Category Int Hr Management

Working Abroad

August 3, 2007 0 comments

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This aspect of organizational life has concerned researchers and managers alike for many years, because it is generally recognized that sending a manager to work for the company abroad is a challenging experience, where failure could be costly for both parties. In the case of the employee, failure might be a significant demotivator and may cause him or her to leave the company, with an attendant loss of resources for the firm and might even cause the employee to rethink their future career path, even though the fault was not entirely of his or her own making. From the firm’s point of view, failure is not only expense but it might also damage its market position and affect customer relationships. Consequently, many firms now provide mechanisms for the preparation and support of the manager posted abroad, to help the manager perform to the bet of his or her ability as soon as possible after arrival.

Full details of the research do not concern us here but some important points can be made, illustrating typical problems that might be encountered and suggested steps taken to alleviate some of the pressures of working abroad.

Modern business careers increasingly involve some time working abroad, as firms increase their international activities. For many, progress in their career is dependent on international experience and there are an increasing number of people who specialize in international management, undertaking assignments for various firms during their careers.

Many students, for that matter, are undertaking study abroad, either for a semester or for a whole year. Both these activities necessarily involve people experiencing cultural differences, even in similar cultures such as the U.S.A. and Canada, Sweden and Denmark, etc. Living in a foreign country on a day-to-day basis for a significant length of time means dealing with another culture beyond the artefact level and, for many, this has a major effect on their lives. We explore what we call expatriate experience, particularly in a business context.

We are concerned here primarily with medium- and long-term deployment abroad, short business trips and short-term business projects being excepted, as they do not have the same impact on people's lives. We look at some of the fundamental reasons for working abroad, the cultural impact on the people concerned, suitable preparation for foreign deployment and factors connected with repatriation.

Posted by lisa
Categories: International Management Culture Working Abroad Int HR Management

Women Expatriates

August 5, 2007 0 comments

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INTERNATIONAL ASSIGNMENTS FOR WOMEN TWO IMPORTANT "MYTHS"

  • Myth 1: women do not wish to take international assignments
  • Myth 2: women will fail in international assignments because of the foreign culture's prejudices against local women

SUCCESSFUL WOMEN EXPATRIATES

  • Foreign not female
  • Emphasize nationality not gender
  • The woman's advantage
  • Strong in relational skills
  • A wider range of interaction options

Many firms refuse to send women to undertake expatriate roles because it is believed that they will face considerable difficulties abroad, especially in male-dominated societies. This myth has been attacked by researchers who found that, in fact, females tend to be more flexible and able to build communications networks effectively, overcoming some of the problems of cultural adjustment more easily than many males.

Also it seems that even in very male-dominated societies, women can still function effectively because, being foreign, they can be treated differently from indigenous females. So it seems that the perception of women as unsuitable for overseas deployment is a mis-match between capabilities and opportunities. Sufficient to say that it is the technical and other capabilities that makes for a successful deployment, not the sex of the manager.

Some recent research has shown that international companies tend to favour males for overseas assignments, pointing to the difficulties faced by females, especially in certain societies. Japan, Korea and Saudi Arabia, especially, are particularly difficult for women. Yet female managers have held successful assignments in difficult conditions and perhaps the problems of female overseas assignments have become stereotypes, rather than reflecting reality.

Gesteland (2000) tells the story of a Danish woman who was employed by a Singaporean company who, learning that Japan, Korea and Saudi Arabia were particularly difficult for women, asked to be placed on assignment in all three countries. Not only was her assignment successful but she exceeded previous sales figures and was even offered a job by one of the companies she visited.

It also seems that, in countries such as Japan, local women rarely obtain senior positions but foreign women, being different, may have high levels of responsibility. Therefore, Japanese males approaching a foreign female manager may well treat her very differently to a Japanese woman. That said, Japanese males still find it difficult to deal with females and a colleague tells the story that, when a Japanese company visited her department to negotiate prices for various components, they assumed that this lady was attending the discussions to take notes! In fact, she is a senior procurement manager and an important member of the negotiating group! Even when she was introduced, the Japanese team found it difficult to address her directly.

Posted by lisa
Categories: International Management Working Abroad Int HR Management

Expatriate Success

August 5, 2007 0 comments

PAYING FOR THE EXPATRIATE MANAGER

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Base Salary: + $150,000+

London + $300,000+

Tokyo + $250,000+

Hong Kong + $240,000+

Shanghai + $210,000+

Paris + $190,000

MOTIVATIONS TO USE EXPATS

  • Managers acquire international skills
  • Coordinate and control operations dispersed activities
  • Communication of local needs/strategic information to headquarters

KEY EXPATRIATE SUCCESS FACTORS

  • Professional/technical competence
  • Relational abilities
  • Motivation
  • Family situation
  • Language skills
  • Willingness to accept position

What makes for expatriate success? It is not technical competence alone which is involved - personal and family situations are important contributory factors. Some commentators suggest that language skills are an important element but this is disputed, considering different expatriate communities and the help of local staff in dealing with language difficulties. Certainly, motivation and a desire to succeed are important but so is proper selection and preparation, not only for the staff member perhaps but also for other family members.

