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International HRM Full Summary

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International HRM (HMA87A)

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Katholieke Universiteit Leuven (KU Leuven)

This is a personal summary from the course 'International HRM', given by Prof. Ralf Caers. It encompasses all the content seen during the classes and powerpoints, cases (explained when necessary) and my personal notes (no ChatGPT). The mock exam with correction is added and it is easy to study from.

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Type Samenvatting

human resource management
international hrm
ralf caers
expats
hrm in the uk
hrm in the us
hrm in africa
country of origin effect
host country effect
unions

Instelling
Katholieke Universiteit Leuven (KU Leuven)
Studie
Business Administration
Vak
International HRM (HMA87A)

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INTERNATIONAL HRM
Ralf Caers

MBA 2023-2024

Charlotte De Keukelaere
[E-mailadres]

,MBA 2023-2024 Prof. Ralf. Caers

1 TABLE OF CONTENTS

SETTING THE SCENE ........................................................................................................................................ 7

1 Strong and Weak Institutions/Firms ........................................................................................................ 7
1.1 Strong Institutions and Weak Firms ........................................................................................................ 8
1.1.1 Liberal Countries ............................................................................................................................. 8
1.1.2 Restricted/Illiberal Countries ........................................................................................................ 11
A Case: After School Tutoring (2021).................................................................................................... 11
B Case: PICC (China).............................................................................................................................. 12
C Case: AMC (US) .................................................................................................................................. 12
D Case: China Musk Tweet (US) ............................................................................................................ 13
1.1.3 Having Control – Role of HR? ........................................................................................................ 13
A Case: US Political Appointments ....................................................................................................... 14
B Case: Erdogan (Turkey)...................................................................................................................... 14
C Case: European fruit banned in Russia .............................................................................................. 15
D Case: Belgian Pork in China ............................................................................................................... 16
E Case: ASML machines to China (2023) .............................................................................................. 16
F Case: Nationalization in Russia - NOT ON THE EXAM ....................................................................... 17
G Case: Doctor quota ............................................................................................................................ 17
1.2 Weak Institutions and Strong Firms ...................................................................................................... 18
1.2.1 Weak is Relative! ........................................................................................................................... 18
1.2.2 Lobby Groups ................................................................................................................................ 19
1.3 Strong Institutions and Strong Firms ..................................................................................................... 19
1.3.1 Companies that do not comply ..................................................................................................... 19
A Case: Apple 2020 ............................................................................................................................... 19
1.3.2 Companies that rule like a court ................................................................................................... 20
A Case: Ring Doorbell ........................................................................................................................... 20
1.3.3 Companies that fight for their culture........................................................................................... 20
1.4 Weak Institutions and Weak Firms........................................................................................................ 21
1.4.1 Corruption Perceptions Index ....................................................................................................... 22

Comparative Approach ................................................................................................................................. 22
1.1 From Europe to US................................................................................................................................. 22
1.1.1 Freedom Requires Rules too ......................................................................................................... 23
A Case: Nvidia (Antitrust Law) .............................................................................................................. 23
B Case: Amazon (Antitrust Law) ........................................................................................................... 24
1.2 A Different Path For Europe................................................................................................................... 24
1.3 Nature or Nurture? ................................................................................................................................ 25
1.3.1 The Case of UK & Japan ................................................................................................................. 25
1.3.2 The Case of UK & China ................................................................................................................. 26
1.3.3 The Case of Seychelles................................................................................................................... 26
1.4 Developed nations are not immune ...................................................................................................... 26
1.4.1 Case: PostNL .................................................................................................................................. 27

HR IN AFRICA ................................................................................................................................................ 28

1 Africa in Numbers.................................................................................................................................. 28
1.1 Africa in GDP ......................................................................................................................................... 28
1.2 Africa & historical determinism ............................................................................................................. 28
1.2.1 Case: The Yorùba ........................................................................................................................... 29

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,MBA 2023-2024 Prof. Ralf. Caers

A The Mason-Dixon Line ....................................................................................................................... 29

