LECTURE NOTES  
                             
                             
                             
                            ON 
                             
                             
                                                                     
        STRATEGIC HUMAN RESOURCE MANAGEMENT 
                             
                             
                             
                       MBA III semester  
                             
                         (IARE-R16) 
                             
                             
                             
                             
                             
                  Dr. T SRINIVASA RAO 
                         Professor 
                             
                             
        
        
        
        
        
                             
                             
                             
                             
        
        
         MASTER OF BUSINESS ADMINISTRATION 
          INSTITUTE OF AERONAUTICAL ENGINEERING 
                         (Autonomous) 
                     Dundigal, Hyderabad - 500 043 
        
                                                                            UNIT-1 
                                       INTERNATIONAL HUMAN RESOURCE MANAGEMENT 
                    Unit  1:  Introduction,  objectives  an  scope  of  international  human  resource  management, 
                    cultural and reality shock, international human resource management models, concept, pool’s 
                    adaptation of Harvard model, the Brewster and Bournois model, case study, comparative 
                    employment policy , concept, significance, convergence theory, Marxist theory, the cultural 
                    approach  power  distance  (PDI),  uncertainty  avoidance  (UAI),  individuality  (INV), 
                    masculinity  
                     
                    Introduction:  
                     
                              SHRM can be defined as  set of  activities  aimed  managing  organizational  human 
                    resources at international level to achieve organizational objectives and achieve competitive 
                    advantage over competitors at national and international level. SHRM includes typical HRM 
                    functions such as recruitment, selection, training and development, performance appraisal 
                    and  dismissal  done  at  international  level  and  additional  activities  such  as  global 
                    skills management, expatriate management and so on. 
                         In simple terms, SHRM is concerned about managing human resources at Multinational 
                    Companies (MNC) and it involves managing 03 types of employees namely, 
                     
                    1.  Home country employees- Employees belonging to home country of the firm where the 
                         corporate head quarter is situated. 
                          
                    2.  Host country employees- Employees belonging to the nation in which the subsidiary is 
                         situated. 
                     
                    3.  Third country employees- These are the employees who are not from home country/host 
                         country  but  are  employed  at  subsidiary  or  corporate  head quarters.  As  an  example  a 
                         American MNC which has a subsidiary at India may employ a French person as the CEO 
                         to the subsidiary. The Frenchman employed is a third country employee. 
                     
                    Meaning: 
                              The  preliminary  function  of  Strategic  Human  Resource  Management  is  that  the 
                    organization carries a local appeal in the host country despite maintaining an international 
                    feel. To exemplify, any multinational / international company would not like to be called as 
                    local,  however  the  same  wants  a  domestic  touch  in  the  host  country  and  there  lies  the 
                    challenge. 
                         The strategic role of Human resources Management in such a scenario is to ensure that 
                    HRM policies are in tandem with and in support of the firm’s strategy, structure and controls. 
                    Specifically, when we talk of structures and controls the following become worth mentioning 
                    in the context of Global HRM. 
                             Decision Making: There is a certain degree of centralization of operating decision 
                              making.  Compare  this  to  the  International  strategy,  the  core  competencies  are 
                              centralized and the rest are decentralized. 
                             Co-ordination: A  high  degree  of  coordination  is  required  in  wake  of  the  cross 
                              cultural sensitivities. There is in addition also a high need for cultural control. 
                             Integrating Mechanisms: Many integrating mechanisms operate simultaneously. 
                    Objectives: 
                         1.  To create a local appeal without compromising upon the global identity. 
                         2.  To generating awareness of cross cultural sensitivities among managers globally and 
                              hiring of staff across geographic boundaries. 
                         3.  To training upon cultures and sensitivities of the host country. 
                    SHRM and the Staffing Policy: 
                              Here also the role is no different i.e. hiring individuals with requisite skills to do a 
                    particular job. The challenge here is developing tools to promote a corporate culture that is 
                    almost the same everywhere except that the local sensitivities are taken care of. Also, the 
                    deciding upon the top management or key positions gets very tricky. Whether to choose a 
                    local from the host country for a key position or deploy one from the headquarters assumes 
                    importance; and finally whether or not to have a uniform hiring policy globally remains a big 
                    challenge. 
                    Nevertheless an organization can choose to hire according to any of the staffing policies 
                    mentioned below: 
                             Ethnocentric: Here the Key management positions are filled by the parent country 
                              individuals. 
                             Polycentric: In  polycentric  staffing  policy  the  host  country  nationals  manage 
                              subsidiaries  whereas  the  headquarter  positions  are  held  by  the  parent  company 
                              nationals. 
                             Geocentric: In this staffing policy the best and the most competent individuals hold 
                              key positions irrespective of the nationalities.  Geocentric staffing policy it seems is 
                              the best when it comes to SHRM. The human resources are deployed productively 
                              and it also helps build a strong cultural and informal management network. The flip 
                              side is that human resources become a bit expensive when hired on a geocentric basis. 
                              Besides  the  national  immigration  policies  may  limit  implementation.  SHRM 
                              therefore is a very challenging front in HRM. If one is able to strike the right chord in 
                              designing structures and controls, the job is half done. Subsidiaries are held together 
                              by global HRM, different subsidiaries can function operate coherently only when it is 
                              enabled by efficient structures and controls. 
                    CULTURAL AND REALITY SHOCK: 
                              Culture  shock is  an  experience  a  person  may  have  when  one  moves  to  a  cultural 
                    environment which is different from one's own; it is also the personal disorientation a person 
                    may feel when experiencing an unfamiliar way of life due to immigration or a visit to a new 
                    country,  a  move  between  social  environments,  or  simply  transition  to  another  type  of 
                    life. One  of  the  most  common  causes  of  culture  shock  involves  individuals  in  a  foreign 
                    environment. Culture shock can be described as consisting of at least one of four distinct 
                    phases: honeymoon,             negotiation,       adjustment,       and      adaptation.       Common  problems 
                    include: information  overload, language  barrier, generation  gap, technology  gap,  skill 
                    interdependence,           formulation        dependency, homesickness (cultural),                  infinite      regress 
                    (homesickness), boredom (job dependency), response ability (cultural skill set). There is no 
                    true  way  to  entirely  prevent  culture  shock,  as  individuals  in  any  society  are  personally 
                    affected by cultural contrasts differently. 
                               
