Table of Contents INTRODUCTION 2 RECRUITMENT AND HIRING 5 EMPLOYEE RELATIONS 10 BENEFITS 20 VIRTUAL BUSINESS 23 LOGISTICS 27 CONCLUSION 32 BIBLIOGRAPHY 35 Introduction Germany, France, Norway, Asia, Africa, what do all these places have in common? They are all places where companies are doing business today. Technological innovations have created a new global marketplace at our fingertips. Even though they are accessible does not mean that we can automatically go out there and start doing business. We need to understand the issues facing International Human Resource professionals in today’s business world.
Welcome ladies and gentleman. My team members and I are honored to be here today to discuss the latest issues in International Human Resource Management. Our group members are a diverse group of people from differing backgrounds and experience. Most of us are from the United States however we do have one member who is from Asia.
We have compiled some interesting information that I am sure you will find informative and useful in your international endeavors. The majority of our focus will be on the employee. As human resource professionals, we are passionate about the employee aspects of a company “going global.” With so many aspects to international human resources, today we will provide you with an overview of the issues facing the International Human Resource manager. Every company has assets; buildings, products, bank accounts. The greatest assets a company possesses are its employees. Many companies look at employees as expenses.
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There is a considerable cost associated with employees in the amount of money in payroll costs and benefits. If managed correctly, employees can recover that cost for the organization. Jack Welch, former CEO of General Electric was an innovator in the world of management. He certainly has his own style of management.
Employees were not always on the positive side of his approach, but he got everything he could out of his employees and they are grateful to him for what they have received. To quote Mr. Welch “The biggest change we made, without question, was the move to a boundary less company. We got rid of the corner offices, the bureaucracy, the ‘not-invented-here’s yndrome.
Instead, we got every mind in the game, got the best out of all our people.” This is extremely important in international human resources – to get the best out of your people should be the goal of all organizations, international or otherwise. The topics we have selected address current trends in international business, but most of all incorporate some employee issues that face international businesses. The business world is growing more and more global every day. Any company that does not see this and change their strategy to incorporate international business will be left behind. Early change is imperative to success. Jack Welch says “Change before you have to.” This short but poignant statement says it all.
We are in an ever-changing world of increasing technological advances and increased communication. The world is getting smaller and smaller as we are able to reach into new and uncharted territories previously unavailable to us. Our employees will be the key to unlocking these secret places and untapped marketplaces. Understanding the challenges and issues facing today’s international businessperson is imperative to success in the global business world. Our speech today will run the gamut of international business concerns from the logistics of getting your product to global markets to doing business in a virtual environment and employee relations and human resources issues.
... things will ensure you get the respect of you employees. Running a business is a lot harder then it seems. There are ... that you have the proper method?' Set a deadline for change and check up on the progress, offering help where needed ... . 9. DON'T pick the business your dad (or spouse) likes best. Each person in the world has different skills, needs, and ...
Ladies and gentlemen, I present to you the Age of Global Virtual Business. Recruitment and Hiring The website web has 3, 083, 324, 652 web pages. If one types in the word “job,” one gets 58, 300, 000 web pages. And when one types “Recruitment and Hiring,” 463, 000 web pages are at the tip of the fingers. These figures stand out as overwhelming and just the thought of finding a needle in this haystack is staggering. Yet no part in the history of human civilization has information been so widely distributed and accessed, than in the present period of virtual business.
The last decade has seen so much technological progress. We have come from simple word processors like Word Star to the sleek features of Word for WINDOWS. The personal computer is no longer restrained by wires and plugs with the new Intel Centrino. (Intel) At the palm of our hands we have handheld computers and cellular phones that give us information wherever we are on the face of this globe. What other challenges does the future bring? In the aftermath of rapid change what can job hunters do? What do they face in the new millennium? Our company sees a vision, and here we present the historical basis for that vision. In 1965, then-Intel Chairman Gordon Moore forwarded a law that is today’s governing pace for technological introduction and innovation.
And if you would allow me to quote Intel: “Moore observed an exponential growth in the number of transistors per integrated circuit and predicted that this trend would continue. Through Intel’s relentless technology advances, Moore’s Law, the doubling of transistors every couple of years, has been maintained, and still holds true today. Intel expects that it will continue at least through the end of this decade. The mission of Intel’s technology development team is to continue to break down barriers to Moore’s Law.” (Intel) Such a phenomenon is truly amazing for each and every day we see new gadgets and gizmos that boggle the imagination.
