiary that is in need of personnel Other subsidiaries in third countries Instruments of internal personnel recruitment Internal vacancy posting (via all channels) Direct contacting by superiors or colleagues Assistant positions, positions with development potential Junior Boards (multiple management programmes): teams of international junior managers that meet regularly and participate in real projects or company decisions Corporate universities/academies (Blom & Meier, 2004) © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 6 Personnel Selection Company-external recruitment Peculiarities of recruitment in international companies: Qualifications (e.g. vocational qualifications) may be incommensurable Required formal qualifications are often not available in foreign countries Different labour market framework conditions (market situation, legislation, etc.) Other expectations on workforce depending on different national and sociocultural backgrounds Recruitment instruments vary from country to country © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 7 Personnel Selection Staff localisation versus expatriates Staff localisation One of the keys to MNE's success is to recruit native workers who have a wide understanding of their countries (legal-political, economical, socio-cultural framework etc.).The strategic decision of staff localization enhances performance through making use of national advantages and knowledge. (cf. Bartlett & Ghoshal, 1995) Advantages of staff localization for MNEs: Access to local knowledge Access to local business networks Reduction of operation costs Boosting company morale Disadvantages of local staff for the MNEs: Self-interest of local staff Opportunistic behaviour of local staff Operational difficulties Failure of joint ventures due to excessive staff localization © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 8 Personnel Selection Staff localisation process Process Developing local staff Knowledge transfer Replacement of expatriates with local staff at lower management levels Replacement of expatriates with local staff at senior management levels Pros: reduction of operational costs enhancing goodwill effective transfer of corporate advantages control ability to integrate local advantages Cons: organizational slack quality deterioration lack of strong link between Headquarters and the foreign operation lack of knowledge transfer (cf. Ha 2004; Selmer 2003) © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 9 Advantages and Disadvantages of Using PCNs, TCNs, and HCNs Parent country nationals Advantages: Disadvantages: Organisational control and coordination is maintained and facilitated Promising managers are given international experience PCNs may be the best people for the job because of special skills and experience There is assurance that the subsidiary will comply with MNE objectives, policies etc. The promotional opportunities for HCNs are limited Adaptation to host-country may take a long time PCNs may impose an inappropriate HQ style Compensation for PCNs and HCNs may differ (Dowling, Festing, & Engle, 2013; cf. Selmer 2003) © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 10 Advantages and Disadvantages of Using PCNs, TCNs, and HCNs Third-country nationals Advantages: Salary and benefit requirements may be lower than for PCNs Disadvantages: Transfers must consider possible national animosities (e.g., India and Pakistan) The host government may resent hiring of TCNs TCNs may not want to return to their home country after the assignment TCNs may be better informed than PCNs about the host-country environment (Dowling, Festing, & Engle, 2013) © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 11 Advantages and Disadvantages of Using PCNs, TCNs, and HCNs Host-country nationals Disadvantages: Advantages: Language and other barriers are eliminated Control and coordination of HQ may be impeded Hiring costs are reduced and no work permit HCNs have limited career opportunity is required outside the subsidiary Continuity of management improves, since Hiring HCNs limits opportunities for PCNs to HCNs stay longer in their positions gain foreign experience Government policy may dictate hiring of Hiring HCNs could encourage a federation of HCNs national rather than global units Morale among HCNs may improve as they see future career potential (Dowling, Festing, & Engle, 2013) © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 12 Approaches to Staffing Ethnocentric Few foreign subsidiaries have any autonomy and strategic decisions are made at headquarters Key positions in domestic and foreign operations are held by managers from headquarters Subsidiaries are managed by staff from the home country (PCNs). Advantages: Perceived lack of qualified HCNs Disadvantages: It limits the promotion opportunities of HCNs The adaptation of expatriate managers to host countries often takes a long time HCNS may perceive the often considerable income gap compared to PCNs as unjustified Need to maintain good communication, coordination and control links