Success does depend on external factors in addition to personal attributes. The length of the assignment, the cultural distance to be crossed and the amount of interaction required are all factors germane to success. A long assignment for some may have serious family repercussions, for instance. Moving between two English-speaking cultures is easier than, say, between England and Russia. Working in mainland China is a challenge for everyone, including citizens of Hong Kong and Taiwan, but Europeans would find the difficulties more extreme. Working on computer systems is less demanding in cultural terms than selling or marketing where a good deal of interaction with local people may be required.

The effect of the complexity and the responsibility of the role abroad are relevant. The job may be the same but the responsibilities and interactions different, in which case the manager will face additional complexities, compared to the job at the home base. If the job is essentially the same, complexity is reduced and so is the possibility of failure.

Take a moment and reflect on these causes of success and failure, relating them to your own experience of foreign cultures. Which, if any of these factors would be particularly relevant to yourself?

Posted by lisa
Categories: International Management Working Abroad Int HR Management

Cross-cultural Adjustment Stages

August 5, 2007 0 comments

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  • Honeymoon
  • Culture Shock
  • Adjustment
  • Mastery

Mendenhall and his co-workers have evolved a model for the process of cross-cultural adjustment in foreign deployment, based on their research into American managers. They portray the process as successive stages of honeymoon, culture shock, adjustment and mastery.

The honeymoon period lasts for a few weeks and, like being on holiday, everything is novel. After that period, realization sets in that one is going to have to deal in detailed ways with another culture, that friends have been left behind and new associations must be built up and so on. For many, this is the 'make or break' period. After a few months, the adjustment period begins and it is only after about 18 months that one has begun to master local differences.

The above time-scale has enormous implications for those on two-year assignments. Essentially, the greater part of this time is spent in getting used to local conditions. This timescale may be diminishing as people become more internationally aware but it is still a significant factor for the use of HCNs.

Mastery may be something of a misnomer, since no one really masters another culture, especially on deployment. But it can be seen as a relative term, the expatriate having become familiar with the local culture and able to deal with such things as local laws and procedures, as well as the development of strong workplace associations.

Mendenhall and Oddou (1991) International Adjustment

Degree of adjustment depends on:

  • Self-orientation
  • Organizational Culture
  • Non-work issues
  • Job issues
  • other issues - how difficult an assignment (Hofstede distance?)

This sums up the attributes of a successful international manager and the role of technical expertise.

Note that organizational culture is important, as the management context of the subsidiary may be quite different to that of headquarters and the role that the expatriate is expected to play is different to the job at home base.

Posted by lisa
Categories: International Management Working Abroad Int HR Management

HR Management Factors and Expatriate Policies

August 5, 2007 0 comments

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Staffing Policies

Ethnocentric: parent country nationals + when: lack of qualified host nationals

why:

  • maintain corporate culture
  • need to transfer core competencies
  • examples: Proctor and Gamble

Polycentric approach: host managers manage host subsidiaries

  • less expensive
  • fewer cultural clashes
  • example: Unilever, but hard moving to transnational form

Geocentric: merit system regardless of nationality: problems--national laws; cost

Quite often, the firm's strategic and cultural orientation will determine whether HCN, PCN or TCN is used. Ethnocentric firms tend to use HCNs, whereas Polycentric firms (who use local talent) are happy to deal with the cultural differences involved. Geocentric firms may use a mixture of HCNs, PCNs, etc., depending on individual merit.

The Role of HR Management

Selection issues + who + career progression

Preparation +familiarization and orientation + training + inclusion of family members