In the midst of globalization this is an inevitable trend where dreams are created and realized, and that dream is presented here. Our company sees a future based on the same principle of Moore’s Law, but this time applied to the creation of jobs, recruitment of personnel, and the hiring of talent. We see a future where change is so rapid that constant education is part of any job, where intellectual enrichment are not limited to masters degrees or doctorate degrees, but professional advancement that rivals the shift and innovation of technology. Let me give you one particular example.
... my main objective will be as efficient and professional as possible. Also I have to be creative ... candidate is by using job posting to notify all employees in the company that the job is available. I will ... groups. I will also comply with the EEO law employee requirement. I will give the same opportunity ... groups. I will also comply with the EEO law employee requirement. I will give the same opportunity ...
Presently, the Philippines has dispatched more than 10 million people as overseas contract workers (even though the national government only recognizes six million), and they are located in the remotest places in Nigeria, the coldest places in Canada, professional corporations in New York, and in the socially responsible reconstruction of Afghanistan and Iraq. They are described as the “first” global workforce. These people pump an estimated US $7 to $8 billion annually into the local economy. (poe a) They speak English very well, most are highly educated, but tend to concentrate on service-oriented professions. By taking both the principles of Moore’s Law and the work force phenomenon in the Philippines, probably including the United States, we submit the vision that in the next decade professionals will be judged by the academic or educational attainment found in the combination of technology and higher education, that is, for lack of a better term, “constantly renewable.” Let me define this seeming redundancy.
We use the word “CONSTANTLY” because we believe the next generations of professionals have a ceaseless desire to pursue progress and development. “CONSTANTLY” because intellectual enhancement is proportionate to professional advancement. “RENEWABLE” because constant shifts in professional specialization can render job definitions obsolete in a few years, by the introduction of technology and competitive advantage. “RENEWABLE” because information is not limited by political restraints or hindered by geographical boundaries. Education is accessed when, where, and how it is needed for a specific job. After which other means or sources of information are gathered, collated and utilized to render past educational achievements as mere stepping-stones rather than career accomplishments.
... that health and safety regulations can always be kept to. The employees also have many roles in the workplace to help keep ... between the employers and employees . The regulations involves looking into the different aspects of the workplace and evaluating how ... abides by specific health and safety laws to ensure that not employee is harmed within the workplace. Firstly most organisations would ...
And we see this beginning in MNCs or trans-national corporations that fund and support academic institutions for research and development. We see this in schools that operate more like profit-oriented corporations, and we see this in the rise of MBA enrollment around the world. (bizjournals) We see this dream as inevitable and unavoidable. And we invite you to realize these changes for your advantage, for further productivity and maximized profitability. Our company believes that we should not have a monopoly to this vision.
We invite you to learn from what we present to make our parts in the global economy more competitive for the long term. So, the next big question is how does one find the best applicant? How do we go about looking for the right man or woman, as the case may be, and separate the husk from the rice, the gold from the ore, the talent from the raw, unbridled potential? We don’t. We let them come to us. We aspire to help create a new generation, a new industrial society, if you will let me use that term, geared towards a “Constantly Renewable” global educational system. Our present theories on professional recruitment and hiring goes back far earlier to any applicant or would-be professional’s background. By looking at both upbringing and the genes, nature and nurture, we hope to select the best candidates for any job.
The recent sequencing of the human gene by Human Genome Project has given us an edge in pre-selecting candidates. (NCBI) Our company believes that there exists within all of us a “Capitalist Gene” that allows for some to be more entrepreneurial or successful in business, and for most expect a paycheck every week. We believe that the best business minded professionals have inherited the traits of success and leadership, nurtured at a young age, harbored in the adolescent and early adult stage, and professionally practiced in jobs and careers. In the end, recruitment and hiring are no longer limited to the mundane tasks and corporate gambles of interviews, unscientific and arbitrary elimination processes, or nepotism and connections. It will rely upon a scientifically and biologically explainable and predictable process that maximizes profit, by selecting the best possible candidate.
... industries, the employees are members of trade unions which regulate the way in which organizations hire, fire and deal with employees including workplace conditions and ... well as adding to the growth of the country as a whole. The employees of a company are the only assets which ...
Moore’s Law applies to the selection of the species, considering both technology and biology. This is our company’s dream. We invite you to dream with us. And once we find and hire this perfect candidate, what comes next? Employee Relations Employees of companies across the globe are working hard for their employers.
They are the backbone of the organization and without them the company would be non-existent. I think we can all agree that the human resources of an organization are their greatest assets. The relationship between employee and employer is one of give and take. The employees give the organizations their time, skills and knowledge and the employers give them a paycheck and a place to grow and learn.
