International Human Resource Management

International Human Resource Management
Total Marks: 100
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1 Case Study:
WHOM DO YOU SATISFY? EXPATRIATE OR NATIONALS
Hi-Tech Electronics Limited was established in 2006 in Kualalampur, Malaysia. It produces and
markets all types of electronics goods in most of the Asian and Pacific countries. It has been one
among the top five companies as for the level of technology and one among the top three
Companies regarding marketing of the products in Malaysia. The company’s policy and practices
concerning human resource management are top in the country. The company’s salary
administration policies and practices were taken as guidelines not only by the other companies but
Also by various wage boards and pay commissions in the country. But this company has been
struggling a lot because of a minor problem relating to administration of salary and benefits. The
problem is stated hereunder.
The company employed nearly 400 national young graduate and post graduate engineers and 20
expatriate engineers. This employees form the cream of the company’s present human resource.
The expatriate employees occupied higher position in all the departments including Human
Resource Department. The company’s salary policy and benefit policy were formulated mainly on
the basis of the expatriate employee’s desire. The base salary of the company is the same for both
the expatriate and national employees. But expatriate receive additional allowances like
international market allowance, educational allowance, settling-in allowance, car allowance, housing
allowance and entertainment allowance. Thus, expatriate receives nearly 250% more salary than the
nationals doing the same job.
The national employees demanded the management to pay equally with that of expatriates
immediately. According to them, the pocket frustrates them severely.
(a) What is the crucial issue in this case? 10
Answer :
1. Seniors versus juniors.
2. Dissatisfaction among the junior employees.
3. Lower compensation packages (in hand) compared to the industry.
4. Company’s salary policy and benefits policy were formulated on the basis of older employees’
desire.
5. Young employees were not considered by the older employees during the formation of policies.
6. Young employees want their more part of the salaries in cash and less in kind.
(b) If you were the HR manager of the company, whom do you satisfy? 10
Possible Solution 1 :
Solution: Randomly interview young and older employees about the expected composition of
compensation package.
Merits: Deals with the problems directly. It is possible to interview everyone. Best possible solution
can emerge.
Demerits: It is a time consuming exercise. Everyone thinks differently therefore could lead to
confusion. Process itself could be biased.
Possible Solution 2 :
Solution: Study the best practices followed by the competitors and create policies based on those
policies.
Merits: Following the best practices in the industry will put the organization in the league of the
leaders in the industry.
Demerits: Other’s policies may not necessarily work in our organization.
Selection of best solution
•By interviewing the employees they will also feel like participating in the creation of policies. It will
boost employee’s loyalty towards the organization.
•By adopting the competitor’s policies we will be able to compete against the leaders of the
organization.
•Combination of both the above solutions is best as it will deliver creative salary and benefit
structures while following the best practices.
Implementation plan
•Form a interview panel.
•Form a committee to study the best practices followed by competitors.
•Both work simultaneously.
•Forming of the final blueprint of the policies accordingly.
Feedback
•Continuous monitoring of the implemented policy.
•Monitoring of employees performance.
•Monitoring of relations between older and young employees.
•Taking official feedback from employees wherever possible.
Conclusion
The problem in this organisation was of what should be the composition of compensation in cash
and kind for older and young employees, which is solved adopting the combination of two possible
solutions.
Q.2 (a) Explain stages of internationalization of firm and how does each stage affect the HR function?
Answer :
Historically, the first step to internationalization is export. Exporting is the mode of entry that is
characterized by the process of marketing and direct selling of domestically-produced goods in
another country. Exporting is often handled by a foreign agent or distributor. At this stage, the role
of the HR department is unclear. The next step is the establishment of a sales subsidiary that will
replace the foreign agent or distributor. A multinational may be prompted to create a sales
subsidiary if there are problems with foreign agents, is it has more confidence in international
activities, if it desire greater control or if to want to give greater support to exporting activities.
Expatriates may be selected and sent to oversee the operations in the sales subsidiary, thus
requiring the HR department to be involved. During the international division phase, creation of a
separate division in which international activities are grouped is already taking place. The
international division resembles the operation and activities of the domestic organization. Subsidiary
managers report to head of international division. Objectives regarding foreign activities may
determine approach to staffing of key positions. When the subsidiary has reached a bigger size, a
global product/area division may be established. During this stage, the IHRM department is more
active and involved in managing PCNs, TCNs, and HCNs.
The evolutionary stages a firm typically goes through as it grows internationally are exporting,
licensing, subcontracting, use of a sales subsidiary, and foreign production (Figure 2.2: Stages of
International Growth). The higher the stage the more HRM practices need to be adapted to the
various cultural environments. The HRM strategies that are most appropriate from the firm at the
different stages of internationalization are described below:
HRM’s role in firms early exporting
• unclear and limited
• training of the foreign agency
• staffing strategies that focus on the international customers demands
HRM’s role in sales subsidaries
• staffing HCN’s and HR policies for local employees
• staffing PCN’s and expatriation management ( staffing, training, compensation)
HRM’s role in the international division structure ( foreign production)
• expatriate management
• monitoring subsidiary HR function
• communicating corporate values, beliefs and policies (i.e. compensation) and predeparture
training)
• training ( i.e. socialization and pre-departure cultural training)
• facilitating control of subsidiaries
• supervising transfer of management and technical know how
HRM’s role in the global product/area division ( foreign production)
• adapting HRM activities to host countries specific requirements
• local employee decisions made by subsidiaries
• monitoring with less intervening in local affairs
• staffing and development of managers able to operate in international environments becomes