with headquarter Risk reduction (Dowling, Festing, & Engle, 2013) © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 13 Approaches to Staffing Polycentric Each subsidiary is treated as a distinct national entity with some decision-making autonomy Subsidiaries are usually managed by local nationals (HCNs), who are seldom promoted to positions at headquarters, and PCNs are rarely transferred to foreign subsidiary operations. Advantages: Disadvantages: Employing HCNs eliminates language Bridging the gap between HCN subsidiary barriers; avoids the adjustment problems of managers and PCN managers at corporate expatriate managers and their families, and headquarters is difficult. removes the need for expensive cultural Host-country managers have limited awareness training programs. opportunities to gain experience outside their Employment of HCNs is often less expensive own country and cannot progress beyond the Gives continuity to the management of senior positions in their own subsidiary. foreign subsidiaries and avoids the turnover Parent-country managers also have limited of key managers opportunities to gain overseas experience. The senior corporate management group will have limited exposure to international operations. (Dowling, Festing, & Engle, 2013) © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 14 Approaches to Staffing Geocentric The MNE is taking a global approach to its operations, recognizing that each part (subsidiaries and headquarters) makes a unique contribution with its unique competence. It is accompanied by a worldwide integrated business. Advantages: Disadvantages: It enables an MNE to develop an Host governments want a high number of international executive team which assists in their citizens employed and may utilize developing a global perspective and an immigration controls to reach this goal. internal pool of labor for deployment Most countries require MNEs to provide throughout the global organisation. extensive documentation if they wish to hire It overcomes the ‘federation’ drawback of the a foreign national instead of a local national. polycentric approach. It can be expensive. It supports cooperation and resource sharing Large numbers of PCNs, TCNs, and HCNs across units. need to be sent abroad in order to build and maintain the international cadre required to support a geocentric staffing policy. (Dowling, Festing, & Engle, 2013) © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 15 Approaches to Staffing Regiocentric Reflects the geographic strategy and structure of the MNE. Like the geocentric approach, it utilizes a wider pool of managers but in a limited way. Staff may move outside their home countries but only within the particular geographic region. Regional managers may not be promoted to headquarters positions but enjoy a degree or regional autonomy in decision-making. Advantages: Disadvantages: It facilitates interaction between managers It can produce federalism at a regional rather transferred to regional headquarters from than a country basis and constrain the MNE subsidiaries in that region and PCNs posted from developing a more global perspective. to the regional headquarters. While this approach does improve career It reflects some sensitivity to local conditions, prospects at the national level, it only moves since local subsidiaries are usually staffed the barrier to the regional level. Talented almost totally by HCNs. managers may advance to jobs in regional headquarters but less frequently to positions at the MNE headquarters. (Dowling, Festing, & Engle, 2013) © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 16 Selection Criteria Determinants of staffing choices Context specificities Company specificities Cultural context Institutional context Staff availability Type of industry MNE structure and strategy International experience Corporate Governance Organisational culture Staffing choices Ethnocentric Polycentric Regiocentric Geocentric Local unit specificities Establishment method Strategic role and importance Need for control Locus of decision © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management IHRM practices Selection Training and development Compensation Career management (Dowling, Festing, & Engle, 2013) 17 Selection Criteria Selection criteria influencing the selection decision Technical Ability Cross-cultural suitability Family Requirements Individual Selection Decision Situation Country/Cultural requirements MNE requirements Language (Dowling, Festing, & Engle, 2013) © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 18 Selection Criteria Criteria dimensions proposed by Mendhall & Oddou Mendenhall & Oddou (1991) propose a four-dimensional model of selection criteria: The self-oriented dimension: The degree to which the expatriate expresses an adaptive concern for selfpreservation, self-enjoyment and mental hygiene. The cultural-toughness dimension: A mediating variable that recognizes that acculturation is affected by the degree to which the culture of the host country is incongruent with that of the