                     
                     
                     
                    There are three basic outcomes of the adjustment phase:  
                     
                        Some people find it impossible to accept the foreign culture and to integrate. They isolate 
                         themselves from the host country's environment, which they come to perceive as hostile, 
                         withdraw into a "ghetto" and see return to their own culture as the only way out. These 
                         "Rejecters" also have the greatest problems re-integrating back home after return.  
                        Some people integrate fully and take on all parts of the host culture while losing their 
                         original identity. This is called cultural assimilation. They normally remain in the host 
                         country  forever.  This  group  is  sometimes  known  as  "Adopters"  and  describes 
                         approximately 10% of expatriates. 
                        Some people manage to adapt to the aspects of the host culture they see as positive, while 
                         keeping some of their own and creating their unique blend. They have no major problems 
                         returning  home  or  relocating  elsewhere.  This  group  can  be  thought  to  be 
                         somewhat cosmopolitan.  Approximately  30%  of  expats  belong  to  this  group.  Culture 
                         shock has many different effects, time spans, and degrees of severity. Many people are 
                         handicapped by its presence and do not recognize what is bothering them. 
                    REALITY SHOCK: 
                     
                    Definition: 
                               
                              “Unsetting  or  jarring  experience  resulting  from  wide  disparity  between  what  was 
                    expected and what the real situation turns out to be, such as the first day on a new job” 
                     
                    For example: New Graduate Nurses enter their first job as a Professional Nurse eager to 
                    being their new role!  Many New Grads will orient to their new role with ease while some 
                    will struggle.  New Grads work with Nurse Preceptors to smooth the transition from Student 
                    Nurse to Professional Nurse.  In the beginning of this transition, excitement takes over as the 
                    New  Grad  meets  new  colleagues  and  accepts  new  challenges.    It  is  natural  to  feel 
                    overwhelmed and disillusioned as a New Grad.  These feelings typically start about 6 months 
                    to  a  year  after  getting  off  of  orientation  when  the  New  Grad  realizes  the  healthcare 
                    environment is flawed. 
                     
                    Here are the three stages of reality shock: 
                     
                    The shock stages:1 
                     
                              New  Grads  begin  to  recognize  there  are  flaws  in  the  system.   They  may  encounter 
                    discrepancies and inconsistencies in the work environment.  Moreover, the New Grad may 
                    begin to discover concerns with the practices of other nurses.   
                     
                    A few examples of these discrepancies and inconsistencies are: 
                     
                             Discovering  their  Preceptor  does  not  know  everything  or  follow  policies  
                              realizing they do not have the tools and equipment to do their job. 
                             Experiencing communication breakdowns 
                             Identifying poor professional behaviors in their fellow nurses 
                             Having  felt  humiliated  by  a  physician,  bullied  by  a  nurse,  or  embarrassed  by  a 
                              colleague.