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AMITY INTERNATIONAL BUSINESS

SCHOOL

MBA
Dr. Namrata Pancholi

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Consequences and Challenges of Changing

Business Environment

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Global competition and differences in

organizational environment across nations
Global Organization Management

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Encourages global organizations to develop

international HR strategies

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TYPES OF INTERNATIONAL ORGANIZATIONS

1.International Corporations
2.Multinational Corporations
3.Global Corporations
4.Transnational Corporations

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International Corporations
Domestic firms that builds on its existing
capabilities to penetrate overseas market.
Example : Honda, General Electric, P&G

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Multinational Corporations
MNCs have operating units (subsidiaries)
located in foreign countries
Subsidiaries function as autonomous units
Examples : Shell, Philips, Xerox

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Global Corporations
Maintains control over its worldwide
operations (subsidiaries) through a centralized
home office.
They treat the entire world as a single market
Examples : Matsushita

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Transnational Corporations
Provides autonomy to independent country
operations but bring these operations together
into an integrated whole through networked
structure
They combines the local responsiveness of an
MNC and the efficiency of a global
corporation Examples : Ford & Unilever
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INTERNATIONAL HUMAN RESOURCE

MANAGEMENT
Simple definition is the process of managing people in
international settings
Scyllion (1995) defined IHRM as the HRM issues and
problems arising from the internationalization of
business, and the HRM strategies, policies and
practices which firms pursue in response to the
internationalization process
IHRM is the management of HR in business operations
in atleast two nations

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Differences between Domestic and Global

Human Resource Management

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IHRM Practices
International staffing
Pre-departure training for international
assignments
Repatriation
Performance management in international
assignments
Compensation issues in international
assignments

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Case: An Indian Expatriate in Paris

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You are head of HR for tlc consulting

TLC is opening an office in Paris, France.
Mr. Ashutosh Mehra, Director of Sales
&Marketing to assume overseas
responsibilities
The detail is mentioned in the case given to
you.
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Read the case given to you and do the following:

Which are the most pressing considerations that you
need to address?
Mention the considerations clearly to your team and
guide them on different sources/ websites that they
can refer to answer the issues.

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You are head of HR for TLC, Consulting, a

firm that deals in hotel and restaurant
management consultancy.
Your firm is opening an office in Paris, France and
Mr. Ashutosh Mehra, Director of Sales &Marketing,
has been asked to assume responsibilities for the
expansion.
The assignment would last for atleast 3 years.
Although Mr.Ashutosh has widely travelled to
Europe but this is his first long term overseas
assignment. Mr.Ashutosh is also willing to shift his
family to Paris. His family detail ar as follows:

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Mr. Ashutosh and his family have moved to their new

home which is purchased on loan. His wife is an
elementary school teacher and is insecure how this
assignment will affect the job security.
Their children Aditya(14yrs) and Kiran(10yrs) are
studying in school. None of them know French. They
have heard of some good American and English
speaking schools.
His present salary is 45 Lacs /annum.

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Q.1. Which are the most pressing considerations

that you as an HR manager need to address to
prepare Mr.Ashutosh for the overseas
assignment?
Q.2. Mention the considerations clearly to your
team(5-6 EXECUTIVES) and guide them on
different sources/ websites that they can refer to
answer the issues.

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As head of HR, you are supposed to put

together a team of 5-6 HR executives and put
together the most pressing considerations that
you need to address and that would allow Mr.
Ashutosh to move his family to Paris while
still maintaining his present life style and his
family can feel adapted to the new
environment with minimum difficulty. Which
sources would you provide to your executives.
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1. Visas and Permits

