MHR Exam 3

Organizational structure control systems: P&G example continued:

"Strategically, P&G has exited certain categories in order to focus on our core businesses and enhance the growth profile of the portfolio," said A.G. Lafley, Chairman of the Board and Chief Executive Officer of Procter & Gamble. "Smucker's core beliefs, values, and principles are very much the same as those of P&G. We cannot think of a better long-term home for P&G's former coffee employees and brands than Smucker." For smucker, the Folgers transaction is in keeping with its plans to be the top food brands in North America and enables it to acquire the leading ground coffee brand in the US. $3 billion deal, Completed on Nov. 6, 2008 P&G owns more than 50% of Folgers though still (Reverse Morris Trust Technique)

Organizational structure control systems: Info about organizational structure: How the org structures have to change b. how should the design be based? what are the tradeoffs of structural choices?

-Organizational structures must change to accommodate a firm's evolving internationalization in response to worldwide competition. - The design of an organization should be contingency based, taking into account the variables of that particular system at that specific point in time (meaning tweak here and there based on needs) A firm's structural choices always involve tradeoffs: 1. Differentiation & integration (ammnt of autonomy, specialization, generalization, lack of comm.) 2. Globalization & regionalization (Be Global; Act Local) Need to decide where to temporarily put the focus.

Staffing and Managing the global workforce: corporate programs to develop global managers example: 3 companies:

1. ABB rotates 500 managers to different countries every 2-3 years (rotates so managers of the company have around 2-3 years. 2. Pepsi brings foreign managers to the United States for one-year assignments 3. British Telecom uses informal mentoring between expatriates and potential assignees- tools and catering content

Staffing and Managing the global workforce: Expatriate training techniques: (8)

1. Area studies (facts about place like language, food, politics, customs,etc. 2. Culture assimilators (scenario training) 3. Language training 4. Sensitivity training (based on scenarios, learn what assumptions making) ex. where to sit? Ppl alwyas sit in the same place 5. Field experiences 6. Mentors at home and abroad 7. Host-family surrogate 8. Other?

Staffing, Training, & Compensation for Global Operations: Reasons for the shortage of upper level managers: 1. Brain drain 2. immigration and cultural adaptation 3. decline in willingness of managers from developed economies to take assignment abroad

1. E.g., over 1 million Chinese went to the US to study bw 1978 and 2006, 70% of whom did not go back However this is changing in recent years with students returning to china. 2.problems regarding immigration and cultural adaptation 3. global turmoil and uncertainty, concerns for families' safety, concerns for partner's career, concerns for one's own career... in developing economies - there is a deficit between supply and demand. Even if ppl go they are less likely to stay. It is hard to adjust especially family So the challenge is not only to recruit but also to retain talent.

Organizational structure control systems: Control systems for global operation: 1. Direct coordinating mechanisms: 2. Indirect coordinating mechanisms:

1. Effective Staffing. E.g., McDonald's in Moscow corps directly over suboordinates find the right people, ability to have face to face meetings Problem: quality control Solution: built processing plant in Moscow and provided managerial training Other possibilities: visits by head-office personnel and regular meetings 2. Not so much about daily operations, going through something else- just say you do the work, they will eval. more about budgeting, cost cutting, satisfaction Examples: sales quotas, budgets, and financial tools and reports Three financial statements: One for accounting standards in host country One for the standards in the home country One for consolidation

Staffing and Managing the global workforce: Staffing: other individual differences personality and the big five how do these aspects of personality relate to expatriate performance?

1. Extraversion (friendliness, gregariousness, assertiveness, activity level, excitement seeking, cheerfulness ) 2. Agreeableness (Trust, morality, altruism, cooperation, modesty, sympathy) ( get along with people 3. Conscientiousness (self efficacy, orderliness, dutifulness, achievenement striving, self discipline, cautiousness) - caution and self discipline will lead to effectiveness 4. Neuroticism (anxiety, anger, depression, self consciousness, immoderation, vulnerabilot ) 5. Openness to experience (imagination, artisitc interests, eotionality, adventurousness, intellect, liberalism Strss managment and tolerance are imp and extrversion for choosing expats.

Staffing, Training, & Compensation for Global Operations: Staffing Company Operations in Emerging Markets BRIC companies:

1. Have outpaced the supply of mid- and upper-level management 2. Need for up to 75,000 business leaders, but 3000-5000 may be available 3. Many are simply not at the skill level required by foreign companies There is a shortage!! The ability to staff subsidiaries in emerging market economies with local managers has become a major challenge in the race for recruiting and training local talent. Emerging economies such as Brazil, Russia, India, and China (BRIC Countries) have been developing so rapidly and have attracted increasing overseas investment that they have outpaced the supply of suitable mid-level and upper-level managers in their own markets.