2 DIFFICULTIES FOR BUSINESS .................................................................................................................. 30
2.1 Business is not keen on war ................................................................................................................... 30
2.1.1 Case: Congo hold-up...................................................................................................................... 30
2.1.2 Jihadist violence in Africa .............................................................................................................. 31
A Case: Total Energies in Mozambique ................................................................................................ 31
B Case: Burkina Faso............................................................................................................................. 32
C Case: Mali (Former French Colony) ................................................................................................... 33
2.2 Rare Diseases ........................................................................................................................................ 33

3 Historical Determinism in Africa ............................................................................................................ 34
A Case: Seychelles................................................................................................................................. 34
3.1 Obstacles for strategic HR ..................................................................................................................... 35
3.2 HR Solutions .......................................................................................................................................... 36
3.2.1 Ubuntu .......................................................................................................................................... 36
3.2.2 Recruitment & Selection in Africa ................................................................................................. 37
A Case: Wako-ni-wako (Zambia) ........................................................................................................... 37
3.2.3 Performance Management in Africa ............................................................................................. 38
3.2.4 Compensation in Africa ................................................................................................................. 38
3.2.5 Training in Africa ........................................................................................................................... 39
3.2.6 Unions in Africa ............................................................................................................................. 39
A Case: South-Africa ............................................................................................................................. 40
B Case: Malawi ..................................................................................................................................... 42

4 What does the future hold?................................................................................................................... 42

5 China in Africa ....................................................................................................................................... 43
5.1 Chinese Expats in Africa......................................................................................................................... 44
5.1.1 China and the African Malaria Issue .............................................................................................. 45

HR IN THE US (MNEs) .................................................................................................................................... 46

1 The US in Numbers ................................................................................................................................ 46
1.1 US Real GDP........................................................................................................................................... 46
1.1.1 US Debt & Deficit ........................................................................................................................... 46
1.2 The Evolution of the US Population ....................................................................................................... 47
1.2.1 US Employment Rate ..................................................................................................................... 47

2 HRM in US MNEs ................................................................................................................................... 48
2.1 The US Business System......................................................................................................................... 48
2.1.1 Product Markets ............................................................................................................................ 48
2.1.2 The role of the state ...................................................................................................................... 48
2.1.3 Financial Markets .......................................................................................................................... 49
2.1.4 The Labour Market ........................................................................................................................ 50
A Case: Deceuninck .............................................................................................................................. 50
B (Relatively) Weak Unions in the US ................................................................................................... 51
2.2 Implications for HR ................................................................................................................................ 51
A US firms and the Covid Mandates ..................................................................................................... 52
2.2.2 Pay and Performance .................................................................................................................... 52
A Forced Distribution: 10-80-10 ........................................................................................................... 53
B Case: Apple ........................................................................................................................................ 54

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,MBA 2023-2024 Prof. Ralf. Caers

C Executive Compensation ................................................................................................................... 54
2.3 HR in US MNEs....................................................................................................................................... 55
2.3.1 Case: McDonalds Recruiting .......................................................................................................... 55

3 Unions in the US .................................................................................................................................... 56
3.1 Case: Microsoft and Unionization ......................................................................................................... 56
3.2 Actively Resisting Unions ....................................................................................................................... 57
3.2.1 Case: Starbucks (2022) .................................................................................................................. 57
3.2.2 Case: Starbucks (2022) – The Fight Is Still On ................................................................................ 58
3.3 Passively Resisting Unions ..................................................................................................................... 59
3.3.1 Apple Case (2022).......................................................................................................................... 59
3.3.2 Amazon Case (2021) ...................................................................................................................... 59
A Case: Amazon (2021) - There is more to the story ............................................................................ 60
3.4 2023 - The year of the union comeback ................................................................................................ 60
3.4.1 Case: WGA and SAG-AFTRA (2023) ............................................................................................... 60
A What can we do to hurt and slow down the power of the unions? .................................................. 62
3.4.2 Case: United Auto Workers (2023) ................................................................................................ 63
A Special Feature of The Strike – Joe Biden & IRA (vs. Tesla) ............................................................... 64
3.5 HR in US MNEs....................................................................................................................................... 65
3.5.1 Workplace Diversity ...................................................................................................................... 65
3.5.2 Balancing Your Values with Others' Values ................................................................................... 66
3.5.3 Managerial Careers ....................................................................................................................... 67
3.6 The US Business System......................................................................................................................... 67
3.6.1 The Great Resignation ................................................................................................................... 67
3.6.2 Tight Labour Market ...................................................................................................................... 68
A Interest Rates .................................................................................................................................... 68
3.6.3 Big (Tech) Companies .................................................................................................................... 68
3.6.4 Data Availability............................................................................................................................. 69
A Weekly Initial Jobless Claims ............................................................................................................. 69