home country. The others-oriented dimension: The degree to which the expatriate is concerned about host-national coworkers and desires to affiliate with them. The perceptual dimension: The expertise the expatriate possesses in accurately understanding why host nationals behave the way they do. (Dowling, Festing, & Engle, 2008) © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 19 Selection Criteria Harris & Brewster‘s selection typology OPEN CLOSED Formal Informal Clearly defined criteria Less defined criteria Clearly defined measures Less defined measures Training for selectors Limited training for selectors Open advertising of vacancy (internal/external) No panel discussions Panel discussions Open advertising of vacancy Recommendations Clearly defined criteria Clearly defined measures Training for selectors Panel discussions Selectors’ individual preferences determine selection criteria and measures Nomination only (networking/reputation) No panel discussions Nominations only (networking/reputation) (Dowling, Festing, & Engle, 2008) © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 20 Personnel Development Aims of intercultural personnel development The aim of personnel development in intercultural contexts is to impart intercultural competence, i.e. to expand and improve the knowledge, skills and behaviours that are necessary to achieve corporate objectives, taking into account individual aims and framework conditions. Supplying the company with qualified employees and managers Improvement of the international competence of all staff Improvement of collaboration in international teams Enhancing motivation Preparation for foreign assignments Increasing readiness for mobility Updating of qualifications during stay abroad Adjustment of company interests and individual goals Optimisation of interface management (e.g. between parent company and subsidiary) … © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 21 Intercultural Competences The concept of competence In the social sciences, the concept of competence stands for an individual's capacity to interact effectively and efficiently with its environment within a certain domain of knowledge or activity. Competence Professional competence Methodological competence Social competence Intercultural competence © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 22 Intercultural Competences Model of intercultural competences Classification in terms of content Didactical classification Cognitive: learning and reasoning Transcultural elements of Country-specific Task-related elements of intercultural competence competences intercultural competence Awareness of culture's influence on behaviour Historical/geographical knowledge Foreign technical vocabulary Technical knowledge Awareness of adaptation phase during foreign assignment (phenomenon of culture shock) Language skills Familiarity with customs, habits and behaviours Market knowledge Familiarity with differences in working procedures Knowledge of living conditions Knowledge of foreign company's rules and processes Fundamental concepts Cultural orientation Affective: attitudes, values, feelings Familiarity with work-related values and attitudes Sensitivity to cultural differences Empathy Legal knowledge Professional ethos Empathy Intercultural sensitivity Employee perspective Respect Respect towards culture Interest in cultures Interest in country and people Tolerance, freedom from prejudice Willingness to engage in talk exchanges Willingness to communicate Motivation for stay abroad Respect for culture-specific working methods (planning and decision-making processes, working style, working speed, amount of work) Tolerance of ambiguity Readiness to adapt Patience, stamina Political sensitivity Emotional stability Adequate expectations regarding life in the country Open-mindedness Motivation for stay abroad © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management Self-confidence Attitude towards company and job/position Knowledge of economic relations 23 Adequate expectations with regard to working in the country Intercultural Competences Model of intercultural competences Classification in terms of content Transcultural elements of Country-specific Task-related elements of intercultural competence competences intercultural competence Didactical classification Behavioural: displayed behaviour Mobility, flexibility Correct role behaviour at work Capability to improvise and organise Language skills including gestures and nonverbal communicative behaviour Communication style Creative problem solving Correct role behaviour in society Working/management behaviour (decision-making and planning, working style) Communication skills Capacity of handling conflict Stress-coping skills Initiative Politeness, diplomacy, tact Adequate leadership style (motivation, criticism) Establishment of networks Establishment of social relations Political skill oriented to cultural values Incentive setting, communication style Negotiation skills Frequency of/interest in social contacts (based on Martin 2001: 86) © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 24 Intercultural Training Purposes of intercultural training integration smooth communication cooperation harmonisation © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 25 Cross-cultural training: A critical step in ensuring the success of international assignments (Bennett, Aston, & Colquhoun, 2000) Why train? To compete globally and succeed… 1. Assignees must have the skills, knowledge, attitudes, and attributes to perform effectively in a different cultural environment. 