Staffing and Managing the global workforce: Skills expatriates learn abroad: (3) and examples

1. Managerial and people skills (most important bracket) "Working abroad makes you more knowledgeable about the questions to ask than about the answers" "I became soft-headed...I am definitely better at working with others" 2. Multiple perspectives "I learned what it feels like to be a foreigner...I could see things from their perspective" 3. Tolerance for ambiguity (learn patience but not pasivity) "Because I only understood a fraction of what was really going on abroad, maybe 50%, I had to make decisions on a fraction of the necessary information. Now I can tolerate non-closure and ambiguity much better"

Organizational structure control systems: challenges with global structures 1. Matrix product structure: (see all the images to understand these structures) 2. matrix geographic structure:

1. On the very top it is the presdient and then it It is like a grid. on the left, you have director of prodcuts, then product managers A, B, C, and D. On the top, there are all of the VP's managing Product desigm, mfg, finance, mkt, and HR, etc. Here, managers are in charge of different products there is overlap with mktg and working on a specific product category. Example: working on toilet paper and then under a specific subset like eco friendly. 2. Product 1, 2, and 3 on the left side. Above, there are the different areas split out into specific geo divisions.

Staffing, Training, & Compensation for Global Operations: Where do employees in an intl workforce come from? and who has what type of KSAOs?

1. Parent country - where an organization's headquarters is located 2. Host country - where an organization operates a facility other than the parent country 3. Third country - neither the parent or the host country of an employer 4. Expatriates - employees assigned to work in another country

Staffing and Managing the global workforce: Solutions for cross cultural teams (3)

1. Select the right team members Consider language barriers Select individuals who are open to and knowledgeable about other cultures (high CQ) Train team members on the skills they lack 2. Build trust Take time for non-task focused interactions Meet face-to-face frequently Acknowledge differences and establish an agreed upon "hybrid" culture 3. Provide a strong team leader Help team set clear and agreed upon deadlines and objectives (i.e., team charter) Provide developmental feedback to team members Avoid cultural dominance - create equal status between cultures

Staffing and Managing the global workforce: Potential causes of expatriate failure (7) (think of kelly case)

1. Selection based on headquarters (versus relevant global) criteria 2. Inadequate preparation, training, orientation 3. Alienation or poor support from headquarters 4. Inability to adapt to the local culture 5. Challenges with spouse/partner and/or children 6. Inappropriate compensation and financial support 7. Inadequate or lack of programs for career support and repatriation

Staffing, Training, & Compensation for Global Operations: Some HR strategic tasks:

1. Staffing strategy: hr planning recruiting, selection, placement staffing the right people 2. Development strategy: performance mgt., traiining, devel., career planning give the right skills 3.Compensation strategy: Wage/salary, benefits, incentives motivate them! Overall goal: increase effectiveness and performance

Organizational structure control systems: How pat and Gavin decided to expand: (remember this is from chapter 3) how might we accomodate this expansion and exporting into the structure?

1. Upgrade from garage operation to manufacturing facilities 2. To Canada!- Selling and shipping soap to beauty companies in Canada 3. To Europe!- exporting soap to beauty companies in Germany & France could have a liason in each place- exporting is not very hard to do. Liason for canada, france, and germany.

Staffing, Training, & Compensation for Global Operations: What KSAOs are needed for global operations? 1. KSAOs related to host country 2. KSAOs related to parent country (coming from home country and then going global) 3. KSAOs linking H&P:

1. a. Language(s) b. Knowledge of local government regulations, market, distribution channels, cultural customs & norms... c. Relationship with key players such as the government d. (preferably) Experiences working with or for foreign companies 2. a. Knowledge of company's goals, products, technology, policies & procedures b. Loyalty to the company c. (preferably) Experiences working with or for foreign companies 3. Bilingual/multilingual skills, Cultural adaptation & flexibility, Ability to link headquarters & local host subsidiaries

Organizational structure control systems: Example: how does walmart control and coordinate such a vast empire?

1. governance structure-- a. board of directors b. Chairman c. Exec mngment 2. Hierarchical structure & reporting system 3. Staffing decisions There are geo components biggest retail company in the world. Full order goes like this: presidents and CEO's, to vps, chief officers and senior vp's, to above store mnrs, to in store managers to management trainees to instore hourly workers.