HR IN THE UK ................................................................................................................................................ 70

1 The UK in Numbers................................................................................................................................ 70
1.1 The UK 2021 Cencus Data ..................................................................................................................... 70

2 Between 1800 – 1979 ............................................................................................................................ 71
2.1 Societal Split .......................................................................................................................................... 71
2.2 Paternal System..................................................................................................................................... 71
2.3 The Commonwealth idea....................................................................................................................... 72

3 Between 1979 – 1997 ............................................................................................................................ 72
3.1 Thatcherism ........................................................................................................................................... 72
3.1.1 History ........................................................................................................................................... 73

4 Unions in the UK ................................................................................................................................... 74
4.1 Between 1979 – 1997 ............................................................................................................................ 74
4.1.1 The Ballot Idea for Strikes ............................................................................................................. 75
4.1.2 Advantages of Union Membership: Personal Level....................................................................... 77
A About Grievances .............................................................................................................................. 77

5 The UK after 1997.................................................................................................................................. 78

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,MBA 2023-2024 Prof. Ralf. Caers

5.1 The UK in the New Millenium ................................................................................................................ 78
5.1.1 Case: Agency workers during strikes ............................................................................................. 78
5.2 HRM in the UK ....................................................................................................................................... 79
5.2.1 Advantages of Union Membership: National Level ....................................................................... 79
A Information & Consultation .............................................................................................................. 79
B Collective Bargaining ......................................................................................................................... 80
5.2.2 Diversity......................................................................................................................................... 80
A Case: The Murder of Stephen Lawrence ........................................................................................... 80
B The Race Relations Act (2000 Amendment) ...................................................................................... 81
C Case: Morecambe Bay (2004) ........................................................................................................... 81

6 Quick note on Brexit.............................................................................................................................. 81
6.1 Multiple Reasons for Leaving ................................................................................................................ 82
6.1.1 About Higher Wages...................................................................................................................... 82
6.2 The Skilled Worker Route ...................................................................................................................... 83
6.3 The Senior or Specialist Worker Visa ..................................................................................................... 84
6.4 Graduate Route ..................................................................................................................................... 84
6.5 Discrimination of Foreign Workers ........................................................................................................ 84

EXPATS ......................................................................................................................................................... 85

1 Introduction .......................................................................................................................................... 85
1.1 Definitions ............................................................................................................................................. 85

2 4 Approaches to International Staffing .................................................................................................. 85
2.1 Ethnocentric Staffing – Aims & Advantages .......................................................................................... 86
2.2 Ethnocentric Staffing - Disadvantages .................................................................................................. 86
2.3 Polycentric Staffing – Aims & Advantages ............................................................................................ 87
2.4 Polycentric Staffing – Disadvantages .................................................................................................... 87
2.5 Regiocentric Staffing – Aims & Advantages .......................................................................................... 88
2.6 Regiocentric Staffing – Disadvantages .................................................................................................. 88
2.7 Geocentric Staffing – Aims & Advantages ............................................................................................. 89
2.8 Geocentric Staffing – Disadvantages..................................................................................................... 89