Adaptation + help with local regulations + mentoring

Repatriation + information on return position + making use of expats. experience

EXPATRIATE POLICY COMPARISON

POLICY ISSUE TEXAS INSTRUMENTS-1 MOTOROLA (2) COLGATE-PALMOLIVE
DEFINITION OF Spouse, unmarried Spouse and not available
DEPENDENTS children under 21 or working full time on an undergraduate degree. unmarried children through age 22 leaving with employer at home  
SELECTION Manager’s request Typically to fill a critical need A few are for development goals Unavailable Purpose: develop upper level managers who have international expertise
COMPENSATION Compensation based Home country Headquarters
BASE LOCATION on home country approach - base pay calculated at their home country rate (plus associated assignment allowances). approach approach - all U.S. expats paid based on N.Y Headquarters salaries with allowances calculated based on N.Y. as the home location
HOUSING Expat is paid a housing/utilities differential work country rate less home country amount of current rent or mortgage/utilities time of assignment Hypothetical housing deduction based on salary level and family status All housing + utilities paid in work country Housing differential paid using NY housing norm
RELOCATION One month base pay Flat amounts Lump sum equal
ALLOWANCE when departing and repatriating paid for departure and return $2600-single $3500-married to 10% of base salary - up to $10,000
TEMPORARY 2 weeks in home Eligibility Eligibility
LIVING location prior to departure 2 weeks in work location upon arrival; expenses paid begins 1 year after start of assignment. May request lump sum payment. after 7 months on assignment and in 12 months intervals thereafter.
HOME LEAVE Accrues at 12 month intervals, beginning with the first anniversary from assignment start date. Can establish destinations and use for multiple trips. Expat budget to go to alternate destinations and use for multiple trips. Expat can take home leave 12 months prior to actual accrual and for 12 months following the accrual Eligibility begins 1 year after start of assignment. May request lump sum payments Eligibility after 7 months on assignment and in 12 months intervals thereafter.
DUAL CAREER/ Compensate for the Unavailable Career search
SPOUSAL INCOME lost goods/services that the spouses income contributes to the families goods and services spending. Offset home country housing and utilities costs by spouses percentage of contribution to the total family income.   reimbursement of $7,500 or tuition reimbursement overseas
  1. Texas Instruments Policy #02-06-04 “International Cross-Regional Assignments” (1996)
  2. Motorola International Personal Policy Manual (1992)
  3. Colgate-Palmolive Case.

SURVEY/RESEARCH ON EXPATRIATE PROGRAMS

1997 Worldwide Survey of International Assignment Policies and Practices by:

Organization Resources Counselors, Inc.

(ORC) Global Relocation Trends 1995 Survey Report

Sponsored by:

Windham International and the National Foreign Trade Council (NFTC)

1996 Survey of Expatriate Tax and Compensation Policies by: Price Waterhouse LLP

“Best Practices” 1996-1997 International Assignee Research Study by: Berlitz International Inc., and PHH Relocation in cooperation with SHRM’s Institute for International Human Resources

Books:

The Management of Expatriates

Chris Brewster

Global Assignments: Successfully Expatriating and Repatriating International Managers

  1. Stewart Black, Hal B. Gregersen, and Mark E. Mendenhall

Developing the Global Organization: Strategies for Human Resource Professionals Moran, Harris, and Stripp

Posted by lisa
Categories: International Management Working Abroad Int HR Management Legal Agreements

Repatriation

August 5, 2007 0 comments

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THE REPATRIATION PROBLEM

  • Difficult for many organizations
  • "Reverse culture shock"
  • Expatriates must relearn own national and organizational culture
  • Includes whole family

STRATEGIES FOR SUCCESSFUL REPATRIATION PROVIDE:

  • A strategic purpose for repatriation
  • A team to aid the expatriate
  • Home country information sources
  • Training and preparation for the return
  • Support for expatriate and family

The repatriation process is of great importance. If the former expatriate is to be integrated back into the company and for the company to benefit from that person’s experience abroad.

Putting yourself in this position of returning to your home culture after a two-year absence, note down the things that might have changed most, such as personal relationships.

Posted by lisa
Categories: International Management Culture Working Abroad Int HR Management

Why Expatriate Managers

August 5, 2007 0 comments

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Overview

Firms send staff to work abroad for several reasons. For many years it was the practice to send out headquarters staff in order to ensure that subsidiaries were managed in the way that HQ wished, a very ethnocentric position to take. It may be that management expertise or technical skills are not available locally or the organization may wish to develop international expertise in their staff.

Posted by lisa
Categories: International Management Working Abroad Int HR Management

Training Prior to Deployment

August 5, 2007 0 comments

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Researchers tend to classify the training process into three categories: low, medium and high rigor.

The choice depends on the capability of the company, the role being undertaken and the relative cultural distance.

For which expatriate situations and why would you choose (a) Low rigor training (b) High rigor training?

TRAINING RIGOR

The extent of effort by trainees and trainers required to prepare the trainees for expatriate positions

HIGH RIGOR TRAINING

  • Lasts over a month
  • Experiential learning
  • Extensive language training
  • Often includes interactions with host country nationals

Techniques: Field trips to host country, meetings with managers experienced in host country, meetings with host country nationals, intensive language training.

Objectives: Develop comfort with host country national culture, business culture, and social institutions.

Posted by lisa
Categories: International Management Working Abroad Int HR Management

Practical Application - Working Abroad

August 5, 2007 0 comments

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As you learned the nature and content of culture and cultural differences, you can assess the impact of culture on important business processes; areas of business where cultural differences are a major consideration, in negotiations, leadership, working in collaboration with other firms and working abroad.

So you are now in a position to work knowledgeably and critically with cultural issues and their application.

Culture-based thinking and its application in organizations is a very complex area and no one has all the answers to cross-cultural problems.

It is more important to appreciate the basis and impact of cultural differences than to concentrate on artefacts.

Posted by lisa
Categories: Working Abroad Int HR Management

International Business Management

August 7, 2007 0 comments

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"1. An introduction to International Management <http://lisaconsulting.com/presentation/intmanaement/>"_ and its importance. The role of international managers.