It is important then that the relations between the organization and its people be a strong, supportive and respectful one. Employers in every country are concerned with the safety of their employees while on the job. Unfortunately, their concern is not enough and is not widespread. Regulations are needed to insure the safety of every employee. Although regulations are sometimes viewed by organizations as a necessary evil and a cost of doing business, it is much cheaper to keep employees safe. Workplace injuries cost companies more than the cost of taking care of the employee.
There are soft costs associated as well that can eat away at profits and reduce the competitive advantage in the global market. Lost production, lost wages, employee morale, and other underlying costs of injuries can be extremely costly. Having a viable safety program and adhering to regulations can save these costs drastically. In my opinion, keeping employees safe is an easy way to increase profits.
In the United States, the Occupational Safety and Health Administration (OSHA) governs employer practices relative to workplace safety. “OSHA’s mission is to insure safe and healthy workplaces in America. Since the agency was created in 1971, workplace fatalities have been cut in half and occupational injury and illness rates have declined 40 percent. At the same time, U. S. employment has doubled from 56 million workers at 3.
5 million work sites to 111 million workers at 7 million sites.” (OSHA).
This clearly shows the impact that regulation has on the safety of workers. It does not show the cost savings, but I can assure you that it is significant. In the following chart, it is clear that OSHA is a necessary function for the safety of all American workers. This chart depicts the fact that companies do not do all they can for the safety of their employees as well as the costs of not providing a safe work environment. This information was gathered from OSHA.
... of managers and unions in British organizations. The European Law making process attempts to encourage the employees to have a ... apprenticeship schemes for youth as to balance out the country’s economy, placing as many qualified youths as possible ... they operate in views of equal opportunity, employee development and health and safety. Attitude surveys are conducted through planned questionnaires, ...
com. Federal Inspections – Fiscal Year 2002 37, 493 Inspections Number Percent Reason for Inspection 9, 007 24% Complaint / accident related 20, 511 55% High hazard targeted 7, 975 21% Referrals, follow-ups, etc. Number Percent Industry Sector 21, 347 57% Construction 8, 270 22% Manufacturing 7, 876 21% Other industries In the inspections categorized above, OSHA identified the following violations: Violations Percent Type Current Penalties 416 0. 50% Willful $11, 799, 539 54, 842 70% Serious 48, 312, 043 1, 969 2. 50% Repeat 7, 710, 736 231 0. 30% Failure to Abate 597, 301 20, 749 26% Other 2, 145, 151 226 0.
30% Unclassified 2, 268, 508 78, 433 TOTAL $72, 827, 278 Other countries across the globe have similar agencies or regulations that insure the safety of workers. Shanghai, China for example has been involved recently in improving their workplace safety rules. In 2001 there were 349 fatalities from workplace accidents. This number is the highest number in the past 4 years. (China) The need for additional regulations is evident.
There is also a push to establish a regulatory agency, such as OSHA to oversee workplace safety issues. Since the establishment of the European Union, the approach from these communities was to develop a standardized approach to workplace safety for all countries as opposed to each country dealing with these issues alone. This brings strength and resources that each individual country may not have. The regulations of the European Union in regards to workplace safety are similar to the United States. In a speech at the EU-US Conference on Health and Safety at work John B.
Richardson, Deputy Head Delegation of the European Commission to the United States stated, “Philosophically speaking, the European approach to these health and safety issues rests on the fundamental concept of a social market economy. We believe that the improvement of the work environment goes hand in hand with the development of a market economy.” (Richardson).
The European Union is intent on making the workplace safer for millions of employees in those countries. You might be asking yourself “Why do I care about workplace safety in other countries?” Anyone doing business in the international marketplace needs to be concerned with these issues. Understanding the regulations and laws of other countries should be a priority before setting foot in those lands to set up business. Like any other aspect of business, there are rules, regulations and customs that need to be followed to be successful and gain competitive advantage in an international business setting.
Not understanding and not following the regulations can be detrimental to the overall organization. In the case of workplace injuries, it is a moral issue as well to keep your employees as safe as possible and return them to their families the way the left. Workplace safety is something as you have seen that differs from country to country. Labor and employee relations are also handled differently in every country.
It is about as diverse as the people that share the globe. The vast differences from country to country are seen when one starts to compare different countries. The culture and customs of those countries are represented in the way labor and employee relations are carried out. Germany, for instance, has a very rigidly controlled labor system.