2. Relocation allowance and housing
3.Language and culture training
4. Spouse employment concerns issues
5.Health/ Medical/ insurance
6. Compensation and incentives
7. Education and Children
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Following Websites:
Indian Embassy in France (www.ambafrance-in.org/ )
French Consulates in India
Expatica.com(www.expatica.com/france.asp)
Indians in France (www.indiansinfrance.com)
Easy Expat (www.easyexpat.com)
Centre of disease control(www.cdc.gov/travel/)
a currency calculator.
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International staffing refers to the process of

selecting employees for staffing international
operations of an MNC.
MNCs can be staffed using three different
sources
a. Home country or Parent Country National
(PCN)
b. Host Country Nationals (HCN)
c. Third Country Nationals (TCN)
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Pre-departure Training for International

Assignments
-To make it easier for the employee to assume
job responsibilities and be effective in the
foreign country as soon as possible
- To facilitate cultural adaptation as quickly and
as effectively as possible

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3 elements of T&D programme

1.Language training
2. Cultural training
3. Managing personal and family life

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Expatriate
A person living outside citizenship country

Global Mind-set
A mind-set that combines an openness to and an
awareness of diversity across markets and cultures
with a propensity and ability to synthesize across
this diversity

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Family
Nine of ten expatriate failures family-related
Unhappy spouses major reason for early return
Company losing a million-dollar corporatetraining investment in executive

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Language Trap
International business person speaks only home
language
English language has become lingua franca
Chinese new hot language to know

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Expartiate Services

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-Health care programs to assist companies and

expatriates.

Claims administration
Language
Translations
Currency conversions
Service standardization
www.ExpatExpert.com
www.branchor.com
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Banking services
Online, 24-hour assistance
Training
Culture and language
House hunting, utilities hook up, grocery and
hardware shopping, long-distance care for relatives,
schools, organizations, and cultural items

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Housing Allowance
Permits executive to live at same standard as at home

Cost-of-Living Allowance
Based on differences in price of food, utilities, transportation,
entertainment, clothing, personal services, and medical
expenses as compared to home

Allowances for Tax Differentials

Ensures expatriates will not have less after-tax pay at home

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Assignment

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Percentage of women in work force

And reasons (UNEQUALITY, GLASS CEILING) past , today.
Asian Countries ( Special reference to India,
China, Japan, Philippines)
Brazil
Australia
Canada
UK
S. Africa
France
Germany
US
Mexico

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NSSO
Women in Workforce
India: Rural Participation higher than Urban.
25.6% in 2001, 25.5% in 2012.
Delhi 10.% women as against 53% men
Ahmeabad11. 7%
Kolkata and Mumbai -18%.
Chennai and Thiruvananthapuram -20%.
Coimbatore and Bengaluru, at nearly 25%

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Hofsted Model

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Geert Hofsted (Prof. Emeritus Maastrick University)

Dutch Researcher conducted what is known as the
largest organizationally based study ever.
-Found differences in the behavior and attitudes of
116,000 respondent from 72 countries who
worked for subsidiaries of IBM.
-Based on the data they identified 4 major cultural
dimensions, later o which 5th dimension was
added.
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Geert Hofstede: Culture & the Workplace

Hofstede, G., 1980. Cultures Consequences:
International Differences in Work-related Values,
Sage
Hofstede, G., 1984. Cultures Consequences:
International Differences in Work-related Values,
abridged edn, Sage, Beverly Hills
Hofstede, G., 1991. Cultures and Organizations:
Software of the Mind, McGraw-Hill
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Hofsted Model

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Geert Hofsted (Prof. Emeritus Maastrick University)

5 Dimensions of a model
Power v/s distance
Individualism v/s Collectivism
Masculinity v/s Feminity
Uncertainity/ Avoidance
Long / Short term orientation

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Arab Middle East people, culture, language and

negotiations

Initial meetings should be about relationship building.

Always wait for your counterpart to change the subject matter

to business.
Meetings can be chaotic. Always be prepared to exercise
patience.