"2. The International Business Environment <http://lisaconsulting.com/presentation/intbuzenvi/>"_ Developments in international trade. The importance of the Triad. Developments in the international business environment including the importance of economic groups such as the EU, NAFTA, ASEAN and others. Political, legal and technological issues in international business. The complexity of the international business environment, relations with host governments. The competitive advantage of nations. International competitiveness and its impact on international management.

"3. Culture and International Management <http://lisaconsulting.com/culture4/>"_ Cultural issues and the international firm, cultural diversity, convergence and divergence. Models for analyzing cultural differences. Cultural issues in the workplace and the diversity of management styles, a critical analysis of the work of Hofstede and others.

"4. International Business Ethics and Corporate Social Responsibility <http://lisaconsulting.com/presentation/ethics/>"_ Ethical behavior in MNEs, tensions in international management. MNEs and corporate social responsibility. Current debates.

Unit 5. International strategy

International corporate and business level strategy. International entry strategies.

"6. International Collaborative Strategies <http://lisaconsulting.com/presentation/jointventures/>"_

International collaborative strategies, strategic alliances and joint ventures. Managing International Joint Ventures

"7. Managing Human Resources in the International Firm <http://lisaconsulting.com/presentation/ihrm/>"_

and "A Leadership and Management Behavior in Multinational Companies <http://lisaconsulting.com/presentation/leadership/>"_

"8. Managing in Multinationals <http://lisaconsulting.com//presentation/managingmne/>"_

Managing multinational and transnational firms. International organizational structures and their evolution. Managing innovation in MNCs/TNCs. Planning, organizing and controlling international businesses, the importance of synergy in international operations.

  1. International Staff Deployment

"Expatriate Compensation <http://lisaconsulting.com/presentation/expatriatecompensation/>"_

"Expatriate Deployment <http://lisaconsulting.com/presentation/workingabroad/>"_

Problems of expatriate deployment. Culture shock and expatriate failure. Training for expatriate deployment. A critical analysis of the work of Mendenhall and others. Developing international managers.

  1. The Future of International Management

Contemporary debates in international business development, developments in selected areas, the EU, NAFTA, etc. The internationalization of small businesses.

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Categories: International Management Culture Web Presentations Working Abroad Int HR Management

Human resource management in International Joint Ventures

August 9, 2007 0 comments

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Beyond the negotiation and setting up stages, another aspect of an organization for which sensitivity to national culture is of utmost importance is the management of human resources. At this stage, national cultures become increasingly relevant to international joint ventures, because of their joint management involvement. International joint ventures bring together two or more sets of employees whose national culture gives them fundamentally different views on what constitutes a desirable management style or appropriate organizational hierarchy (Norburn and Schoenberg, 1994).

As Schuler et al (1993) point out, "[National culture is important because of its] impact upon acceptable, legitimate and feasible practices and behaviors... Acceptable in terms of "can we pay workers different rates, and thereby differentiate them, according to performance"; legitimate in terms of "are there any legal statutes prohibiting us from not paying workers overtime for work on Saturday and Sunday"; feasible in terms of "while the society is hierarchical, authoritarian and paternalistic, can we empower the workforce to make workplace decisions in order to facilitate our quality strategy? "

Various comparative studies have demonstrated that certain cultural attitudes and values have significant implications for organizations and the ways in which they are managed (see for instance, McClelland, 1961, Crozier, 1964; Hofstede, 1980, Hofstede and Bond, 1984, Tayeb, 1988, Hall and Hall, 1990; Meek and Song, 1993). These values and attitudes include individualism, collectivism, attitudes to power and authority, achievement motivation, attitudes to conflict and harmony, tolerance of ambiguity and uncertainty, interpersonal trust, and many more.

The Table below, illustrates some examples of the ways in which organizations could be influenced by work-related cultural traits.

Culture-specific aspects of organization

Organization Examples of the Examples of relevant
Dimensions relevant underlying process cultural traits
Centralization Power Relationship Attitudes to power and authority; Trust and confidence in others; Respect for other people's views
Specialization Clear-cut job Ability to cope with
and specifications, uncertainty; Attitude
Formalization job territory to privacy and autonomy
Formalization Control and Attitude to control
and discipline and discipline
Standardization    
Direction of Information Attitude to
Communication sharing information
sharing;   Respect for other people's views
Span of control Power relationship Attitude to power and authority

From: Tayeb, 1996

In an IJV if employees coming from partners’ country of origins have differing levels and degrees of the work-related attitudes and values listed in column 3, there is bound to be tension caused by their implications for columns 2 and 1. Schoenberg et al.'s (1995) research findings demonstrate the kind of complexities involved.

Anglo-French joint ventures

Schoenberg and his colleagues studied four major Anglo-French joint ventures from the chemicals and engineering sectors which formed between 1986 and 1989. The researchers sought to establish the major organizational difficulties and opportunities the partners experienced during the formation and management of the partnership, and the management practices that could overcome and make most of these differences.