Legal processes regulate it and the majority of employees are employed via an employment contract or Union contract. During a recent interview with Paul Colangelo, Human Resources Director of a leading pharmaceutical’s company whose parent company resides in Frankfurt, Germany, I learned that the German people as a whole are much more rigid and focused on the task as hand. Mr. Colangelo indicated, “The way they work is different from the US. They keep to themselves, there is not a lot of chitchat in the hallways, and everybody sits down at their desk and basically focuses and works (Colangelo).” Japan on the other hand has less rigidity and less labor union affiliations. The attitude in Japan towards labor unions is resisted in favor of staff associations and single union representation (hrmguide).
A survey performed by the Japan Institute of Labor in 1993 of 1, 250 private companies within a 50-mile radius of Tokyo Station found that only 29 percent of the organizations that replied had organized labor unions most of which employed over 1000 workers. 60% of the organizations that did not have unions had some sort of in-house representation for labor and employee relation issues. (hrmguide) Japan is, however unifying their labor unions to build strength and recruit new members. This recent change in the approach to labor unions has been on the heels of recent decline in membership and strength of Unions. As of June 1997, Japan’s unionization rate has dropped to 22. 6 percent and it continues to fall (hrmguide).
Unions see the writing on the wall. They cannot afford to sit still and let the continued down slide occur. Merging unions work similar to merging companies. It builds strength and market share.
Increasing your market share of employees can help to bring new members to the table. The trend of unification of labor unions is building across the globe. In the US, there are advances in mergers of labor unions for the same reason as Japan. The enrollment in America’s labor unions is diminishing. We have our fair share of them, but the majority of Americans do not work under an employment contract nor are they affiliated with a union. Employment contracts are held primarily to corporate officers of organizations.
The average worker is employed under the employment at will doctrine. This is not the case in other countries. Employee relations go beyond employment contracts and union representation. Employees and employers need to have good relations in order to gain competitive advantage that is sought by all organizations. As discussed with workplace safety, there needs to be a feeling from the workers that they are valued as individuals and as part of the organization.
Without this type of relationship, employees will do what is necessary to earn a paycheck and nothing more. The whole basis behind employee contracts and unions was to protect employees and provide them with proper pay, a safe working environment and respect from their employers. Employers should want to provide these things to their employees because happy employees are productive employees. Organizations are conducting more and more business in the global marketplace. Companies continue to grow and expand in other countries.
Employee relations have a critical role in the success of an organization in international markets. In order to market and sell their products, facilitate mergers and acquisitions, or develop employees in these new markets it will take people from the host country to assist in these regards. Expatriate assignments are a growing aspect of international business. Employees are relocated in the foreign land to perform essential functions of the business abroad. These assignments can last anywhere from a few weeks to several years.
One of the most daunting tasks in this new endeavor is training and preparing expatriates for their assignments in foreign countries. There are many agencies out there that provide cross-cultural training to employees. Whatever country you are doing business in, there is training out there. You may be thinking “What is the big deal, people travel to foreign countries every day and do not need any special training to go to France or Germany.” While this may be true, the fact of the matter is this is not a vacation and the employees are not there for a week or so. They are transplanted and make this foreign country home for an extended period of time.
Most often, their families go with them. This is another challenge facing employees venturing into ex patriotism. Long-term (2-5 years) assignments can be a stressful endeavor for employees facing these assignments if not properly prepared. Training is vital to the success of the assignment. Yet, 70% of United States expatriates and 90% of their families are sent overseas without any cross-cultural training (Mendenhall, p. 443).” This number is staggering when you think about the planning, training and goal setting that goes on in business today.
Would a business venture into a new market place without doing some research first? If they want to be successful, they don’t. Why then do companies overlook the necessity of training expatriates and their families on the vast differences between countries, cultures and customs as well as the assignment itself? The answer to this is not easily found. Most companies do not see the return on investment of training of expatriates. Training is not the only portion of the expatriate assignment that goes undone. Goal setting is another area the companies just do not see the importance of. I find this ironic because everything an organization sets forth to do is run by the overall goals of the company.
Without a goal, how can one accurately assess the success of the assignment? A recent survey performed resulted in the following: . 33. 5% of respondents say their organization always sets measurable goals… 22. 5 % set measurable goals 75% of the time… 31 % set measurable goals 50% of the time…
13% never set goals for expatriate assignments. (Webusers) These numbers show that there really is no importance or consistency for goal setting in expatriate assignments. Training and goal setting are two important aspects to be looked at when managing expatriate assignments. Other areas are just as important, if not more. Proper selection of candidates and repatriation are two key factors in expatriate assignments. Candidate selection should be an involved process.