2. Assignees and accompanying family members must be able to personally adjust to living in new locations. 3. Assignees must understand how to maximize developmental opportunities while abroad. Building relationships is key to perform globally. Therefore, assignes are required to… Develop trust relationships with people of different backgrounds and values Communicate well Collaborate in their approach Act as team players Negotiate skillfully Exhibit cultural competence © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 26 Cross-cultural training: A critical step in ensuring the success of international assignments (Bennett, Aston, & Colquhoun, 2000) Cross-cultural programme objectives should be crafted to reach the following goals: Managing Change—the Personal and Professional Transition Managing the Cultural Differences Managing Professional Responsibilities Grasp the impact of the change on the employee, family and friends Apply information and insights acquired in the program to accomplish the job objectives Understand the cultural adaptation process and identify effective coping strategies Create a personal and professional action plan for managing change, achieving goals, maintaining key relationships during the assignment and post assignment Understand how business and specific job responsibilities are handled in the country/countries, region/regions in which the employee will work Determine how to adapt individual style and approach to be effective with local nationals Recognize that repatriation planning is an integral part of managing their assignment Understand the meaning of culture and how it shapes people’s beliefs, values, assumptions, expectations, and behaviors Understand and apply frameworks for analyzing cross-cultural interactions and develop skills to reconcile differences Develop intercultural communication skills Acquire important information about the host country and recognize cultural differences between home and host cultures Gain practical information about daily life in the host country © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 27 Cross-cultural training: A critical step in ensuring the success of international assignments (Bennett, Aston, & Colquhoun, 2000) Quality assurance for cross-cultural training should (at a minimum) include: Programme evaluations: Completed by all of the participants at the conclusion of the program and again between six to eight months after arrival to determine the long-term impact of training Given to the corporate liaison, the trainer, and members of the training team Used to guide future programme development; and to give feedback to the training team and to the corporate liaison Debriefing of members of the training team to evaluate the program to evaluate the program and their performance Written documentation by the trainer: to evaluate the program and the training team; to note special concerns about the assignees; and to log recommendations for their continued support and development Regularly scheduled meetings between the corporate liaison and the trainer or training firm’s representative to assess program and participant feedback; to identify relevant corporate changes and new assignment expectations; and to determine any needed adjustments to future programme design Ongoing trainer and staff performance management © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 28 Cross-cultural training: A critical step in ensuring the success of international assignments (Bennett, Aston, & Colquhoun, 2000) Criteria for Selecting a Supplier/Consultant: «Not all Training Firms and Trainers are the Same» 1. Track record and leadership 2. Staff scope, size qualifications, and quality control 3. Delivery capability 4. Area experts 5. Design capability © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 29 Intercultural Competences Varieties of intercultural training General preparatory measures Facilitating adaptation to any foreign culture Not culture-specific, not designed to any specific host country Developing a heightened awareness of own culture, thus enabling understanding of potential difficulties in interaction with other cultures Culture-specific measures Imparting information and experiences concerning the culture of a specific host country (cf. Herbrand 2002: 56 ff.) © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 30 Intercultural Training Gudykunst/Hammer's classification grid for varieties of intercultural training Intercultural communication training