3 Taking it from the workers’ perspective ................................................................................................ 90
3.1 Parent Company Nationals – PCNs ........................................................................................................ 90
3.1.1 2 Types of PCN Activities ............................................................................................................... 90
3.1.2 About Learning-Driven PCN Activity .............................................................................................. 91
3.1.3 Challenges for PCNs....................................................................................................................... 91
A Case: Malaysia ................................................................................................................................... 91
3.1.4 Another model about PCNs ........................................................................................................... 92
A The PCN as an Agent of Direct Control .............................................................................................. 92
B The PCN as an Agent of Socialization ................................................................................................ 92
C The PCN as an (Internal) Network Builder ......................................................................................... 93
D The PCN as an (External) Boundary Spanner ..................................................................................... 94
E The PCN as a language node ............................................................................................................. 94
3.2 Host Country Nationals – HCNs ............................................................................................................. 94
3.2.1 Challenges For HCNs...................................................................................................................... 95

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,MBA 2023-2024 Prof. Ralf. Caers

3.3 Third-Country Nationals – TCNs ............................................................................................................ 95
3.3.1 Challenges for TCNs ....................................................................................................................... 95

4 The Expat Assignment ........................................................................................................................... 96
4.1 Differences in the length of the expat assignment ................................................................................ 96
4.2 Note: Female Expats .............................................................................................................................. 97
4.1 The Commuter Assignment ................................................................................................................... 97
4.2 The Rotational Assignment ................................................................................................................... 97
4.3 The Virtual Assignment ......................................................................................................................... 97

5 The Expatriate Cycle .............................................................................................................................. 98
5.1 STEP 1: Selection.................................................................................................................................... 98
5.1.1 About The Cost Of The Expat......................................................................................................... 98
5.1.2 Drivers For Expat Success .............................................................................................................. 99
A Adding To That List ............................................................................................................................ 99
B 2 statements to debate about ......................................................................................................... 100
5.1.3 Selecting The Expat ..................................................................................................................... 101
A There are scales to test value differences between countries ........................................................ 102
5.1.4 The Complexity For Dual Career Couples .................................................................................... 102
A It’s about more than just the spouse .............................................................................................. 103
5.2 STEP 2: Preparation ............................................................................................................................. 103
5.3 STEP 3: Training ................................................................................................................................... 104
5.4 STEP 4: Support-In-Post ....................................................................................................................... 105
5.5 STEP 5: Repatriation ............................................................................................................................ 106
5.5.1 When Repatriation is Irrelevant: Localization of the Expat ......................................................... 107

6 Remuneration & Relocation (why is it so expensive?) .......................................................................... 108
6.1 Home-based remuneration ................................................................................................................. 108
6.2 Host-Based Remuneration................................................................................................................... 109
6.3 Some Premia to Consider .................................................................................................................... 109
6.3.1 Cost-Of-Living Allowance (COLA)................................................................................................. 110

7 Assistance To Consider ........................................................................................................................ 110

8 Note: About Currencies ....................................................................................................................... 111

9 Note: About Tax, Pension & Social Security ......................................................................................... 111

CHAPTER X .................................................................................................................................................. 112

1 Country-Of-Origin Effect Or Host Country Effect? ................................................................................ 112
1.1 The Country-Of-Origin Effect ............................................................................................................... 112
1.1.1 Arguments in favor of the country of origin-effect ..................................................................... 112
1.1.2 Arguments in favor of the host country effect ............................................................................ 112
1.2 The country-of-origin effect in US MNEs ............................................................................................. 113
1.2.1 But not a full country-of-origin effect ......................................................................................... 114
1.2.2 The waning wow-image of the US ............................................................................................... 114
A Case: Movie Industry ....................................................................................................................... 114
B Case: Disney – Important!!! ............................................................................................................ 115
C It is not limited to underdeveloped nations .................................................................................... 118

5

,MBA 2023-2024 Prof. Ralf. Caers

MOCK EXAM ............................................................................................................................................... 119

1 General Info ........................................................................................................................................ 119

2 Questions + Answers ........................................................................................................................... 119

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,MBA 2023-2024 Prof. Ralf. Caers

SETTING THE SCENE
What to expect?