A person with the skill level and technical expertise to perform the job needed overseas is not always the best candidate for an international endeavor. Great care should be taken in considering who should be the one to accept the assignment. Not only should the employee be interviewed and screened for the assignment, but his or her family should be as well. I said earlier that 90% of families are sent abroad without any cross-cultural training. The number one reason for failed expatriate assignments is due to family issues (webusers).
This could easily be fixed with training and proper selection.
It is unfortunate that so many organizations do not see the need for proper selection and training. It could mean the difference between success and failure. One of my biggest concerns in the area of expatriate assignments is in the repatriation of employees. Again, planning the return before one leaves for overseas is imperative. Many repatriated employees following a successful expatriate assignment come home with no job to return to or a job that is not what they expected. Most of the time, no upfront planning is done prior to the assignment.
Another issue with repatriated employees is reverse culture shock. When employees return from several years in a foreign country, they can experience this phenomenon. It is very common especially if the employee adapted well to the new culture. They have learned a new way of living and now need to learn their old way of living again. These two issues combined is one of the leading reasons repatriated employees leave their companies. I have discussed several diverse areas of employee relations.
As you can see, whether it is with labor relations, workers’s safety or expatriate assignments, the theme remains the same. Employees need to be treated with respect. A respected employee will perform for the organization in more ways than production. Employees that are revered by management tend to work harder and smarter and provide more for the organization.
Companies need to look at the big picture. Putting some time, energy, money and resources into your employees can have a lasting positive impact that will bring returns greater than the cost of putting these things in place. The Internet can be used to bring people and countries closer together, as well as employee and employer. The greatest asset of an organization is its human resources. It is about time organizations across the board start treating them as such. Benefits Now let’s discuss the inevitable: Employee Benefits.
Most employers have to give some kind of benefits. This helps lure and keep employees. And, of course, employees look for the best benefits. Well, for expatriates, we as businesses, have to think outside those ‘basic’ benefits. Basic Benefits We are going to go over some of the suggested benefits for expatriates. First we would like to mention that there are several vendors that can handle almost all your benefits needs.
A couple of them are: POLAK International HR Consultants and Cendant Mobility. Most vendors can be found by searching the Internet. If you are interested in the two mentioned, please see me after the completion of this presentation. Compensation is one of the more important aspects of benefits; especially for the employee. For expatriates, we need to take certain factors in to consideration. Such as: that country’s cost of living, taxation, relocation costs, housing, etc.
What should the ceiling on an accommodation allowance be? Should you pay utilities, furnishings, telephone calls? Does the location require domestic staff or secure accommodation/ security guards? Is it usual for an employee to receive a company car? Can children attend state schools or will they need private education? If the family is remaining home, how many visits should they get? What home leave and travel arrangements should be implemented? What are the arrangements for compassionate leave ‘R&R’ if in a difficult location? (eca) These are just some of the questions you need to think about. What we have found, through our research, is that most company’s expatriates maintain their base pay. In addition to their base pay, they receive assignment-based allowances. The allowances are determined by the factors previously stated. There are a couple of other approaches as well. They are: The Home Approach and The Host Approach (eca).
The home approach means taking the assignee’s home salary and splitting it for the various factors. Then adding an allowance if there is a difference (eca).
The host approach means paying the host country market rate for a particular assignee’s job (eca).
A bonus would be to develop global reward structures (polak).
Another item is leave time. In most cases the expatriates receive the same leave time as those in the United States offices including the Family Medical Leave Act. In addition to the ‘basic’ leave package, we may need to consider home leave and / or emergency leave (cendant & Lockheed).
It is derived on the same basis as the military leave.
You also must consider leave pay for mandatory holidays for that particular country. A business cannot go against any of the country’s governmental and / or cultural policies. Now for health and dental benefits. Again, most expatriates maintain their home office health and / or dental insurance. Unfortunately, this insurance is no good to an expatriate on assignment except for reimbursement purposes. There are a few health plans out there that work internationally.
Two of them are AIG International (cendant) and CIGNA has an International Indemnity Plan (Lockheed).
See handout number 1 in your packets. Depending on the location and type of membership, coverage may also include political evacuation protection and kidnap and ransom protection (cendant).
If any of you ever traveled without your family, you probably felt homesick and missed them. Well, expatriates feel this at times, too.
If their family travels with them, then the family gets homesick, too. Because of issues like that, we can offer an International Employee Assistance Program with 24/7 access (cendant).