Staffing and Managing the global workforce: Expatriation process (steps:

1. honeymoon phase ( excited, new climate, exotic, yay! little time and high degree of adjutment) 2. then to culture shock (discomfort and disillusionment, low degree of adjustment and low time) movie examples: eating only with right hand, etc. 3. Adjustment/adaptation to environment (learning, adaptation to environment more time and slightly higher degree of adjustment - both ways: perspn going into foreign culture and local people learning from foreign person (most people only get as far as this point) 4. Mastery (confidence and comfort which takes a long time and a pretty high level of adjustment-- means bicultural, multicultural, comfortable -- motivation, confidence and support needed 5. Repatriation (the same process happens for you all over again

Organizational structure control systems: there are three ways to organize:

1. product 2. geographic 3. function you can change the structure based off of what you need to achieve first. It all depends on your strategic priority . you do want to get product under control first, however.

Staffing, Training, & Compensation for Global Operations: What is HRM and what are the primary objectives?

1. recruiting 2. training. 3.payment 4. labor relations 5. policies and procedures

Staffing, Training, & Compensation for Global Operations: Why the shortage of upper level managers? 1. Brain drain

1. smart people from different countries go to study in western countries and then dont go back. They want to develop themselves. They are losing their smartest people to the USA or other developed countries. eXample: china but as opps increase in china, more people are returning to china economy here is difficult (in us) mexican workers are also returning to mexico. So finally supply in host countries for MNC's is going up again!

Staffing and Managing the global workforce: Team effectiveness: the input-process-output model of team effectiveness

1. team characteristics (tenure, leader, cultural diversity) 2. processes (conflict cohesion learning problem solving ) 3. performance input process output model- team characterstics (most difficult part) --> processes--> performance

Organizational structure control systems: Emergent structural forms: (4)

1. teams as global-local structure (teams on ad-hoc basis) 2. interorganizational networks (big subsidiaries, gives orgs a lot of flexibility big/small partnerships) 3. The global E-corp network structure 4. The transnational corp (TNC) network structure

Organizational structure control systems: HWC strategic motivation and international activities cont. 4. Identify alternative international activities that might be more appropriate to help HWC achieve its strategic objectives 5. What structure would be appropriate for HWC after the acquisition? 6. How would your recommended structure help HWC address its integration and control needs?

4. Partnership--> acquisition-- later acquire after feeling comfortable and after getting govt and country acceptance first. 5. Joint ventures strategic alliances first (a smart and strategic approach) 6. after this, you need to focus on how to staff. HR practice - who to put as the boss? Integration and control needs. - arrangement for chinese staff memembers- major staff members- like factory manager. Two permanent staff members to stay and be comanagers.

Organizational structure control systems: challenges with global structures 1. Matrix product structure: (see all the images to understand these structures) cont. advantages of working under this overlap

Advantage is comm and info. You function as an agent sending info flow and comm-- helps to create innovation. Drawbacks: confusion and being overwhelmed by comm or inefficient comm. complexity grows exponentially

Staffing, Training, & Compensation for Global Operations: What attracts potential recruits in emerging markets?

All references working on their psychology-- have a good brand, rep, culture 1. Brand A global "name brand" known for its excellence 2. Purpose A company that is breaking into new markets, with new models and strategy 3. Opportunity A company that provides a fast-track training & career path 4. Culture An organizational culture of openness and transparency 5. Other?Need an overall holistic approach, great ideas but hard in practice

Organizational structure control systems: P&G restructuring:

August 2014, chose to drop around 100 brands and concentrate on the remaining 65, which were producing 95% of P&G's profits. Selling: 1. In March 2015, sold Vicks VapoSteam U.S. liquid inhalant business to Helen of Troy (1st health-related divestiture) 2. In February 2016, transferred Duracell to Berkshire Hathaway through an exchange of shares 3. On October 3, 2016 sold 43 of its beauty brands to Coty in a $13 billion deal They felt the need to reflect brand shaking off/acquiring in order to focus more on the remaining brands. Focus now on: Homecare and personal family need categories

Staffing, Training, & Compensation for Global Operations: BRIC shortages in staffing:

Brazil: Deficit at upper level management Russia: deficit at all mngmnt levels India: deficit starting at the middle level. Also dealng with brain drain. China: Severe deficit at all levels of mngmnt.