They compared the two nations on two of Hofstede's (1980) dimensions, power distance and uncertainty avoidance. They argued that the former would determine the views of each nationality on such issues as the preferred degree of centralization and the appropriate levels for decision making whilst the latter would guide the preferences for the number of levels within the organization and the rigidity of the organizational systems.

In Hofstede's study the French scored higher on both power distance and uncertainty avoidance than did the British. These differences of scores, Schoenberg et al. argued, was reflected in the management styles of the managers in the joint ventures studied.

The natural French management style was widely perceived as being more autocratic, with decision-making authority clearly concentrated at top management levels. In contrast, British executives were accustomed to leave more discretion to middle management levels, with strategic information more widely shared. The two national management styles failed to allocate decision-making discretion at the same organizational level.

British managers would assume that the purpose of a meeting was to arrive at a consensus view and then act upon that view. To French managers the purpose of a meeting was simply to clarify the arguments they would later put forward to their bosses for consideration.

Remuneration system and status of employees were another point of difference. For the French, hierarchical position and payment were dependent upon the educational qualifications of the incumbent.

For the British they were both based on the content of the job itself. These two different approaches to remuneration had caused some serious problems.

Following the French approach would mean that for similar jobs in the French parent company significant differences existed between the salary of an ingenieur and a technicien. In comparison, remuneration in the British partner tended to be based more exclusively upon the job actually done.

In the two of the alliances where technical problems had to be solved by bi-national teams, the underlying scientific approaches could be seen to diverge. The French favored the use of precise theoretical calculations to make sure in advance that a system would work, and would enjoy engineering sophisticated and very general solutions. The British were satisfied with a simpler system that proved empirically to work.

Japanese joint-ventures in China

This kind of cultural clash is a manifestation of the extent to which we all take our home-grown assumptions for granted and expect others to know them and to behave accordingly. Japanese joint-ventures in China are an interesting case in point.

Yager et al. (1994), in their study of foreign joint ventures in China, found that Japanese managers were almost baffled by Chinese workers' display of a lack of pride in and identity with their employer organizations. An examination of some of Chinese cultural characteristics shows that the underlying values of Chinese workers' attitudes to their workplace are quite different from those of their Japanese counterparts.

Culturally, China represents a "high-context" (Hall, 1959) culture, in which meanings often derive from relationships, authority and context. In China conceptions of self, morality, time, causality and probability may differ significantly from conceptions in many other countries (Redding, 1990). Indeed, the persistence of personalized loyalty (i.e. loyalty to a particular individual) in Chinese culture may impede development of organizational loyalty (Castaldi and Soerjanto, 1988). As a consequence, a sense of personal contribution to organisational objectives, so evident for example in the Japanese model of business operation, is not present in Chinese organizations (Yager et al. (1994).

In contrast, Japanese managers come from a culture where, among other things, employees are known for their high degree of commitment to their workplace, and for including it in their in-group. Consequently, the Japanese managers who had taken such sentiments and attitudes for granted found their absence in Chinese work environment puzzling.

There are also other aspects of Chinese culture which might cause some difficulties for joint ventures operating in China.

Traditionally, Chinese personal networking has been important, if not essential, to success, using extended family and other developed relationships and connections to gain cooperation and to get things done. The success of Chinese networking skill in building the effectiveness of small businesses, their interpersonal relationships, loyalties, and a system of mutual support do not seem to carry over to larger organizations, including joint ventures with foreigners. This had implications for discipline. Industrial discipline, a concept implying not only that workers follow a regimen in their jobs, but also the will of supervisors to exercise sanctions in controlling worker behavior, was non existent among Chinese workers. A sense of responsibility to the employer organization, consistency in work performance and follow-through also seemed to be unusual. There was a pervasive need to build identity to the enterprise. Although some joint venture managers reported initial resentment among workers for strict discipline and enforcement of work rules, companies that had adopted clear, enforceable expectations coupled with production bonuses and visible rewards seemed to be more successful (Yager et a., 1994).

An awareness of cultural differences between partners and respect for these could of course help ease complexities and tensions which might arise in an IJV, and thereby increase the chances of the joint venture’s success. But this may be easier said than done. Faulkner’s (1995) study provides a revealing example.

Faulkner found that mutual trust, sensitivity to company culture, and sensitivity to national culture were among the top five attitudes which have a strong association with alliance success. Nine out of ten joint ventures surveyed claimed to have positive attitudes on both or all sides towards national and corporate cultural differences. However, the situation was not always totally trouble-free.

