Loading

Alison's New App is now available on iOS and Android! Download Now

Study Reminders
Support
Text Version

Set your study reminders

We will email you at these times to remind you to study.
  • Monday

    -

    7am

    +

    Tuesday

    -

    7am

    +

    Wednesday

    -

    7am

    +

    Thursday

    -

    7am

    +

    Friday

    -

    7am

    +

    Saturday

    -

    7am

    +

    Sunday

    -

    7am

    +

Recruitment and Training
Welcome friends, we will continue from the last lecture where we had stopped. So, weare discussing in the last lecture about the International Human Resource Management;this will be the last session of the course, you know of this course. So, I thought weshould discuss about the importance of Human Resource Management in InternationalBusiness. It is well understood everybody knows, you know how important it is; what isthe role of a human resource, right.Why we are discussing it here because obviously, the complexity becomes very highwhen you talk about you know human resource in a international scenario. The point isvery simple that, when you talk about international business, a today businesses arespread over maybe hundreds of company countries, right. For example, companies likeCoca Cola, Gillette, Johnson and Johnson, ABB. So, they are a spread up Siemen’s; theyare spread up in so many different countries and they are operating in so many differentplaces with different culture, different climate, different political ideology, with differenteconomic condition.And when you, when they are when you are working and you have your people out thereor somebody has come to work from outside to India; so there is a, obviously there is achallenge, right. So, this challenge we discussed in the last lecture about the political andlegal challenges, the economic issues and the cultural challenges; so how do you talk tothem, how do you what, shall how would you make them feel comfortable, so thelanguage and the you know climate everything is very important.(Refer Slide Time: 02:03)So, when you talk about international, today we will talk about the international businessapproaches. So, international business approaches are similar to the stages ofinternationalization or globalization. Douglas wind and Pelmutter advocated fourapproaches; the ethnocentric approach, polycentric approach, geocentric approach, andregiocentric approach.So, they said ethnocentric approach is where key positions are filled by the nationals ofthe parent company. So, what it is very simple as says, ethno is key positions are filledby the nationals. So, people of the locals of the parent company, you know the localpeople of this where the company is; that key positions will be filled by them, so that is aethnocentric approach.In a polycentric approach the host country nationals right; the host country nationals arerecruited to manage the subsidiary in their own country. So, here the host country,whichever is the host country, wherever the company is going; the host country nationalsare recruited to manage the subsidiary.In a geocentric approach, the best people are recruited whatever be the nationality, right.So, it feels the whole world is one; so it does not matter. In the regiocentric, the bestpeople are recruited within the region SAARC or you can say the G 20 summit. So, theSAARC or you know any the NAFTA, any zone or block for that right; so in which thesubsidiary operates, example European Union, USA, right So, you have a different regio,regional zones, right.(Refer Slide Time: 03:36)Similarly, what are the types of employees? Now, companies search for prospectiveemployees both from within the country of operations and also outside the country. Now,it recruits three category of employees; parent country nationals, so it is largely said asPCN right, host country nationals which is called HCN, and third country nationals.So, what is this parent country nationals, host country nationals, third country and whatis the advantage and disadvantage? We will see slowly.(Refer Slide Time: 04:09)So, when you talk about the parent country nationals; so that means nationals of thecountry or the parent country where the company is, right. So, when you hire somebodyfrom the parent country nationals in a parent country; what is the benefit? So, betterfamiliarity with the parent organizations goals, objectives, policies and practices.So you are hiring the people from where the company is, right. Easy organizationalcontrol and coordination; obviously, because the people you are hiring are from thatplace, where the company is, so they can easily control and coordinate with theheadquarters, where the major decisions are taken. Effective communication with theparent country staff, so that becomes very simple; because these are the people who caneasily communicate and that these people have a worldwide experience gives a, it alsosometimes gives a worldwide experience for the employeesSo, if you give, if these people are hired; they go into different countries and then theyshare their experiences, so that is also a good learning for them also. But what is the riskwhen you have a parent country national concept? So, when you, the risk is difficulties inadjustment to the foreign language. So, suppose I have heard hired sorry somebody youknow and when he comes here, he finds it tough because the of the foreign language; thepolitical climate, the cultural and the legal climate, right.The cost involved in selection and training is also very high, right. I want to hiresomebody from the parent country you know where the company is; so the selection andhiring is also very costly. Impose inappropriate headquarters style; sometimes people,you know the employees who come from the parent country where the company is, theytry to force their you know ideas there is this the headquarter styles and to try to create asense of difference and discrimination among the employees.So, the ethos, the ethical values are sometimes compromised and that creates a sense ofdespair, sometimes it is a sense of you know disturbance in the among the employees.