imperative
HRM’s role in matrix structure
• focusing less on structure and more on developing the abilities, behaviour and performance of
individual managers
• staffing (interpersonal skills)
• management development
• HR planning
HRM’s role in the heterarchy structure
• corporate culture and shared awareness of central goals and strategies
• organizational success rests solely on the required human resources: experienced personnel,
rewards and performance management, use of staff as informal control mechanism, knowledge
management
HRM’s role in the transnational structure
• developing global leaders
• staffing transfers
(b) What are main characteristics of the four approaches to international Staffing? 10
Answer :
OR
(b) Explain the strength and weaknesses of workforce diversity with relevant examples. 10
Q.3 (a) Explain career cycle for expatriates and the factors that contribute for expatriate’s success.
10
(b) What are the objectives of international compensation management? 10
OR
Q.3 (a) what are the factors contributing to Expatriate’s Failure? 10

(b) What is global training? Explain in brief different areas of global training and development. 10
Q.4 (a) what is glass-ceiling? Why does it take place for women employees and employees belonging
to minority groups? 10
(b) How domestic HRM does differ from global HRM? 10
OR
Q.4 (a) what are the factors affecting standardization of work practices? 10
(b) What are the significant shifts in HRM practices in recent time? 10
Q.5 (a) what are the challenges of performance appraisal in international human resource
management? 10
(b) In what ways trade union influence the HRM functions of multinationals? 10
OR
Q.5 (a) what is participative management? Discuss the practices of participative management in
different countries. 10
(b) How do you make the performance management in multinationals effective? 10

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Total Marks: 100

1. Attempt all questions.

2. Make suitable assumptions wherever necessary.

3. Figures to the right indicate full marks.

Q.1 Case Study:

WHOM DO YOU SATISFY? EXPATRIATE OR NATIONALS

(a) What is the crucial issue in this case? 10

2. Dissatisfaction among the junior employees.

3. Lower compensation packages (in hand) compared to the industry.

Demerits: Other’s policies may not necessarily work in our organization.

Selection of best solution

•Form a interview panel.

•Form a committee to study the best practices followed by competitors.

•Both work simultaneously.

•Forming of the final blueprint of the policies accordingly.

•Continuous monitoring of the implemented policy.

•Monitoring of employees performance.

•Monitoring of relations between older and young employees.

•Taking official feedback from employees wherever possible.

HRM’s role in firms early exporting

• unclear and limited

• training of the foreign agency

• staffing strategies that focus on the international customers demands

HRM’s role in sales subsidaries

• staffing HCN’s and HR policies for local employees

• staffing PCN’s and expatriation management ( staffing, training, compensation)

HRM’s role in the international division structure ( foreign production)

• monitoring subsidiary HR function

• training ( i.e. socialization and pre-departure cultural training)

• facilitating control of subsidiaries

• supervising transfer of management and technical know how

HRM’s role in the global product/area division ( foreign production)

• adapting HRM activities to host countries specific requirements

• local employee decisions made by subsidiaries

• monitoring with less intervening in local affairs

• staffing and development of managers able to operate in international environments becomes

• staffing (interpersonal skills)

HRM’s role in the heterarchy structure

• corporate culture and shared awareness of central goals and strategies

HRM’s role in the transnational structure

• developing global leaders

(b) What are the objectives of international compensation management? 10

Q.3 (a) what are the factors contributing to Expatriate’s Failure? 10

(b) How domestic HRM does differ from global HRM? 10

(b) How do you make the performance management in multinationals effective? 10

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