Organizational structure control systems: How pat and gavin decide to diversify its products into related categories: how they continue to expand internationally:

Categories: Laundry detergent, dish detergent Shampoo, shower gel Toothpaste Toilet paper, tissue paper, paper towel Disposable diapers Begins to build factories at international locations to make it cheaper to produce Adding related categories: means you stay in the same space. a. similar ingredients to make b. sold in similar outlets so related in terms of tech and ingredients can combine procurement, r&D and mktg.

Staffing, Training, & Compensation for Global Operations: What is the challenge for staffing company operations in emerging markets? What are the top 3 most challenging locations for new assignment?

China, Brazil, UAE- these are the top three places for new assignment and also the most challenging. They are the most challenging for: staffing, and retaining. BRIC companies- demand has way outpaces supply- need 75,000 business leaders and there are only 3000-5000 available upper level managers are directly needed by MNC's- many are not at the skill level needed.

Staffing and Managing the global workforce: Staffing expatriate positions: Criterion Characteristics

Criterion: Technical ability Technical skills do NOT necessarily help adaptation to a new cultural environment Characteristics of succesful expatriates: Language skills Family flexibility (seem obvious and often overlooked same with language skills) Intellectual capital, knowledge, skills, understanding, & cognitive complexity (smart and willing to know alot) (this along with psych capital are part of cultural intelligence) Psychology capital (effectiveness through internal acceptance of different cultures & a strong desire to learn from new experiences)

Organizational structure control systems: The structure that pat and gavin chose to use when they expanded and started exporting:

Domestic structure + foreign subsidiary Starts with pat and gavin and theyn they have elected a divisional manager (scott) for the soap side of the businesss which means that he deals with the finance, production, mkt, and HRM for the hq depts. and then they hire ann VP of intl operations (scott) who deals with the overseas subsidiaries of Canada, Germany, and france

Staffing, Training, & Compensation for Global Operations: Staffing approaches: 1. Ethnocentric what it is and advantages and disadvantages:

Ethnocentric—foreign subsidiaries have little autonomy, operations are centralized, & major decisions are made at corporate headquarters use the home country knowledge, typically uses a globalization strategy- standard, global knowledge. wanting talent that knows procedures, policies and everything inside out. PCN's parent company- needed when parent company needs to protect operations or company - Key positions in management are held by parent company nationals (PCNs) Chosen when: a high level of technical capability is required; for new international ventures requiring managerial experience in the parent company; there is concern for loyalty to the company

Organizational structure control systems: Scenario: if they had chose to ""not put all their eggs in one basket", then Gavin and Pat would have engaged in Unrelated diversification:

Examples: Coffee Potato chips Peanut butter Cooking oil Pet food Battery They just can choose random companies that they like and buy them. now they have both related and unrelated products and a huge company.

Staffing and Managing the global workforce: best practices for expatriate and organization for fostering succesful expatriation:

Expat responsibilitiies: Desire and motivation Family support Realistic understanding of position pre-acceptance Cultural intelligence The organization's responsibilities Selecting the right people for the job Provide extensive, ongoing training Support throughout the adjustment process- communication is critical Facilitating the adjustment of families, especially dual career concerns

Staffing and Managing the global workforce: Summary: staffing expatriates three things to do and be aware of:

Expatriation can be psychologically difficult, even for those who are technically competent ( doesnt always work alone) Need careful attention to who is selected for foreign assignments Need to think beyond common staffing models (e.g., ability and conscientiousness) to successfully staff international assignments

Organizational structure control systems: P&G's categories now and where they are focusing:

Fabric care, home care, grooming, baby car, feminine care, oral care, family care, personal health care, hair care, skin and personal care. focusing on selling and mkt in: Asia pacific, europe, greater china, india, the middle east, south america, north america.

Organizational structure control systems: The structure that pat has currently (pat soap situation) and the pros and cons? :

Functional structure: Has general management on the top and then leads down to R&D, Production, Sales, Marketing and finance all on the same level. This is the most basic org structure. pros: Specialization- experts and background cons: hard to avoid functional psilos-- lack of collaboration with other depts (only working with ppl in your dept) so the company then stays small. This is the psilo effect: the bbiggest issue. Ppl are so entrenched in their own department that they dont see th bigger picture.