(Refer Slide Time: 06:19)And then it also creates a family adjustment issues, right. Similarly, the host countrynationals. So, host country, suppose the host country is the country which is where thecompany now is; for example, maybe it is a subsidiary or the whatever, right. So, whenyou are hiring somebody from the host country right; the familiarity with the foreignlanguage, political, cultural and legal climate is one advantage, right.So, there is they know the language well; the cost of hiring would be less, because this isthe host country there that is where you are hiring from, right. So, creates better careeropportunity for the locals.So, the locals get a better opportunity to grow and do well in their career. And they canalso respond to the host country’s demands very fast; because you have we have hiredfrom the local people, so they understand the climate much better, the response of theand the importance sometimes also, right. So, understanding the importance and notclinging to the only values always; makes them little more smart, agile and faster.But what are the risks? The risks are difficulty in controlling the subsidiaries operations.So, so there are subsidiaries operations might not be able to control it, because theheadquarters are at different place and you might not be able to communicate with theparent company well. So, this is the point; difficulty in communicating with the parentcompany. Less opportunity for the host country you know nationals; this is not M, N,host country nationals to gain international experience.So, once you have hired from the host country; so there is no opportunity for them to go,less opportunity to go outside and create get an international experience.(Refer Slide Time: 08:03)Similarly, the third country nationals we say; that means these are the people who areyou know working from in a in a, let us say in one country neither they are from theparent company, the parent you know the country, nor they are in the host country, theyare working in a third country, right.So it is like an Indian working for an American company and a posted in let us sayAustralia, right. So, this is a case we are talking about. Now, these people are generallyfound to have a richer experience right; because they have lot of experience in going todifferent countries that is a advantage. They might be better informed than the parentcountry nationals, right. And, but the risks are that the host country sensitivity; now thiswas an issue which happened with many Indians right and the Asian economy, peoplefrom the Asian economy.Now, these people were you know looked at a way that they were eating up the jobs ofthe localities in many countries. So, the local people of those countries, they becamelittle agitated and they became aggressive towards the Indians and the Chinese like youknow and that created a problem. So, locals might, may not get growth opportunities, sothat is why they get angry right or they get upset.(Refer Slide Time: 09:29)Now, how is recruitment, what are the recruitment sources? So, at the macro level if yousee; ethnocentric require recruitment, it sources the human resources for subsidiariesfrom the parent company nationals. This approach is followed by Proctor and Gamble, Pand G, Phillips, Toyota etcetera like these companies, right.So, what they are doing? The human resource four subsidiaries are from the parentcompanies, nationals. When Phillips filled important vacancies by the Dutch nationals,because Phillips is a Dutch company; non Dutch employees referred them as the Dutchmafia, so, right. Recruiters feel that the parent countries nationals have a sense ofbelongingness with the company.So, this is why they are generally hired right; because they have a sense of belongingnesswith the company which is in the other country.(Refer Slide Time: 10:21)Recruitment as sources when it as a form a polycentric approach if you see. Now, it issources prospective employees including senior managers for the subsidiary from thehost country right; so where they are, so the nationals and the local nationals, examplesouth pacific brewery, a subsidiary of Asia pacific brewery limited, so it hires localpeople. Coca Cola Amatil Limited is a subsidiary of Coca Cola limited and hires thelocal people, right.(Refer Slide Time: 10:49)Regiocentric approach similarly subsidiary sources the prospective employees within theregion, right. Bata sources its employees from south east Asian region. LG sources itsemployees from Asian region. So, you can say they hire the people from the south eastAsian region or the Asian region mostly.(Refer Slide Time: 11:09)Now, the finally, geocentric approach in this, they source all kinds of resources likematerial, parts, finance, human technology; it sounds or to put you know humans inbetween parts finance and technology, but the truth is when you hire, there is an costinvolvement that is why I have put it here, from all countries in the world.Company sources the best prospective employee in terms of suitability for the job fromthe entire globe. Example you see, Indra Nooyi, the Indian national appointed as CEO ofPepsi Cola Limited; it was a very famous personality, she retired I think recently. Andyou now have as you know people like Sathya Nadella and Sundar Pichai right, DineshPaliwal. So, there are different leaders Indians at the moment, there are lot of Indianswho are you know in very top positions, leadership positions in across in different MNCsacross the globe, right.One reason is very simple, because these MNCs are see an opportunity; that theseIndians can help them to enter into the Indian markets well, and not only that they theIndian leadership talent also has got a lot of expertise with them, right. So, that is the oneof the reasons.(Refer Slide Time: 12:25)And when you come to the micro level sources of recruitment; you look at thesubsidiaries, the parent company, the campus recruitment that takes place, then theagencies through the consultants, data banks and internship, summer internship or youknow which is givenSo, these are some of the micro levels of recruitment, right. So, this is for you knowgenerally the, you know low level and the front level managers. So, this is how it lookslike.