• Bit of a history class (Next year: Contemporary History of International HRM)
• Business cases -> What’s going on in the world?
• Sometimes comparative, not the main aim
• Understanding stereotypes, even if the (entire) economy no longer looks that way
• HR in a country and HR in MNEs
• Focus on US, UK, Europe, Africa, Japan and on expats
• Adding China too if we make it there

è We will look at if the stereotypes are still relevant today
è Understand the meaning of these stereotypes and their background/history (why do we look at China, Japan in a
certain way)

Maybe reality is too complex

• The West versus not The West (Too simple)
o Japan is the West?
o How West is Hungary?
• Liberal versus not so liberal
o EU versus US
• Free versus not so free
o Unionism and repression
• Maybe theoretical models help us to understand the
• foundations of countries and MNEs
o Understanding gravity versus understanding tap water

Exam info Slides:

• Understand the slides with notes • CH.1 Setting the scene: 1– 39, 41-80
• No book • CH. 5 HR in US: 1 – 80
• Importance of the cases • CH. 6 HR in Africa: 1 – 64
• CH. 7 HR in UK: 1 – 53
• CH. 8 Expats: 1 – 31, 33 – 63, 65 – 82
• CH. X Special: 1 – 31

1 STRONG AND WEAK INSTITUTIONS/FIRMS

Institutions => Governments and governing bodies in nations
(not only the politicians, but also what institutions are in place that control the market)

Weak is relative!! We talk about big/huge companies, who do have some power, but they sometimes need to
accept and follow rules and legislations

1. Strong institutions and weak firms
2. Weak institutions and strong firms
3. Strong institutions and strong firms
4. Weak institutions and weak firms

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,MBA 2023-2024 Prof. Ralf. Caers

1.1 STRONG INSTITUTIONS AND WEAK FIRMS

1.1.1 LIBERAL COUNTRIES

Governments have power, which they can use over organisations.
- such as boundaries and restrictions:
o 38h work week in BE (on average over the course of 3 months)
o Minimum wages (if we allow the market to act on itself, it will exploit workers)
§ Cases of Delivery companies (PostNL, DPD)
§ The race to the bottom = We search for the person/worker who works for the least
amount of money (the cheapest employee will get the contract)

è The organisations have to adapt themselves and respect the laws of each region

“Societal view on HR”
= The belief that organisations are not islands, that they don’t act alone. So, they exist within a marketplace, a
country… which all influences the company.

Other example

‘The right to disconnect’ (in France, 2016)
= A law that people/workers should be free of their employer at a certain point in time, they should be aware
that their employer shouldn’t contact them. ‘You don’t have to be stand by’

è However makes it difficult for MNE’s
o When they operate in different time zones and they need to contact their daughter-firm
o The employees are awake and could answer the phone, but it is not allowed

ð Business is hurt -> Costs money & less competitive vs. other continents/regions

Sometimes the belief that when the Government is strong and restricted/controlling:
No possibility for capitalism or liberalism -> RALF DOES NOT AGREE!!

“When restrictions are in place, it does not necessarily mean that we are not competitive! Because, there is still
a liberal market within Europe, even though we do have laws and rules on employment.”

ð Strong institutions do not rule out capitalism or liberalism

Concrete example with numbers

8

, MBA 2023-2024 Prof. Ralf. Caers

The amount of rest/sleep/free time you take is a social construct and based on personal choices.

However, in the Western society it has become the standard to work 8h of the 24h a day
- Has been evolved from the Industrial revolution where people worked 12h a day, 7/7
- There was no vacation*

* Vacation is seen as a cost for the company, however it is installed for the reason that when people get a
brake from their work, they come back more inspired and more productive (therefore, not really a pure cost)

- The amount of vacation days is dependent on the sector (the standard = 20 days)

Calculations of how many working hours a person delivers over different nations -> Hence the ‘social construct’

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