Page 9 - DMGT548_GLOBAL_HRM

Global HRM

Notes 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 centralisation of operating decision making.
Compare this to the International strategy, the core competencies are centralised and the
rest are decentralised.

 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.

1.1.2 Expatriates

An expatriate (commonly abbreviated expat) is a person temporarily or permanently residing
in a country and culture other than that of the person's upbringing. The word comes from the
Latin terms ex ("out of") and patria ("country, fatherland").
In its broadest sense, an expatriate is any person living in a different country from where he is
a citizen. In common usage, the term is often used in the context of professionals sent abroad by
their companies, as opposed to locally hired staff. The differentiation found in common usage
usually comes down to socio-economic factors, so skilled professionals working in another
country are described as expatriates, whereas a manual labourer who has moved to another
country to earn more money might be labelled an 'immigrant'. There is no set definition and
usage does vary depending on context and individual preferences and prejudices.
The term 'expatriate' in some countries also has a legal context used for tax purposes. An expatriate
living in a country can receive a favourable tax treatment. In this context a person can only be an
expatriate if they move to a country other than their own to work with the intent of returning to
their home country within a certain period. The number of years can vary per tax jurisdiction,
but 5 years is the most commonly used maximum period. If you are not affected by taxes 3 years
is normally the maximum time spent in one country.

International corporations often have a company-wide policy and coaching system that includes
spouses at an earlier stage in the decision-making process. Not many companies provide any
compensation for loss of income of expatriate spouses, although they often do provide other
benefits and assistance. The level of support differs, ranging from offering a job-hunting course
for spouses at the new location to full service partner support structures, run by volunteering
spouses supported by the organization.
There are several advantages and disadvantages of using expatriate employees to staff
international company subsidiaries. Advantages include, permitting closer control and
coordination of international subsidiaries and providing a broader global perspective.
Disadvantages include high transfer costs, the possibility of encountering local government
restrictions, and possibly creating a problem of adaptability to foreign environments.

HR departments often use services of relocation companies, who assist expats in moving abroad
as well as managing expat's related administrative issues such as: assignment management,
financial management and reporting to name a few.

1.1.3 Types of International Employees

There are three basic sources, the MNCs can tap for overseas positions:
Parent Country Nationals (PCNs): PCNs are managers who are citizens of the country where
the MNC is headquartered. In fact, sometimes the term ‘headquarter’s nationals’ is also used.
These managers are commonly called expatriates or, simply, exports, which refers to those who

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