British and Japanese JV

For example, in ICI Pharma, a joint venture of British and Japanese parentage, relationship seems to have met with culture problems. There seems to be, at least on the ICI side, a fundamental difficulty in moving mentally out of the strong ICI culture, into a sensitive understanding of partners from other cultures. The ICI Pharma joint venture has been in existence since 1972, yet ICI can still say: "One of the things that still holds us back in Japan is our lack of understanding of Japanese culture. Relationships are very important in Japan, and we are much less certain about what might spoil a relationship than we would be with a European or US company"

In another joint venture, the Courtaulds/Nippon Paint joint venture, attitude problems also seem to have placed a brake on the development of the relationship. The venture started off well because the people setting it up were sensitive to their cultural differences: "... then there were people changes, and the older people who knew Nippon very well retired, and the younger people came in and didn't understand the Japanese culture, and way of doing things"

The inherent difficulties are involved in adopting and maintaining positive cooperative attitudes in international strategic alliances.

This internal conflict only emphasizes the apparent importance of the attitude question in sustaining a positive alliance relationship (Faulkner, 1995).

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Categories: International Management Culture International Negotiations International Joint Ventures Int HR Management

Organizational culture and joint ventures

August 9, 2007 0 comments

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In addition to national cultural differences, differences in corporate cultures of the partners involved also play a part in the joint venture's human resource management. Corporate cultures embody ways of doing things, such as power structures and control systems, management and leadership styles, and attitudes to investment and risks. Variations in organizational cultures across the parent companies and within the venture might constitute a major impediment to effective implementation and subsequent operations.

British and German partners

The partnership between GEC and Siemens, for instance, has been reported to be marked by contrasts between British firm's decentralized and short-term approach and the centralized longer-term style of the German partner (Financial Times, 3 July 1990).

British and Italian parent companies

One of the international joint ventures among Faulkner's (1995) sample referred to earlier provides an interesting example here. This joint venture, EVC, was set up by its British and Italian parent companies, ICI and Enichem. EVC faced two very strong cultures. ICI have a strong internal culture based on teamwork and debate, whilst Enichem are much more functionally driven. The production director at Enichem for example gets on with production, and is somewhat loath to express opinion related to other areas. In ICI, the concept of Board Member is more broadly interpreted. These different cultures could not fuse easily in EVC, and the chief executive officer had some trouble over clashing cultures as a result.

The issue of organizational culture is also relevant in the context of the formation of an IJV. If the company is created by the partners as a greenfield site, the cultural clash and tension thus ensued might be comparatively less than when the venture is formed by a partial take-over of an existing firm by an outside partner. In this latter case, there are old habits and ways of doing things which might not be appropriate for the new entity and which might prove difficult to unlearn. An example of this was a company studied by Tayeb (1994). Hurricane (pseudonym), a Japanese multinational, had been attracted to ‘favourable’ investment opportunities in south west of Britain.

Japanese multinational looks toward investment opportunities in Britain

Hurricane had chosen this part of the country as the site for its operation primarily because of its high unemployment rate and because it was designated as a development zone, and therefore there were financial incentives for the company to have an operation there. The company first became involved in an existing British-owned electronics firm as partners in a joint venture, because the firm was in financial crisis and welcomed the infusion of capital from their new partners. However, the Japanese partners later met with resistance from the local managers to the technical, managerial and structural reforms which they attempted to implement.

The Japanese managers wanted to produce quality products, with minimum costs, but they had some difficulties in getting the employees to realize the merits of new methods of quality control, e.g. built-in control in the production process, and cost saving practices, such as getting their raw materials in time to go to the production line, (the so-called just-in-time process), thereby eliminating the need for expensive warehouses.

The 'old' company managers and employees were worried about the uncertainties and confusion which could be caused by the change over, and therefore resisted the introduction of new ideas and a new management style. For instance, the unions' resistance to some of the proposed changes rested on fears that the changes might reduce their power or challenge their traditional territorial claims over various jobs and skills. Also, as in some other British firms, a culture of 'them and us' was prevalent within the company which had created a division between the management and employees. This was regarded by the 'new' management team as a serious obstacle to the successful implementation of their proposed policies.

After a few months of negotiations, the Japanese partners proposed either to buy out all the shares or to pull out completely. The former option was accepted by the British managers, and the company became wholly owned by Hurricane Corporation. The Japanese now had the freedom to tackle the situation largely their own way and fundamental changes were soon under way (Tayeb, 1994).

Scottish company sets up an IJV in China

The problem of old habits carried over to the new venture is a concern of the Scottish company which is in the process of setting up an IJV in China. Chinese workers have lived and worked within a Communist structure, which has been proven to be flawed in terms of efficiency.

A standard joke going around among the Scottish Managers is ‘How many Chinamen does it take to change a light bulb?’ As one of the negotiators recalled the actual experience he had, the answer is four.

“We needed a light bulb changing in the house and we had four people coming to change it, one to go up the ladder to put it in, one to hand the bulb up to him, one to hold the ladder and one to supervise, you know. So, they do employ everybody but not everybody is all that productive”.

The challenge facing the company as the managers see it is not to change the cultural attitudes and values of their Chinese workforce, but to help them unlearn unproductive working practices, and replace them with those which are more conducive to greater efficiency.