(Refer Slide Time: 12:47)So, this is the same thing we have discussed, you can see it later on, right.(Refer Slide Time: 12:50)Selection in IHRM. Now, recruitment helps for identifying the sources of prospectiveemployees and motivating them to apply for the jobs. Most of the MNCs, themultinationals used to follow selection procedure based on the talent, job duties, and jobdescription, right.And majority of employees of international firms normally are expatriates either fromthe parent company country national or third country nationals. So, generally the, youknow employees of the you know international firms they are generally hired from theparent country or from a third country; looking at the leadership, their ability, their talentthey are hired, right.But they live, they live as minorities in a foreign countries right; but they are given allkind of benefits, so that they feel comfortable.(Refer Slide Time: 13:35)So, this is how the carrier cycle of an expatriate looks like somebody who is stayingoutside, right. So, you can go through it. So, job in the home country right orheadquarters; international assignment, offers of an international job is given. So,selection based on job fit, international orientation is checked, and training is given ifrequired; so then the foreign country assignment happens.So, if we and then they are deported to the country; if there is a failure, either they aredebriefed or they are sent back; if they are successful, they are maybe they obtainpermanent citizenship or residentship in a foreign country, that also can happen and theymight work. So, many a times expatriates they go to another country and if that is anormal condition today, you must have seen people working in the IT sector in India atleast.They move outside, they stay in some other country and after a certain time period, theyget a green card and then they may be settled down in the country in like US and Canadaand Australia and they do not want to move back to the home land, to the mothercountry.(Refer Slide Time: 14:44)Now, what is the importance? When you talk about international business, internationalhuman resource; cross cultural training is a very important issueNow, what is cross cultural training let us discuss about it. It refers to the variety ofdifferent training courses. Each in essence aims to develop awareness between peoplewhere a common cultural framework does not exist.So, somebody is a German and when he comes to India, he will find a cultural misfit,right. So, it has to be some kind of training given to, some orientation given to them. Ithas two parallel strands; cross cultural awareness training, cultural country specifictraining.So, cross cultural as well as cultural specific right; cross cultural training deals with themanifestation of culture in the workplace, so how people of different cultures can worktogether without any problem. The basis of intercultural relations are not about changingother people, but adapting oneself to the other culture that becomes a challenge, right.So, there was a case of Daimler Chrysler; so Daimler Chrysler, Chrysler being theAmerican part and Daimler being the German part.So, when they you know joined hands, initially they found lot of difficulties; the reasonwas. So, very simple that the culture of both these countries are very different; theAmericans are very outspoken, they are not considered to be as punctual as the Germansyou know, and the Germans are very savvy and they are very technically very fit also,and they are very you know serious in their job. So, this created a kind of differenceamong the work culture and that led to a disturbance, right. So, this kind of issues happenwhen a lot of people work together.Even I have seen in projects; for example in a lot of L and T projects; when people arelast into, when people are working. So, there are lot of Indians and there are also peoplefrom other countries likes Singapore, Vietnam, Japan. So, there is a difficulty inadjustment to the because of the cultural problems.(Refer Slide Time: 16:42)Cross cultural training can be divided into like education; actual training and coaching. Ithelps managers understand how culture affect themselves as individuals; to educate themanagers, to understand how culture affect themselves as individuals. Then training isconducted looking at the way the company can manage their workforce.So it focuses on different ways of management in different countries. So, when you go todifferent countries, what would happen? So, actual training is given, right. And coachingit includes consulting, including that for a particular project. So, at a particular project;what kind of specific knowledge, skill and cultural knowledge is required all these aregiven, right.(Refer Slide Time: 17:21)So, some of the methods let us see more methods are; cultural assimilator is a tool thatconsists of a number of real life scenarios describing puzzling cross cultural interactionexpectations.So, you are, you know this assimilator helps you to go through a real life scenario andthen asks you or expects you to behave in a particular or a manner and then they try tocorrect you. So, the contrast American method is a method where it involvesdemonstration of behaviors that are completely opposed to what is seen in the currentcontext of culture.So, if you expect somebody to be very, you know in your culture; suppose in our culture,people to be very well behaved and somebody would give a welcome gesture. They willdo the opposite of it, so that how does the person adjust to it; when he goes to a placesuppose he does not get this kind of a hospitality or a welcome.Self-reference criterion this method was developed by lee in 1966, who proposed 4 stepsto overcome self-reference criterion. I think I have explained what is self referencecriterion in the past also. So, self-reference criterion is the problem or a criteria, wherethe where an individual tries to compare or think everything in the way he or she hasbeen thinking in his you know home or native place, right.So, whatever I have learned from my culture since my childhood; if I go to another placeand I still I start thinking