Culture-independent Intellectual-didactic Language training Information on crucial environmental factors Culture assimilator III I IV II Experience-focused Culture-specific Intercultural communication Workshops Cultureindependent simulations Sensitivity training Case studies Field experience Look and See trips Job rotation (Gudykunst & Hammer, 1983: 126) © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 31 Intercultural Training Classification of training varieties Training Methods Objectives Informal training Reading Video, films Intercultural experience workshops Sensitivity training Communication workshops Training groups Trips abroad Enhancement of self-confidence, communication skills, empathy, listening skills Field experience Meeting former expatriates "Mini" cultures "Host family surrogates" Familiarization with customs, values, (religious) beliefs, behavioural patterns Language skills Courses Self-study Culture assimilator Simulation Role play Case studies © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management Familiarization with region or country Culture-specific and non-specific negotiation skills. Ulterior aim: reduction of ethnocentrism Enhancement of communication in business and everyday life 32 Intercultural Training Cultural awareness programs The «Cultural Assimilator» - Read through the mini case studies and choose a response - Think about a reasoning for your response - Discuss your choice and reasoning with your neighbor/small group © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 33 Intercultural Training Cultural awareness programs Tung (1981) proposed a contingency framework for deciding the nature and level of rigor of training. Determining factors: degree of interaction required in the host culture & similarity between the individual's native culture and the new culture. Training elements: content of the training & rigor of the training. Expected relationships: If the expected interaction between the individual and members of the host culture was low, and the degree of dissimilarity between the individual's native culture and the host culture was low, then training should focus on task- and job-related issues rather than culture-related issues. The Ievel of rigor necessary for effective training should be relatively low. If there was a high Ievel of expected interaction with host nationals and a large dissimilarity between the cultures, then training should focus on cross-cultural skill development as well as on the new task. The Ievel of rigor for such training should be moderate to high. © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 34 Intercultural Training Cultural awareness programs Recommendations from Tung’s (1998) revisited model: Training should be more orientated to life-long learning than 'one-shot‘ programs with an area-specific focus. There should be more emphasis on provision of foreign language training. There should be emphasis on the Ievels of communication competence, not just verbal communication, so the person becomes bicultural and bilingual, which enables an easier transition between one culture and another. Cross-cultural training assists in managing diversity. The preview of the expatriate position should be realistic, as this facilitates effective performance. (adapted from Dowling, Festing, & Engle, 2008) © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 35 References Bartlett, C. A. & Ghoshal, S. (1995). Changing the Role of Top Management: Beyond Structure to Processes. Harvard Business Review, vol. 73 1995, issue 1, pp. 86-96. Bennett, R., Aston, A., & Colquhoun, T. (2000). Cross-cultural Training: a Critical Step in Ensuring the Success of International Assignment. Human Resource Management, 39 (2/3), 239-250. Blom, H. & Meier, H. (2004). Interkulturelles Management: Interkulturelle Kommunikation, internationales Personalmanagement, DiversityAnsätze im Unternehmen, 2nd ed., Herne/Berlin 2004. Dowling, P.J., Festing, M., & Engle, A. D. Sr. (2013). International Human Resource Management, 6th ed., Cengage Learning: Singapore. Gudykunst, R. & Hammer, M. R. (1983). The Basic Training Design: Approaches to Intercultural Training. In: Handbook of Intercultural Training, Eds. Daniel Landis and Bhagat Rabi S., New York et al. 1983, pp. 118-154. Ha, N. (2004). Going local, [Online] URL: http://www.english.vietnamnet.vn/service/printversion.vnn?article_id=538004, retrieved: October 2004. Martin, C. (2001). Interkulturelle Kompetenzen und deren Vermittelbarkeit durch Repatriates, Munich 2001. Scherm, E. & Süß, S. (2001). Internationales Management: eine funktionale Perspektive, Munich 2001. Selmer, J. & Lauring, J. (2011). Acquired Demographics and Reasons to Relocate Among Self-Initiated Expatriates. The International Journal of Human Resource Management, 22(10), 2055-2070. Selmer, J. (2003). Staff Localization and Organizational Characteristics: Western Business Operations in China. Asia Pacific Business Review, vol. 10 2003, issue 1, pp. 43-57. © IOP 2024 I PD Dr. Thomas Köllen I International Human Resource Management 36