In addition, what the company is aiming for is to recruit young employees who are basically more adaptable, and who have not been subject to traditional working practices. They will then train these employees to work the Scottish partner way. The belief is that the Chinese would not have any problem with this approach, because they need to be competitive in the world market, so they will be keen to learn the way their foreign partners do things and maybe within 20 or 30 years they will be doing it even better.

German-Czech IJVs

In their analysis of two German-Czech IJVs, Pollard et al (1996) argued that both organizational and professional cultures could affect the operation of a joint venture company. In one case, the transfer of technology from a parent company was successful only because that parent was allowed to dominate the specification and implementation of new systems. Co-operation between the firms would not have worked because of a skills disparity between German and Czech staff.

Posted by lisa
Categories: International Management International Negotiations International Joint Ventures Int HR Management

Socio-Cultural and Political Ecomony Implications

August 9, 2007 0 comments

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National culture and other institutions of the country in which an IJV is situated play a significant part in the actual form that the organization and management style of the joint venture will take. In other words, the host country forms the immediate external environment of the IJV with which it has to interact and to whose pressures and expectations it has to respond. Companies undertaking expansion through IJVs need to understand the significant elements of local country culture, especially in terms of initial negotiations and partner selection.

As far as human resource management is concerned, the IJV’s policies and practices are generally decided by its senior managers, with or without consultation with their employees. But these policies are adopted and implemented having regards to the national context within which the company operates. The political ideology of the government of the day (and the political regime as a whole), the economic conditions of the country (e.g. level of unemployment), the power of trade unions (or lack of it), and the socio-cultural characteristics of employees and managers (and the general public), are examples of a host country’s influences on an IJV’s HRM policies. Moreover, the host country's membership of global and regional pacts and agreements can also have a significant bearing on the organization's HRM strategies. The Social Chapter of the Maastricht Treaty of European Union is an example of this kind.

Major institutions which serve as the channels of influence on an IJV generally fall within six broad categories: legal system, political culture, industrial relation culture, level of economic advancement, membership of global and regional agreements, and the national culture as a whole.

In most countries influences of these institutions on a company’s human resource management are incorporated in the rules and regulations governing employee-management relations, some more explicitly than others. These rules and regulations can either be related to the employees' individual rights, such as equal opportunity, job security, wage levels, work schedules, work injuries and post-employment economic security. Or they can be related to the employees' collective rights, such as unionization, bargaining, the resolution of contract disputes, and participative decision making.

In some countries, there are further rules and regulations which apply specifically to foreign companies operating within their territories, over and above those which apply to all firms. For instance, foreign firms may be required to include local people in their top management teams, and to build or contribute to the construction of local amenities such as houses, hospitals, schools and similar facilities for their employees.

Because of these influences it is argued that the initial decisions taken by the partners in an IJV as to the location of the company would have significant implications for its subsequent management style and indeed its success and survival.

The figure below summarizes the relationship between an IJV and its host country.

Host country influences on an IJV’s human resource management

Legal System HRM Political culture
National International firm's Industrial Relations
Culture HR Management, Culture
Level of policies and Global and regional
economic practices agreements
advancement    

The Collapse of the USSR

The break up of the former USSR into independent republics illustrates another case of some potentially significant implications of macro-level factors for human resource management at the miro-level.

In Kazakhistan, for instance, under the USSR culture, women could and did achieve high positions in business. Now that the country is independent, its old predominantly patriarchal culture, which lay dormant under the Soviet rule, is enjoying a revival, replacing the 'Russian Communist' culture. As a result, the perception of the role of women in the society and at workplace is changing. In the short-term at least it is unlikely that women will have the same opportunities as they had before (Pollard, 1994). Furthermore, the reviving Kazakh culture places a great emphasis on age and seniority and prescribes 'proper' junior-senior relationships, stemming from its nomadic traditions (Rywkin, 1982). This could have repercussions for organizational hierarchy, authority structure, and promotion and compensation policies, among others.

In Conclusion,international joint ventures face additional challenges over and above those experienced by their single-culture owned counterparts because of their culturally mixed ownership. The tensions and dynamics caused by the mixed parentage manifest themselves at the negotiation stage for all types of cross-border alliances, but are specifically acute for human resource management in joint ventures. Management styles have their roots in different cultural assumptions of partners in a joint venture.

It was also pointed out that major cultural values and attitudes, such as attitude to power, tolerance of ambiguity, individualism, collectivism, and interpersonal trust, are relevant to HRM in IJVs.

The location of an IJV can also exert influences on its internal organization and management style through for example rules and regulations governing employment relations.