things to happen in that way, that is called self-reference. So, ifsuppose I expect that in India we all give respect to our elders or senior or anybody whois a stranger also. So, suppose a self reference criterion says, if I go other place; I wouldbe thinking that everybody would welcome me and would be treating me well, but that isnot true, that is not might happen.So, self-reference, reference criterion is to see the world through your own eyes which isdangerous and to just standardize it that is dangerous; it will not happen, so that is what itsays. The first steps involves defining any problem or situation in terms of the expatriatesown culture, followed by definition in the terms of the host culture.So, own culture and host culture. So, how the problem is can be defined? The biascreated by SRC is analyzed and removed in the third stage, right. So, this is the first case,first stage followed by definition, second stage; third stage is it is analyzed and removedin the third stage, and then finally a solution is a simplified business solution is given inthe fourth stage So, through this four stages, the self-reference criterion is managed orhandled, right.(Refer Slide Time: 19:57)Area simulation is another technique which says is the simulation is creating naturalsituation of interaction with people with other culture, right. So, other areas, so thedifferent areas of people and they are a simulation or a artificial condition is created,where they feel like a real life scenario and they are expected to behave and learn out ofit. Cultural self awareness model it includes usage of videotapes with themes and roleplays.So, these are the various methods of how you know cross cultural training can be offeredto people who are moving from one country to another.(Refer Slide Time: 20:33)Now, when you talk about international human resource, another issue is thecompensation and benefits. So, what are these saying? Rewards can be intrinsic andextrinsic, so there can be both sides, right. So, intrinsic reward is a feeling of pride of ajob well done and achievement. Extrinsic include praise from a supervisor, salary,employee benefits, career progression etcetera.Now, compensation is extrinsic reward for an employee, right. Compensation is theamount of remuneration paid to an employee by the employer in return to the employeeservice to the company.(Refer Slide Time: 21:08)So, what kind of you know compensations are given and what is the complexitiesinvolved, let us see? The complexities of compensation management, ok. So, there are avarious complexities; varying requirement for facilities right, varying requirements, thereare different kind of requirements. Exchange rate fluctuations, somebody has come from,they are do two different salaries going; so and the money there is an exchange ratefluctuation, so the money value is going changing.Varying tax rates, inflation rates, varying local conditions, country perspectives,consistency and equity; so the consistency is also has to be there, cost of living, andexpectations. So, when you talk about expectations, compensation and complexities; italso becomes very important from a company’s point of view.When you are hiring somebody and we are bringing them here; how do we compensateand how does he perceive this compensation to be or she perceives this compensation tobe. So, now, I think you have understood that compensation and complexities arise whenyou talk about hiring a individual.And that becomes a challenge; because if you do not, if we do not you know give goodcompensation or enough compensation, then the person might be unhappy or he mightnot like to settle down and then the whole purpose of the human resource management islost.Ok friends, so I have come to the end of this course, this is a huge course; it hasobviously its own complexities, because you are talking about international business. Itis very very important, there is no doubt about it; because you can understand howinternational business is getting affected nowadays, there are so many different reasons,so many different ways and the economics of countries are getting affected with globe.Somebody says you know some experts feel globalization is good, some critics sayglobalization is not good, it is bad.So, in all among all these; but we have seen through different theories like Ricardo’stheory you know so, and Adam Smith’s theory. So, we have tried to understand howinternational business plays a very vital role. And today if you see in this condition whenyou know the corona pandemic is going on and company countries are feeling the heat,that too much of dependence on countries on a few countries like China and all hasbecome a difficult situation, has created a difficult situation for them.So and how do you manage in this you know; when it is suppose this condition goes overalso, after that how do you settle your manufacturing, how do you settle your humanresource, how do you settle the you know how do you understand the exchange ratefluctuations, how do you understand the country’s economic condition, how does thepolitical and legal conditions affect the country and all these taken together when youthink about it. International business becomes a very very important factor.And believe me if international business is not well understood, then the purpose ofmany subjects would be lost; because at the end of the day it is international businessthat has a big impact on the economy of our countries. And this economy of the countriesis one which runs you know, which takes care of the livelihood, the poverty, themalnutrition, the condition of people the human, the medical facilities everything thatyou can think of.That is directly or indirectly connected with international business; because through thatonly we can understand how much you know economy is growing, how much wealth isbeing created in a country. So, all this makes it a special subject and it is very important;so I have tried to give my best to you. I, if I have, if there is any limitation; I think wecan solve it through your questions when you ask me and I will try to answer you all. So,that is all I have.Thank you very much.