Page 251 - DMGT548_GLOBAL_HRM

Global HRM

Notes When managers sign on with these companies, they know from the start that overseas assignments
are part of the deal if they wish to climb high on the corporate ladder. These multinational
companies manage their HR talent through international databases that, within hours, can
provide a choice of Grade-A in-house candidates for any assignment. Even allowing for company
size, few United States-based multinationals come close to matching the bench strength of a
Unilever or Nestlé. The Japanese multinationals are even farther behind.
By adopting the strategies mentioned below, a company should be able to put into place an
effective global human resources program within three to four years.
1. Break all the “local national” glass ceilings: The first, and perhaps most fundamental, step
toward building a global HR program is to end all favouritism toward managers who are
nationals of the country in which the company is based. Companies tend to consider
nationals of their headquarters country as potential expatriates and to regard everyone
else as “local nationals.” But in today’s global markets, such “us-versus-them” distinctions
can put companies at a clear disadvantage, and there are strong reasons to discard them:
 Ethnocentric companies tend to be xenophobic — they put the most confidence in
nationals of their headquarters country. This is why more nationals get the juicy
assignments, climb the ranks and wind up sitting on the board — and why the
company ends up with a skewed perception of the world. Relatively few
multinational companies have more than token representation on their boards.
A.B.B. is one company that recognises the danger and now considers it a priority to
move more executives from emerging countries in Eastern Europe and Asia into the
higher levels of the company.

 Big distinctions can be found between expatriate and local national pay, benefits
and bonuses, and these differences send loud signals to the brightest local nationals
to learn as much as they can and move on.
 Less effort is put into recruiting top-notch young people in overseas markets than in
the headquarters country. This leaves fast-growing developing markets with shallow
bench strength.
 Insufficient attention and budget are devoted to assessing, training and developing
the careers of valuable local nationals already on the company payroll.
Conventional wisdom has defined a lot of the pros and cons of using expatriates versus
local nationals. But in an increasingly global environment, cultural sensitivity and
cumulative skills are what count. And these come with an individual, not a nationality.

Notes All employees are local nationals of at least one country, but often they can claim a
connection with several. More frequent international travel, population mobility and
cross-border university education are increasing the pool of available hybrid local nationals.
Every country-connection a person has is a potential advantage for the individual and the
company. So it is in a multinational company’s interests to expand the definition of the
term “local national” rather than restrict it.
2. Trace your lifeline: Based on your company’s business strategy, identify the activities that
are essential to achieving success around the world and specify the positions that hold
responsibility for performing them. These positions represent the “lifeline” of your
company. Typically, they account for about ten percent of management.

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