Organizational structure control systems: How p&G globally and locally structures itself:

Global business units (GBU's)-- build major global brands Global business services (GBS)-- same thing but for services Selling and marketing operations (SMOs)-- build local understanding (understand cultural customs) Corporation functions (CF)-- maintain leading position

Staffing, Training, & Compensation for Global Operations: Staffing approaches: 3. Global, what it is and advantages and disadvantages

Global—relationships between headquarters and foreign subsidiaries tend to be extremely collaborative; each participant contributes information, perspective, & decision-making Talent from all over! ex. german mngr sent to india, doesnt matter where from, as long as KSAO's are good. blurred boundaries: expands boundaries -Best person is found to fill the position, regardless of what country s/he comes from Pros: large pool to look at for skills (increased pool of telent) cons: more costly to look at such a big pool and time consuming hard to adjust to both host and other home country culturalization, more adaptation needed.

Staffing and Managing the global workforce: Factors that influence the integration of expatriates with local staff: Factos helping : factors hurting:

Helping: Forming close working relationships Learning local language Transferring technical/business knowledge Integrating into local life Cultural sensitivity Willingness to learn Adaptability Other? Hindering: Not using team concept Not learning local language Arrogance Spouse/partner/family adjustment challenges Being autocratic We-they mentality Lack of curiosity Acting "like back home" Other?

Staffing, Training, & Compensation for Global Operations: Trend of inpatriation for a staffing approach:

Inpatriates: Managers with global experience with global experience who are transferred to headquarter country so that their overseas business and cultural experience and contacts can facilitate interactions among the country's far-flung operations. not expatriates but inpatriates-- expats with knowledge and skills etc and then they call you back to hq to work there. rare individuals- they are expensie, few, mobile- they move around a lot and get poached inpatriates might not be effective- the inbetween they are seen as outsiders in either place. It is hard to gain trust, buy in and access.

Staffing, Training, & Compensation for Global Operations: Putting all pieces together, you get:

KSAOs needed + strategy (global v localization) + stage of internationalization = staffing approaches

Organizational structure control systems: The case of Pat and the soap store: Pat is overwhelmed and overloaded-- what do to?

Makes all of her own soap, owns her own store she purchases ingredients in bulk and makes ecerything in her garage. She markets using air time, social media, etc. she does everything by herself. How to expand: a. utiilize other talents b. get other entities to help (sell through other channels, sign contracts with them to produce- send and collect revenue) downside to this: less control over the product, lose brand exposure, lose margin on it (middleman takes a cut) but the upside: economies of scale- make more and sell more) c. delegate (small business dont usually want to deal with consulting)

Staffing and Managing the global workforce: Expatriate failure how many fail? what are the costs of failure? why is this a problem? Why is expatriation needed?

Many expatriate assignments end in failure (e.g., early return, poor performance, non-completion) indirect and long term impacts: Estimates suggest 20-80% of expatriates "fail" 21% left during assignment; 23% left within a year of returning (GRTS) Cost = up to $1 million per expatriate! Additional costs of expatriate failure: Loss of market share & relationships abroad Loss of self-esteem and confidence for the expatriate Other managers may be less likely to accept overseas posts Given increasing globalization, successful expatriation is needed to be competitive. may not be reaccepted into original country

Organizational structure control systems: HWC strategic motivation and international activities: 1. What were the strategic motivators for HWC to "go global?" Reactive/Defensive? Proactive/Aggressive? 2. What specific international activities are planned by HWC? 3. Discuss the pros and cons of the planned international activities for achieving HWC's strategic objectives

Move was both proactive and reactive, with a little more focus on proactive. Proactive: expand, profit, increase sales-- it was unusual to go into china and on acquisition - makes them at least a leader on par with competition. Reactive: mkt saturation, competition went up 2. the acquisition of 888- gives decision making rights, full ownership, can do what they want. No dispute resolution. 3. Downsides: lack of cultural knowledge doing it all yourself, time consuming, costly, mistakes and money, but acquisition mostly deals with this. Acquisition does keep some knowledge and you are the ultimate boss. Perception of your company: political risks- govt wants to take away or crack down on foreign companies no host country part- lose protection or good will

Organizational structure control systems: Comes from chapter 6, complexity made simple. P&G example: (What gavin and pat became) What they do, their recent changes and plans, etc.

P&G markets approximately 300 brands to nearly five billion consumers in over 140 countries. Among them are Tide detergent, Crest toothpaste, Pantene Pro-V shampoo and Pampers diapers. Sold Crisco and Jif peanutbutter, two profitable brands because they feel that they didnt fit with the consumer product giant's long term business goals. "This decision is another example of the strategic choices we're making to accelerate profitable growth, said CEO Alan G. Lafley. Our game plan remains the same. " They sold to smuckers for 1B in 2001 Have chosen to focus on accelerating the profitable growth of: coffee business, as well as the Pringles snacks and juice businesses." In addition to Pringles, Folgers coffee, and juice brands in a new joint venture with Coca-Cola Co.,

Staffing and Managing the global workforce: Video with Richard West who works for P&G in Hong Kong: Advice for students who are considering whether or not to take an expatriate position? What advantages of being an expatriate does he see for his career? What advantages of being an expatriate does he see for his family?