Phone calls are taken during meetings and people may enter the
meeting room unannounced and proceed to discuss their own
agendas.
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Punctuality is expected of foreigners. Although the

Arabs place a high emphasis on punctuality they
rarely practice it themselves.
If negotiating, remember the Arabs were a trading
people and are excellent negotiators.
Decisions are made slowly. Bureaucratic formalities
tend to add to delays.
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. The last ten days of Ramadan are the most intense so

do not expect to get any business done during that time.
Always dress modestly. Men should be covered from
knees upwards and women from the ankles upwards.
The two sexes generally do not mix..
Turks, Iranians and Kurds all have distinctive cultures
and languages
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If giving presents remember Muslims do not

drink alcohol, or eat pork or any meat that is
not halal. Muslim men are also not allowed
to wear gold or silk.
In business Muslims are not allowed to spend,
use or invest their money in activities that
involve interest, gambling or alcohol
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Working practices in the United States

In the US, punctuality is an essential part of
business etiquette and as such,
scheduled appointments or meetings must be attended
on time.
Deadlines are strictly adhered to in American
business culture.
Americans place great emphasis on getting the best
results in the quickest time
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Personal competence, professionalism, and accountability for

individual performance are highly valued in American
business culture
In accordance with American business culture, the hierarchical
chain of command often supersedes personal relationships .
Company policy and business procedures such as legally
binding contracts, are aspects of American business culture
that require strict compliancy
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Doing Business in China

Beliefs
Feng Shui
Herbal Medicine
Acupuncture
Fortune Telling
Numerology
Chinese Zodiac
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Public Behavior
If you are introduced and people clap, it is
considered polite to clap along
Avoid expansive hand gestures when
speaking
Hand holding by people of the same sex is
common

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the number four should be avoided

five is negative whereas eight means fortune
and therefore is a lucky number.
Colours
Red is auspicious, but writing in red in
personal relations can mean differently

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to impress your Chinese host with a gift and

for long term relationship, dont give an
umbrella
Do not give umbrella as a gift
are typically very patriotic
You can also expect some surprisingly
personal questions about your family,
age, and sometime even your salary.
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Umbrellas would not be welcome in most

places in China because the pronunciation of
'umbrella' resembles separation.
Clocks would not be welcome, particularly on
someone's birthday because the pronunciation
of 'clock' resembles termination, which means
death.
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If you want to give your friends some fruits,

remember to buy an even number of them
because odd numbers would bring bad luck. So
buy 10 apples instead of 9.
When it comes to some old people, something
practical should be considered. A walking-stick,
some valuable food such as bird's nests or
Chinese mushrooms would be highly welcome
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Japan- Do not open a gift in front of a Japanese counterpart

unless asked, and do not expect the Japanese to open your gift.
Avoid ribbons and bows as part of the gift wrapping. Bows as we
know them are considered unattractive, and ribbon colors can have
different meanings.
Do not offer a gift depicting a fox or badger. The fox is the
symbol of cunning.

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When thinking of the United Kingdom (UK),

images of the Queen, glorious ancient castles and
thousands of years of history and heritage come
to mind.
It has a diverse culture of Scots, Irish, Welsh
cohabitating mostly peacefully.
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Cultural Diversity

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The United Kingdom (UK) is comprised of four

countries: England, Scotland, Wales, and Northern
Ireland.
It is important not only to be aware of these
geographical distinctions but also the strong sense of
identity and nationalism felt by the populations of these
four countries.
British stands for all whereas English???
Formerly a very homogenous society, since World War II,
Britain has become increasingly diverse as it has
accommodated large immigrant populations.
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Doing business in the UK

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The British are rather formal.

-Many from the older generation still prefer to work
with people and companies they know or who are
known to their associates.
-Younger business people do not need long-standing
personal relationships before they do business with
people and do not require an intermediary to make
business introductions.
-Nonetheless, networking and relationship building
are often key to long-term business success.

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Rank is respected and businesspeople prefer to

deal with people at their level.
If at all possible, include an elder statesman on
your team as he/she will present the aura of
authority that is necessary to good business
relationships in many companies.

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Business meetings
Punctuality is a very British trait.

How meetings are conducted is often determined

by the composition of people attending.
If everyone is at the same level, there is generally
a free flow of ideas and opinions.
If there is a senior ranking person in the room, that
person will do most of the speaking.

