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Unit - 1 Morgan'S Model To Define Ihrm
Unit - 1 Morgan'S Model To Define Ihrm
HR Activities
Types of employees
Types of Countries
PCN (Parent-country nationals) are employees whose nationality is the same as that of the
firm headquarters — for example, a German employee of a German company who is working at
a Chinese subsidiary.
HCN (Host-country nationals) are employees who have the same nationality as the local
subsidiary. This could be a Chinese employee working at the Chinese subsidiary of the German
company
TCN (Third-country nationals) are employees whose nationality is different from that of either
the headquarters or the subsidiary office. In the above scenario, this might mean an Indian
employee working at the Chinese office of the German company.
Expatriate
An expatriate is an individual living in a country other than his or her country of citizenship,
often temporarily and for work reasons. An expatriate can also be an individual who has
relinquished citizenship in their home country to become a citizen of another.
An expatriate is a migrant worker who is a professional or skilled worker in his or her profession.
The worker takes a position outside his/her home country, either independently or as a work
assignment scheduled by the employer which can be a company, university, government, or non-
governmental organization. If an employer sends a person from his job in Silicon Valley office to
work for an extended period in its Toronto office, he would be considered an expatriate or
"expat" after he arrives in Toronto. Expats usually earn more than they would at home, and more
than local employees. In addition to salary, businesses sometimes give their expatriate employees
benefits such as relocation assistance and housing allowance. Living as an expatriate can be
exciting and present a great opportunity for career advancement and global business exposure,
but it can also be an emotionally difficult transition that involves separation from friends and
family, while adjusting to an unfamiliar culture and work environment. Hence, the reason behind
the higher compensation offered to these migrant workers.
Repatriate
Repatriate is an employee who is deported from the country where he is working to his own
home country.
LINKING HR TO INTERNATIONAL EXPANSION STRATEGIES
1. Cultural Context
Power distance: This is the extent to which power is distributed unequally among the employees
in between the higher positions and the lower positions. Eg – India is a high power distance
culture (even have a cast system) and USA is a lower power distance culture.
Uncertainty avoidance: People would try to minimize risk they face in a situation (avoiding
paralysis through analysis) usually countries with long history and traditions have a high
uncertainty avoidance. Countries such as USA well come higher risks.
2. Organisational Context
There are many activities affecting the IHRM in an organizational context. Industrial
relations, health and safety, management style, authority structure, organizational structure,
leader ship style and etc. And organization could implement a different structures such as global
product division, global area division and global matrix structure depends on the situation,
subsidiary age and size structure adopted. Controlling of subsidiary would have both formal and
informal control systems. Formal methods would be structure, reporting systems, budget and
targets whereas informal methods would be co-operate culture and personal relationships.
we know some of the transferable HRM policies such as physical layouts, use of
technologies, holiday entitlements, quality circles depending on the culture, motivation and
leadership style, performance appraisals and etc. company expatriates would have to perform the
key activities when implementing the procedures in subsidiary an at the same time adopt the
suitable local norms, standards and value in to the system to make it more localize the
operations. Improving the performance, implementation of corporate culture, solve technical
problems, handling of sensitive information, reduces risk, improve trust and team working skills
are some of the important functions that expatriates should perform during a foreign assignment.
3. Expatriates Recruitment
When starting a subsidiary in a foreign country, there are many reasons why expatriates
are needed. Teaching a new process, setting up a new branch, facilitating the knowledge transfer
between parent and the subsidiary, helping branch to implement matrix integration is some of the
purposes. This would also depend on the relationship between parent and subsidiary, amount of
investment, other host country environment factors. Depending on the host culture, size and the
maturity of firm, relative importance of the subsidiary, moral and ethics balancing of
standardization and localization of HRM could be done. Localization would be the recruitments,
holidays, leave procedures and etc. according to Huo – ―the best IHRM practice ought to be the
ones best adapted to culture and national environment‖. Developing staff members investing in
human capital, career development, good working conditions and good management practice
could help the organization to retain and attract skilled and qualified labour force in to the
organizations. In Sri Lanka Mas holdings is a very good example for a organization which is
practicing this method.
4. International Staffing
There are many ways of staffing international operations. They are ethnocentric,
polycentric, geocentric and regiocentric. Each of this method has its own advantages and
disadvantages. Most of the companies use ethnocentric approach at the initial stage and move to
polycentric approach after some time. Eg;- after operating Sri Lanka for many years Coca Cola
has appointed a Sri Lankan as a country head for the first time. Organizations use expatriate for
international assignment as position filling, management and development and for organizational
development. They could be assigned for varies time periods and would have many roles to play
as expatriate such as agent of control/socialization, network builder, boundary spanner, language
node, transfer of knowledge etc.
5. Expatriate Failure
There are four phases in cultural adjustments which expatriate has to go through in a foreign
assignment. They are,
Crisis/ cultural shock – see differences and negative side off the new culture
Pulling up
Adjustment - There is a high possibility of expatriate to exit during the cultural shock period.
There for in this each stage organizations would have to take many steps to ease the situation.
Eg- food, customs, cultural values (seniority), home sickness etc.
8. International Compensation
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