Perks: run don't walk to the assignment opportunity! Take the assignment! opps on the professional side: - interact with higher level of management and execs than ever -engaging with ppl running major corps.- self made millionaires and billionares -Encourages and inspires you that you can do that too -also contacts and experiences Personal advantageS: kids learn mandarin as 2nd language- meet tons of global kids and ppl from different culturas Advantages: get to talk to higher up ppl than usual, children more exposed to diff cultures and languages

Staffing, Training, & Compensation for Global Operations: Staffing approaches: 2. Polycentric, what it is and its advantages and disadvantages:

Polycentric—foreign subsidiaries treated as distinct entity with some level of decision-making authority - Initially parent-country nationals (PCNs) fill strategic upper-level management positions. -Host country nationals (HCNs) fill middle- and lower-level management positions, eventually training and moving upward to take over for PCNs Start with PCN's with more power and then train HCNs to eventually take over pros: motivation to do well cons: lose hq control These pros and cons are exactly the opposite of ethnocentric

Staffing and Managing the global workforce: Potential negative effects of "virtuality" on effectiveness for cross cultural teams: How can we manage the combined effects of multiculturalism and virtuality? What strategies were effective?

Potential negative effects of "virtuality" on effectiveness Harder to see differences among team members Absence of nonverbal cues Harder to discuss, understand, and overcome about cultural differences

Staffing and Managing the global workforce: Challenges for cross cultural teams potential negative effects: (3 )

Potential negative effects of culture on team process 1 Potential for cultural mishaps and misunderstandings 2. Different language and communication preferences 3. Subgroup formation - lack of identification with team Potential for stereotyping and discrimination Challenges: - dont know people, just know names (virtual not physical) -not meeting with and selecting the right team members

Staffing, Training, & Compensation for Global Operations: Ethnocentric staffing advantages and disadvantages:

Pros: same "cultural color" maintain company control Cons: Limit innovation (have the same KSAO's) #1 barrier between local and parent workers- difficulty adopting, friction between parent and local company- lack of incentivization to host country workers to care #2 lack of adaptation to local

Staffing and Managing the global workforce: Symptoms of culture shock: Psychological Physical

Psych: Anger Anxiety Disappointment Embarrassment Frustration Identity confusion Impatience Physical: Sleeplessness/ Insomnia Stomachaches Headaches Trembling Difficulty breathing Nausea 60% of expats fail!!

Staffing, Training, & Compensation for Global Operations: Staffing approaches: 4. Regiocentric, what it is and advantages and disadvantages REcent trend: Inpatriates:

Regiocentric — done on a regional basis Can produce a specific mix of PCNs, HCNs, and TCNs, according to the needs of the company or the product strategy done on a regional basis- similar in terms of customs, culture, language, regs. (i.e. europe, LA) etc. companies tend to end up here

Staffing and Managing the global workforce: Results of the five personality aspects and how they affect expat success: what is the strongest predictor of expat failure?

Results: Personality and expat performance Extraversion success (+) Agreeableness success (+) Openness to experience success (+) Neuroticism success (-) Strongest predictor: Ethnocentrism is the strongest predictor of expatriate failure

Staffing and Managing the global workforce: Example of training and devel. for expatriates from Japan: what is the recall rate? how selected?

Selection based on long-term knowledge of executives and their families Use of longer assignments (e.g., 5 years) Extensive headquarters support Recall rate is less than 5%- back to japan - japanese culture really speaks to this- company and people seen as family long term plans and longer assignments.

Organizational structure control systems: The Global E-Corporation Network Structure:

Starts as virtual transactions that then move to brick and mortar transactions, like component parts, distributors, contract mfg, transportation, etc. purchasing online like amazon prime

Organizational structure control systems: Global geographic structure:

Starts with board of directors. Nextlevel is Chair, then CEO. Next level are all of the VP's for the different geographic regions and then also the Group VP, which brances down into VP of plastics and VP of agriculture. The VP of europe branches out into more specific locations like the UK and France, and then france branches out into Finance, production, and mkt.