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-There will be a brief amount of small talk before

getting down to the business at hand.

-If you make a presentation, Be prepared to back up
your claims with facts and figures.
-Maintain eye contact and a few feet of personal
space.
-After a meeting, send a letter summarizing what was
decided and the next steps to be taken
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Basic British Etiquette Tips:

Business Dress
* Business attire is conservative.
* Men should wear a dark colored, conservative business
suit.
* Women should wear either a business suit or a
conservative dress.

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Greetings
* Shake hands with everyone at a meeting upon arrival.
* Maintain eye contact during the greeting.
Titles
* Only medical doctors use their professional or academic titles
in business.
* Most people use the courtesy titles or Mr, Ms.

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Business Gifts
* Business gift giving is not part of the business culture.
* If you choose to give a gift, make certain it is small and
interesting.
* Good gifts include desk accessories, a paperweight with
your company logo, or a book about your home country.
* Inviting someone out for a meal can be viewed as a gift.
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Doing Business in Brazil

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Brazil is the fastest growing economy in Latin

America.
The culture is a thriving fusion of Portuguese,
African and indigenous Indian influences, all of
which have left their mark on Brazilian society
resulting in a rich, distinct culture.
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Brazilian culture is known for its hospitality, openess

and colourful and rhythmic events such as Carnival.
Traditionally a very agriculturally based economy,
Brazil is known for its production of sugar, coffee, soy
beans, orange juice and beef.
Brazil also has very strong service and industry
sectors which have fuelled its economy over the last
century.
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Brazilian culture is known for its hospitality, openess

and colourful and rhythmic events such as Carnival.
Traditionally a very agriculturally based economy,
Brazil is known for its production of sugar, coffee, soy
beans, orange juice and beef.
Brazil also has very strong service and industry
sectors which have fuelled its economy over the last
century.
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-Although Brazilian culture tends to be relatively

informal, Brazilians are quite fashion conscious. It is
important therefore to dress smartly and conservatively.
-Brazilians love socializing and spending time with each
other.
-This is often done over lunches or mid morning coffee
breaks which can go on for several hours.
-Often coffee is served before or during a meeting.
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-In most Brazilian cities, working hours are 8:30 am to

5.00pm with an hour or two in the middle for lunch.
-Businesses are usually open from 9:00am to 7:00pm
Monday-Friday and 9:00-1:00pm on Saturday.
-It is important to schedule business appointments at
least two to three weeks in advance and confirm them
once you have arrived in Brazil.
-Also try to leave a few hours in between them should
they go on longer than anticipated.
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-Brazilian companies tend to have vertical hierarchies

where managers at the top make most of the

decisions.
-These positions tend to be dominated by men, but
women are slowly gaining employment in executive
roles.
-Differences in class are still very prevalent in
Brazilian society and business culture

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-Brazilian Economy

Rank7th (nominal) / 7th (PPP)

Trade organisations
Unasul, WTO, Mercosur, G-20
GDP by sector
agriculture: 5.5%, industry: 27.5%,services: 67%
(2011 est.)[2]
Inflation (CPI) 6.52% (June 2014)[3]
Population belowpoverty line 21.4%
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Main industries Textiles, shoes, chemicals, cement,lumber, iron

ore, tin, steel, aircraft, motor vehicles and parts, other machinery and equipmentEaseof-doing-business rank
130th (2013)[ExternalExports$256 billion (2012 est.)Export goods
Transport Equipment, iron ore, soybeans, footwear, coffee, autos
Main export partners
China 17.0%
United States 11.1%
Argentina7.4%
Netherlands 6.2% (2012 est.)[
Imports$238.8 billion (2012 est.)[8]
Import goods
machinery, electrical and transport equipment, chemical products, oil, automotive
parts, electronics
Main import partners
China 15.4%
United States 14.7%
Argentina 7.4%
Germany 6.4%
South Korea 4.1% (2012 est.)
$

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