Counseling for the expatriate and / or the family may be offered as well as family care (polak).
Some companies offer spousal job assistance. A variety of other benefits are: relocation services, housing assistance, schools, etc.
The final topic in this benefits section is training benefits. Training benefits both the company and the expatriate. There are many different areas of training, including language skills, home country training, local training, and culture training (mueller’s).
We will discuss just the language and culture training. First, we feel strongly on mentioning that there should be an orientation session with handouts for every expatriate assignment. Even an experienced expatriate needs to brush up on each assignment.
This orientation could save the company costly mistakes. It could also be extended to the family of the expatriate whether they are going or not. Language training in most assignments is necessary. Especially the basics; such as: hello and goodbye, bathroom facilities, directions, help, etc. Language training is integral to success in the international setting (cendant).
The expatriate needs function-specific language skills as well.
Don’t you think these language skills are necessary? Culture training is very important for the expatriate to get along in the other country. An idea would be to create culture fact sheets to give during orientations. The expatriate needs to build intercultural awareness (cendant) by understanding the country’s culture. The Internet can be used to build this awareness and will help the expatriate perform effectively for the assignment. And what about etiquette? Can you imagine doing something that was improper for that country and getting thrown out of somewhere? We don’t want this to happen to our expatriates; do we? Virtual Business On 10 October 1851, in a small office in London’s Royal Exchange, Julius Reuter founded the news agency that still bears his name. He also founded, although he probably did not know it at the time, the world’s first knowledge based enterprise and the world’s first virtual business organization.
(Witzel) The idea that information and knowledge were commodities that could be bought and sold was well established by the nineteenth century; but never before had anyone set up an international business solely for this purpose. Reuter realized that the telegraph, the new information technology of the day, could be used to transmit information quickly, reliably and accurately across Europe and around the world – and, more importantly, that a profitable business could be built in doing so. (Witzel) Since then we have moved past the age of telegraph, telephone, television and into the information exchange of the World Wide Web (WWW).
With this global connectivity a company can easily communicate with any part of the world instantly.
It can be done through the use of electronic mail (e-mail), streaming video and even live conferencing. The WWW has the capability to carry video and audio information to allow messages to be sent and received in real time thus eliminating travel. Sophisticated software is coming of age that will even translate documents to different languages and will soon work on audio. These advances in technology will remove more barriers that inhibit global expansion. With these advancements, what are some of the issues that a Human Resource manager will face with this technological boom? What would be some of the advantages? These and other questions will be addressed in this paper as well as avenues of exploration as we enter the Age of Virtual Business. In this new age of technology, IHRM managers need to use the tools available to be able to utilize the resource of employees on a global scale.
This task can be overwhelming if it needed to be performed by letter or by phone. However, with the Internet, e-mail, video and audio, the task of employee management is made much easier and is done much quicker. Over the last 8 years you can see how the number of Hosts, or computers, connected to the Internet has grown exponentially. This is the reason why HR manages are becoming International Human Resource Managers (IHRM).
Companies now have a global rather than a local presence with employees located worldwide. As with Reuter’s idea of information being a commodity, it is also a tool that can be used by everyone.
Business information is usually confidential and has traditionally been kept locked behind closed doors. Now businesses realize the value of this information and are now seeing the importance of sharing with their employees. Businesses are just starting to realize the critical factor of having the right information at the right time. This is why corporations are spending millions of dollars to interconnect their Sales force with their Distribution Center with Marketing, Manufacturing and with Support. This interconnection now enables everyone to see, in real time, the business and what is taking place. This new form of business, or virtual business, is now allowing the just-in-time production methods to realize efficient operation.
As sales inputs orders, they can see if inventory is available to allow them to control customer expectations. Manufacturing will see if production is at a proper level to satisfy demand. Marketing will see if the product information is targeting the expected customers and Support can determine product quality from the number of customer issues. It wasn’t long ago that this information would take weeks if not months to collect and then analyze before feedback could be provided. With this new technology, data is almost instantly available and enable the right decision to be made. IHRM can also use this tool to keep the employees informed on new products and customers on shipping dates of equipment.
These tools can be used to create a virtual office where employees can receive documents in their own language, make their input and send them back without having to leave their desk, pick up a phone or go through a translator. WEB pages today have this ability and more. Implementing these tools will create a virtual ‘Road Warrior’ or virtual ‘Expatriate’. Not only will these tools enhance employee satisfaction, it will also reduce corporate costs. The bottom line is what keeps a company alive and reducing costs will help improve profits and are vital logistical parts of business. Logistics Logistics is the designing and managing of a system in order to control the flow of material throughout a corporation.