Staffing, Training, & Compensation for Global Operations: Talent pool and shortage of upper level managers: -make up of the talent pool? -Who is competing for it (demand)? -what do poeple in the talent pool seek? Implications?

Supply: host country- if need rep from host country home country- third country - less likely who wants this talent? Demand comes from everywhere- SME's (have less benefits and rougher search), MNC's (larger scale) Point: demand high, supply smaller, high competition What people seek in the talent pool: money (pay raide), assistance in transition, benefits, culture training, want to grow, comm. with HQ and support from them to make sure they arent forgotten, and arragnements for family and kids basically: support and pay raise benefits

Organizational structure control systems: In order to allow for diversification, how pat and gavin chose to structure their company:

The global product (divisional) structure starts with CEO which then goes to the Corporate functional staff and the Area specialists: for north america, LA, europe and the far east. Then it goes to the divisions for product one, two, and three, and then to the divisions for countries A and B. Then finally from country b, the finance production and marketing are all handled.

Staffing, Training, & Compensation for Global Operations: What are the primary objectives for HR?

The primary objectives of Strategic HR Management are to enhance employee, managerial, and organizational effectiveness and performance.

Staffing, Training, & Compensation for Global Operations: KSAOs and why they are needed

To accomplish HR & organizational objectives we must understand and manage Knowledge (what you know) Skills (ex. accting-- certain programs, or computer language, certificates, etc) Abilities (what a person can do, interpersonal abilities, etc) Other characteristics & experiences Consider the impact of international activity on international HR strategies & practices particularly the impact on KSAOs needed for global talent

Staffing and Managing the global workforce: Expatriate training What is the training for? What are the three phases?

Training to prepare employees and their family members for an assignment in a foreign country 3 phases: Preparation - language instruction & orientation to the foreign country's culture & business practices (companies usuall do very well on this- but helpt only to a certain degree) Assignment - combination of formal program & mentoring to understand the foreign country's culture (most effective during training Repatriation (Returning) - providing information about the employee's community & home country workplace

Organizational structure control systems: What does a board of directors do?

What it is: A group of individuals that are elected as, or elected to act as, representatives of the stockholders to establish corporate management related policies and to make decisions on major company issues. The governing body for a company. All major decisions will need to be ratified by the Board oversee managemnt, hold them accountable, rep shareholder interest- should be independent of the company over arching authority - critical and final decisions about strategic issues. note: in this case, there are still many members of the walton family involved. chairman: Rob walton passed to Greg Penner the son in law - want independence. When it comes to executive management, there is a different one for each different division, like walmart stores, inc, walmart us, sams club, etc.

Organizational structure control systems: Step two in the soap business-- Pat met Gavin: who is he and how did he change everything? -New structure

Who: Gavin, who inherited the family business of making and selling candles made with all-natural ingredients. They chose to create a combined business: Divisional product strucure- with general management (Pat and gavin) trickling down into R&D, production, sales, mkt, and finance separate for Soap and candles but sharing sales, mkt, HR, and finance between the two product divisions. Can't really share R&D, not a lot of shared ingredients. Can't share production either because it is different.

Staffing, Training, & Compensation for Global Operations: Why International HRM is vital to implementing global strategy:

a. "... the war for talent will continue to be the major human resource issue to 2020" (PricewaterhouseCooper's 14th annual CEO survey) b. In a highly competitive global economy, where the other factors of production...can increasing be duplicated, "the caliber of the people in an organization will be the only source of sustainable competitive advantage available to U.S. companies." (Laabs, 1996) c. It is the human resource that provides control over other resources. HR is the only sustainable thing because it is almost impossible to replicate (cant clone the people in a company) but can clone the tech and procedures and best practices. HR is getting things done- no matter what, it is the people working there getting things done. So, human resources management is the key.

Staffing, Training, & Compensation for Global Operations: Staffin approaches:

all depends on stage of internationalization as #1, then also need to pay attention #2 to KSAOs, and then finally to the strategy (global or localization)

