Deck 16: Global Human Resource Management

Question 1

What are the strengths of Lenovo's staffing policy? Can you see any potential weaknesses, or problems, that the company might encounter as a result of this policy?

Answer 1

Many students may suggest that the potential for clashes between managers from the United States and managers from China could create challenges for Lenovo as it tries to mesh two very different cultures.  While the company's new senior management team is evenly divided between managers from the United States and managers from China, some students may wonder whether the U.S. managers, who are accustomed to working in an organization with a corporate culture that has a legendary reputation, could act in an ethnocentric manner toward their new Chinese counterparts.  This could cause resentment among Chinese managers who may already feel displaced by the new corporate language and headquarters location.   Other students however, may applaud Lenovo's approach to its new organization, and suggest that the company is clearly cognizant of the need to have leadership from the more experienced U.S. management team, while at the same time, incorporate a strong presence from China.

Question 2

What is the link between an international business's strategy and its human resource management policies, particularly with regard to the use of expatriate employees and their pay scale?

Answer 2

In firms pursuing a localization strategy, a polycentric staffing approach is most common and there are relatively few expatriates or the associated pay issues.  Expatriates are more common in firms with international strategies, and when an ethnocentric staffing approach is utilized.  In this situation the pay is often based on home country levels, with adjustments as required for differing living costs and taxes as outlined by the balance sheet approach.  Firms pursuing global or transnational strategies most often use a geocentric approach to staffing, where the best individuals (regardless of nationality) are chosen fill positions in any country.  Here the pay issues for expatiates can become particularly complex, as allowances must be made for home country norms, host country costs and expectations, and global norms across the company.

Question 3

If Lenovo is to become a truly global enterprise, what should the HRM function do to enable the company to attain this goal?

Answer 3

The HRM function could be instrumental in bringing together the IBM and Lenovo management teams.  It will be critical that the two teams mesh in terms of the goals for the firm, and the strategy that will be used to attain those goals. The HRM should facilitate the process by reinforcing the desired corporate culture, ensuring that the most qualified individuals fill appropriate positions, and helping individuals form very different national cultures find common ground and develop a strong working relationship.

Question 4

In what ways can organized labor constrain the strategic choices of an international business? How can an international business limit these constraints?

Question 5

Reread the Management Focus on McDonald's global compensation practices. How does McDonald's approach help the company to take local differences into account when reviewing the performance of different country managers and awarding bonus pay?

Question 6

What is the staffing policy that Lenovo is pursuing?

Question 7

What are the main advantages and disadvantages of the ethnocentric, polycentric, and geocentric approaches to staffing policy? When is each approach appropriate?

Question 8

Use the globalEDGE Resource Desk (http://globalEDGE.msu.edu/resourcedesk/) to complete the following exercises:
The U.S. Department of State prepares quarterly reports for living costs abroad to compensate civilian employees working for the U.S. government at various posts worldwide. Using the most current report, identify the posts that are regarded as having a high cost of living as well as those that are perceived as risky (those receiving a danger pay allowance). What are the living allowances determined by the U.S. Department of State for each post?

Question 9

What strategy do you think the company is pursuing? Does its staffing policy match its strategy?

Question 10

Research suggests that many expatriate employees encounter problems that limit both their effectiveness in a foreign posting and their contribution to the company when they return home. What are the main causes and consequences of these problems, and how might a firm reduce the occurrence of such problems?

Question 11

Use the globalEDGE Resource Desk (http://globalEDGE.msu.edu/resourcedesk/) to complete the following exercises:
You work in the human resources department at the headquarters of a multinational corporation. Your company is about to send several American managers to New Zealand as expatriates. Utilize resources available on the globalEDGE Web site regarding working internationally to examine the income tax rates in New Zealand.