This is a very important part of an international company because of geographical barriers. Logistics of an international company includes movement of raw materials, coordinating flows into and out of different countries, choices of transportation, cost of the transportation, packaging the product for shipment, storing the product, and managing the entire process. The concept of logistics is fairly new in the business world. The theoretical development was not used until 1966. Since then, many business practices have evolved and logistics currently costs between 10 and 25 percent of the total cost of an international purchase. There are two main phases that are important in the movement of materials: material management and physical distribution.
Materials management is the timely movement of raw materials, parts, and supplies. The physical distribution is the movement of the firm’s finished products to the customers. Both phases involve every stage of the process including storage. The ultimate goal of logistics is to coordinate all efforts of the company to maintain a cost effective flow of goods. There are four logistics concepts: the systems concept, the total cost concept, the after-tax concept, and the trade-off concept. The systems concept is based on all functions of an organization working together in order to maximize benefits.
This concept sometimes requires certain components of the organization to operate sub optimally in order to achieve maximum goals of the system. The total cost concept is based on the systems concept, however goal achievement is measured in terms of cost. A variation of the total cost concept is the after-tax concept. This goal of this concept is after-tax profit. This concept is becoming very popular because of the many different national tax policies. The trade-off concept links the system together in a way that is very efficient, but can have trade-offs that might be inefficient.
The advantages of such high efficiency must be weighed against the risks involved. One of the largest obstacles of international logistics is geography. The distance and manner materials must be shipped is the most important step in international logistics. Transportation infrastructures vary greatly throughout the world. International companies must consider all options before starting any operation in another country. Perhaps a country could have easy access by ship, but no way to transport the goods once on the ground.
All available routes into and out of the country must be determined in order to judge the feasibility of the operation. Ground shipments are excellent for neighboring countries such as the U. S. and Mexico.
Normally, shipping across ground borders is fairly uneventful and is usually the best method if time and distance allow it. Three types of service divide ocean shipments: liner, bulk, and tramp. Liner service is regularly scheduled passages on assigned and established routes. This ship routes are similar to taking a plane somewhere. This service is used more for one-time or irregular shipments. Bulk service is contractual for a prolonged period of time.
This service is for those needing to ship large quantities on a fairly regular basis. Tramp service is for irregular routes and scheduled as needed. This service would be to destinations liner service normally does not operate, and for large quantities. The type of ocean service you use also depends on where the material must go. Certain types of ships can only go to certain places, and certain ships can only carry a certain type of freight. All alternatives must be fully researched before ocean service can be considered as a valid option.
The biggest advantage of ocean shipping is cost. Typically, ocean service is the least costly option, however it also has the slowest travel time. Accidents are infrequent, however if one would happen, large quantities of material are lost all at once. Certain operations could not sustain long periods of downtime caused by lost goods, which could prove devastating.
Additionally, not all countries have adequate docking facilities and material may have to be delivered in another manner. Sometimes, the material can be ocean shipped to a neighboring country, and then trucked across land. Airfreight is the quickest method for shipping goods. It also is the most costly.
While the airfreight industry has had tremendous growth over the years, it still makes up less than 1 percent of all international freight. Typically, airfreight is used for high value items, and those requiring a short transit time. Perishable goods for instance, requires air shipment. Another advantage to airfreight is the abundance of facilities throughout the world that are accessible by air. Transit time is another important aspect of international logistics, and is closely related to the manner in which the material is shipped. Because the ocean freight takes longer, large quantities are shipped.
This requires storage of inventory in both countries. By using airfreight, the smaller quantities and more periodic shipments can reduce storage costs. Airfreight is also more predictable than ocean shipments. Where a ship may be a few days late, the airfreight is usually only a few hours late. Predictability is important for many types of shipments, and when it is required, airfreight is the mode of choice. Packaging for international shipments must also be researched.
Many times, a single shipment may be trucked, air freighted, and shipped. Packaging for three different types of shipping can be tricky. The most common type of international shipping is in containers. These containers can ride on a truck and then be placed on a ship. Beyond general packaging, climate changes must also be taken into consideration. Care must be taken that the freight is not susceptible to extreme temperatures or humidity.
When airfreight is being used, the weight of the packaging must be considered for maximum benefit. Extremely heavy packaging can add thousands of dollars to an airfreight bill. The final part of logistics is how to tie this system together. All of these different options and concepts must flow together and operate as efficiently as possible. There are three basic forms of logistics management. Centralized logistics management provides that the logistics operations are headed by managers that also head other divisions of the company.