Staffing, Training, & Compensation for Global Operations: Kelly's assignment in Japan, synopsis and 1. What are the clashes in culture, customs & expectations? 2. Turn back the clock to when Kelly was offered the position in Tokyo. What, if anything, should have been done differently and by whom? 3. You are Kelly. What should you do now? continued examples:

d. lack of cultural knowledge- try to learn to connect with other professionals, hire help to teach you! What did they do within the company? Pay raise and moving expenses for kelly promotion bought her house in boston problems: they didnt help her family and didnt conisder the cost of living, they didnt train her, they didnt check in and werent involved or supportive (only short term suport) What she needed- was support in long and short term- training, prep, onsite training and support, how to culturize person back later and help them continue their career when they return consider all of this before sending people out Why people often fail: they return disatisfied and unhappy the prep and support wasnt enough

prblems with kelly example:

didnt do well as an individual and didnt help either

Staffing, Training, & Compensation for Global Operations: Kelly's assignment in Japan, synopsis and 1. What are the clashes in culture, customs & expectations? 2. Turn back the clock to when Kelly was offered the position in Tokyo. What, if anything, should have been done differently and by whom? 3. You are Kelly. What should you do now?

examples of answers to number one cultural clashes: a. name card-- need to look and read and take with both hands and bow- shows who you are and achievements (its a power distance thing and hierarchy) b. gender problem: don't talk to you, questions you, difficult or impossible to correct singlehandedly solutions: company can help and debrief before hand (asser authority and back woman up) or network with other women and get their support, as well as men on your side c. Abrasive partners: hostile or abrasive- more effort reg there. Need to show genuine adaptation, hold your principles but try to change the status quo (see who was abrasive)

Staffing and Managing the global workforce: Downside of being an expatriate for orgs and individuals:

orgs: 1. Higher costs associated with pay raise, relocation, training, etc. 2. Lack of productivity during adjustment phase (time costs too) 3. The discrepancy between treatment of expatriates and locals may breed hostility Individuals: 1. International experience may not result in promotion upon return 2. Stress for the expatriate and his/her family - Culture shock!

Staffing and Managing the global workforce: Expatriate and the benefits to orgs and individuals:

orgs: 1.Create greater coordination and control between operations 2.Compliance with corporate objectives and policies-- extended arms of HQ- practices and policiesof HQ carried out Individuals: 1. Advancement in the company/development 2. Learning and growth for self and family 3. Opportunity to develop new skills... this is the most important! (see next slide)

Organizational structure control systems: The structure that pat and gavin chose to use when they expanded and started exporting: continued:: pros and cons:

scott manages all the regions pros: can delegate a lot of responsibilities-- frees up vp resources on top to focus on strategic development (in terms of freeing up time for gavin and pat) cons: markets are different and not all marketing will be the same. It is adding another layer of mngment and another division. There is a lot of autonomy given to jeff and scott- they go through a rigorous hiring and recruiting process- when you first go international you give a lot of autonomy to qualified and experienced ppl (after making sure they know what they are doing) If you add the candle business on, you can have some integration in acctg and finance.

Staffing and Managing the global workforce: Managing success and driving success: Predictors of success (3)

stress management tolerance extraversion

Staffing, Training, & Compensation for Global Operations: Kelly's assignment in Japan, synopsis and 1. What are the clashes in culture, customs & expectations? 2. Turn back the clock to when Kelly was offered the position in Tokyo. What, if anything, should have been done differently and by whom? 3. You are Kelly. What should you do now?

synopsis: Kelly asked to go to japan quickly. Goes, hard adjustment, issues with being female, being american, cultural problems, adjustment problems, language problems. 2 days to decide, 3 wks to move. Has a husband and 2 kids who are not happy there 1. gender issues (not taken seriously), abrasive partners (hurts relationship building), knows nothing about japan/tokyo, local, lack of connection to /support from hq need to build trust! examples: a. name card-- need to look and read and take with both hands and bow- shows who you are and achievements (its a power distance thing and hierarchy) b. gender problem: don't talk to you, questions you, difficult or impossible to correct singlehandedly solutions: company can help and debrief before hand (asser authority and back woman up) or network with other women and get their support, as well as men on your side c. Abrasive partners: hostile or abrasive- more effort reg there. Need to show genuine adaptation, hold your principles but try to change the status quo (see who was abrasive)

Organizational structure control systems: Divisional product structure continued-- 3 types of structure typw and the pros and cons of the structure:

three types of structure type: a. geographic region b. product c. teams often two products and each product has its own set of functional practices and some combine. Pros and cons of the divisional product structure: pros: still somewhat specialized cons: product confusion? some things shared and others not hard to decide how to allocate internal resources lots of different products makes it hard to manage the organization because it becomes very complex and big

Staffing and Managing the global workforce: Richard West P&G and Hong Kong Again: How did you prepare for coming to Hong Kong? Any surprises? How did the company help? What did he do on his own? Why was his "surprise" a surprise?

you need culture0-- ask questions- imp: help coaching, walk-thru teach new skills that experts want to learn (seeking knowledge)