Posted by lisa
Categories: International Management Culture International Joint Ventures Int HR Management

International HR and Leadership - Web Presentations

August 10, 2007 0 comments

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"Managing Human Resources in the International Firm <http://lisaconsulting.com/presentation/ihrm/>"_

"A Leadership and Management Behavior in Multinational Companies <http://lisaconsulting.com/presentation/leadership/>"_

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Categories: Web Presentations Int HR Management

The Best Way To Terminate An Employee

February 18, 2008 0 comments

Preparation

There must be a dialogue with the employee right from start. Outline your expectations and the company's rules. If the employee is performing poorly, you need to inform them of specific performance issues, in a timely manner. That is called "due process." You shouldn't fire an employee for poor performance if the employee has no idea that his performance is poor.

A detailed summary of the most recent event that has resulted in the employee being considered for termination. All pertinent facts should be included and all facts must be backed up with copies, or if possible the original documents that pertain to the termination decision. Be sure to include all the documentation, not just items which strongly support your case and neglect to include documentation which is somewhat gray or contradictory. The facts reflect the truth of what occurred, and all the facts need to be documented and considered before the final decision is made.

Fire Contractors

Most employment contracts have a clause with regards to the termination of the contract if the employee consistently fails perform to an acceptable standard.

How to Terminate Staff While Keeping Business Relationships

Today's managing partners are increasingly faced with the task of terminating managers, lawyers, partners and associates alike. The reasons for termination can take many forms: poor performance; poor personality fit; lackluster economic viability of the individual; and a host of other reasons. Whatever the cause, the repercussions of termination must be managed.

Clearly, the repercussions of termination are not wholly avoidable. Individuals who are terminated often are traumatized. Often others in the firm, those not let go, are equally fearful. Clients, too, are often at a loss to understand the decision.

PLAN THE TERMINATION MEETING DOWN TO THE DETAILS

The saying "Praise in public, discipline in private" is never more important than when an employee is terminated. All the hard work you put into making sure your documentation is in order can be lost if this step isn't done just right. Using the five W's - Who, What, When, Where and Why is a good checklist to ensure all important issues have been considered.

Who - determine in advance who should be present at the final termination meeting. At a minimum there needs to be yourself, the employee being terminated, and another management witness. Be sure to include the Human Resource professional in such planning.

Personnel Committee

Organize a personnel committee. A personnel committee should include all key "players" so that any decisions to terminate are viewed as firm decisions, not individual decisions of disgruntled partners. It is great to have a lawyer on the committee.

Pertinent Questions

After forming a personnel committee, the committee should develop a detailed plan for the termination.

What - Maintain control of the meeting. Keep it short, to the point and professional. Don't allow the meeting to turn into a debate. By this stage you should have already met with the employee at least once as part of your fact gathering process.

If the employee wants to discuss why the termination is inappropriate allow him/her to finish their statement without interruption and then calmly tell the employee all the facts have already been considered and the decision of yourself and management is to proceed with the termination. Don't try to make the employee feel good during the start or close of the meeting.

Telling an employee everything will be all right, that they had one of the best quality records in your area but their absenteeism was below par, sends mixed messages. Stay focused on the purpose of the meeting.

When - The termination needs to be timely in respect to the most recent infraction which resulted in the associates termination. A sure loser is terminating an employee several weeks after the date of the infraction.

The termination should occur within one-two weeks of the rule violation to be considered timely. Avoid terminating employees on a Friday, as that can result in an employee leaving in a highly emotional state with no where to turn to for help on the weekend. You should plan for your Employee Assistance Department or Human Resource department, if applicable, to assist the employee in dealing with the emotional impact of the termination.

Terminating on a workday other than Friday also allows the employee to quickly begin the process of applying for unemployment insurance, and enables the employee to begin the process of finding another job

Where - Pick a location that maximizes (1) the employee's privacy, minimizes (2)the exposure to other employees and minimizes (3) the distance you will have to walk them to the door. If there is concern the terminated employee may become hostile, you may also need to consider having an off-duty police officer on site. There is a minimal cost associated with such service and the sight of an off-duty police officer in the vicinity is most often all that is needed to ensure an employee leaves quietly and quickly without disruption.

Why

Typically, the manager is not completely surprised by the news. If his work has been dwindling or performance has been questionable, it's often a matter of time before the subject of termination comes up. However, it is always a shock to be told a person that he is losing his position. The firm has a responsibility to handle this step with sensitivity and respect.

So that the employee is entitled to be told why they are being terminated. They should be given a copy of the disciplinary letter outlining the reasons for the termination.

The employee is not entitled to a copy of all the documentation you have assembled. The best method to avoid being asked for information you are not willing to provide is simply not to bring in any more information than needed for the termination meeting.

SHOW THE EMPLOYEE RESPECT ALL THE WAY TO THE DOOR

Walk them to the exit, offer your hand as they leave and wish them well.

WHEN IT'S OVER, IT'S OVER

The time invested in making sure it's done just right goes a long way to ensuring justice has been done toward the departing employee, and greatly lessens your chances of ending up in court.

Posted by lisa
Categories: Operations Management Thoughts and Arguments Int HR Management