This type of management helps avoid internal problems by having a central manager that ultimately decides how logistics and operations are coordinated. Decentralized logistics management is based on the fact that a company needs to have a division that helps control the local-adaptation needs. Dealing with different cultures requires input from the local branch. The managers that deal with the cultural differences on a daily basis normally know what works and what does not. Outsourcing is the final option for logistics management. When this happens, transportation firms concentrate on logistics, and the company can concentrate on its production.
There are many cost savings using this type of program, however that lack of control can negatively affect many companies. International logistics requires many different options and requirements to be met in order for a company to operate internationally. It’s like a big puzzle that must be put together, in order for all the goals to be met. As described above, there are many options to consider, and sometimes what appears to be an option really isn’t.
It is not difficult to hit a roadblock, and you must start over with a new plan. Once the logistics plan is in place, you must constantly look for improvements in order to maximize profits and goals. With the use of the Internet, exchange rates are now available at the click of a button. Companies can order raw material, control labor cost and manufacturing of goods in order to control costs. The below chart shows the exchange rate of the U. S.
dollar compared to other countries in are market. Using the Internet, a company needs to think outside of the box. Fluctuating purchasing power of the U. S dollar falls and rises in many countries without notice. We need to be ready for anything the market will throw at us.
Conclusion In Summary, we focused on the employee aspects relating to International Human Resources. Do you remember the quote stated in the beginning of this presentation? It was “The biggest change we made, without question, was the move to a boundary less company. We got rid of the corner offices, the bureaucracy, the ‘not-invented-here’s yndrome. Instead, we got every mind in the game, got the best out of all our people.” That is what we want; isn’t it? The best out of our people! These topics that we have discussed today address some of the employee issues that face international businesses. I want you to remember that there are plenty of International Human Resource vendors out there, if you need help.
One example is: web We covered some aspects of recruitment and hiring, employee relations, employee benefits, virtual business and logistics. Out of each of these topics are some key things to remember. They are: 1. Recruitment and hiring are no longer limited to the mundane tasks and corporate gambles of interviews, unscientific and arbitrary elimination processes, or nepotism and connections.
It will rely upon a scientifically and biologically explainable and predictable process that maximizes profit, by selecting the BEST possible candidate. 2. The relationship between employee and employer is one of give AND take. In the case of workplace injuries, it is a moral issue to keep your employees as safe as possible and safety issues differ from country to country.
Employers and employees NEED to have a good relationship in order to gain competitive advantage. 3. There are many suggestions and avenues for expatriate compensation. Look for the best and cost effective one for your organization. This will benefit both you and the employee. Also, training is a necessity, especially cultural and language training.
Expatriate orientations could save your company from costly mistakes. 4. Virtual business IS here! We know that this has made the task of employee management easier and quicker. It is important and valuable to share information with your employees. The Internet has allowed information to be there at the right time.
These virtual tools will enhance employee satisfaction as well as reduce corporate costs. 5. A very important part of an international company is the designing and managing of a system in order to control the flow of material: logistics. Do you remember that there are four logistics concepts? Well, consider them and the advantages of high efficiency must be weighed against the risks involved. Also, modes of transportation of materials is very important; the fastest way may not be the safest way. Please keep in mind that all of the different options and / or concepts MUST flow together and operate as efficiently as possible.
In conclusion, we hope that you have found that this information was informative and something you will be able to use in your international endeavors! If you still have specific questions, please feel free to come see one of us. Thank you; Everyone! Bibliography “A Survey of HR Professionals on Successful Expatriate Assignments” web > web > web > Cendant Mobility Services Corporation. “Exploring The Limits Of What’s Possible” 1997-2003 web (6/2004) Colangelo, Paul, HR Director at Muro Pharmaceuticals, interview June 11, 2003. ECA – Employment Conditions Abroad Limited, “The World’s Fastest Access To The World’s Leading International HR Solutions.” ECA International 2003 web > “Expatriate Assignments” web > web > web > web > web > John Deere International Policies on shipment of Whole Goods overseas Jan, 2001 Internal Business plans for overseas shipments Lockheed Martin Corporation, “65 Successes In A Row For Atlas” 2002.
web (6/2004) Mendenhall, Mark and Gary Odd ou. Readings and Cases In International Human Resource Management. International Thompson Publishing, 2000. Mueller, Stephen L. “International Business Part 3” 11/16/99 web (6/2004) web > web > web > Polak International Consultants, Inc. “Using our depth of international resources to help our clients” 2003.
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