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NGUYEN HOANG TIEN STRATEGIC INTERNATIONAL HUMAN RESOURCE MANAGEMENT NGUYEN HOANG TIEN STRATEGIC INTERNATIONAL HUMAN RESOURCE MANAGEMENT Warsaw 2017 Scientific review by: Professor Stanislaw Borkowski © Copyright 2017 by Wydawnictwo EMENTON Issue I, Warsaw 2017 All rights reserved Any fragment of this book may not be reproduced, copied or saved in processing systems or any other form using mechanical and electronic devices or others without permission of the publisher ISBN 978-83-65009-21-0 Publisher: Wydawnictwo EMENTON ul Płocka 40 lok 11 01-173 Warszawa e-mail: biuro@ementon.pl www.ementon.pl Printing and binding: Drukarnia cyfrowa ELPIL ul Artyleryjska 11, 08-110 Siedlce tel.: (25) 643-50-42, fax: (25) 643-43-46 e-mail: info@elpil.com.pl www.elpil.com.pl TABLE OF CONTENTS FOREWORD PART A HUMAN RESOURCE MANAGEMENT I HRM and its business context 10 I.1 Definitions, principles, aims of HRM 10 I.2 Business context of HRM 18 II HRM’s STAFFING function 21 II.1 Labor market and employment systems 21 II.2 Human Resource planning 23 II.2.1 Definitions and approaches 23 II.2.2 Advantages and disadvantages 31 II.2.3 Practice of Human Resource planning 33 II.3 Recruitment and selection 34 II.3.1 External and internal staffing 34 II.3.2 Systematic approach 36 III HRM’s DEVELOPING function 47 III.1 Changing context of HRM 47 III.2 Learning and training 48 III.3.Human resource development 51 III.4 Management development 55 III.4.1 Definitions and approaches 55 III.4.2 Management development program 56 IV HRM’s RETAINING function 69 IV.1 Labor contract and employee rights 69 IV.2 Terms and conditions of employment 72 IV.3 Reward systems 76 IV.4 Performance management 83 IV.5 Employee involvement, communication and empowerment 87 PART B STRATEGIC HUMAN RESOURCE MANAGEMENT I Conceptual framework of Strategic HRM 93 I.1 About strategy 93 I.1.1 Definitions of strategy 93 I.1.2 Concepts of strategy 96 I.2 About Strategic HRM 100 I.2.1 Definitions, principles, aims of Strategic HRM 100 I.2.2 Concepts of Strategic HRM 105 I.2.3 The best practice approach and best fit approach 107 I.2.4 The reality and practical implication of Strategic HRM 111 II Strategic HRM in practice 113 II.1 HR strategy 113 II.1.1 HR strategy definitions 113 II.1.2 Overall and specific HR strategies 114 II.1.3 Developing effective HR strategy 116 II.2 Strategic role of HR 118 II.2.1 Strategic nature of HR 118 II.2.2 Strategic role of HR directors, business partners, advisors and assistants 119 III HR strategies 121 III.1 Human Capital Management strategy 121 III.2 High Performance strategy 124 III.3 Corporate Social Responsibility strategy 127 III.4 Organization Development strategy 130 III.5 Employee Engagement strategy 133 III.6 Knowledge Management strategy 136 III.7 Employees Resourcing strategy 138 III.8 Talent Management strategy 142 III.9 Learning and Development strategy 145 III.10 Employee Rewarding strategy 148 III.11 Employee Relations strategy 151 PART C INTERNATIONAL HUMAN RESOURCE MANAGEMENT I Global business context 153 I.1 Socio-cultural context 153 I.1.1 National culture and management issues 153 I.1.2 National culture and HRM issues 156 I.2 Institutional context 158 I.2.1 National institutions 158 I.2.2 International institutions 162 I.3 Technology and organizational impact 163 II Multinational Enterprise 169 II.1 Evolution of Multinational Enterprise 169 II.2 Organizational structure design 180 II.3 Parent-subsidiary relationship 186 III International HRM in Multinational Enterprises 193 III.1 International HR planning 193 III.2 International HR staffing and assignment 195 III.3 International training and management development 210 III.4 International compensation 222 III.5 International performance management 230 III.5.1 Purposes and roles of international performance management 230 III.5.2 Effective international performance management system 233 IV Global issues of International HRM 238 IV.1 Global cooperation and partnerships 238 IV.1.1 International joint-ventures 238 IV.1.2 Mergers and acquisitions 240 IV.1.3 Strategic alliances 245 IV.2 Knowledge management 247 IV.2.1 Organizational knowledge 247 IV.2.2 Transfer of knowledge 250 IV.2.3 Managing knowledge 253 IV.3 Differentiation or integration 255 IV.3.1 The relevance of the issue 256 IV.3.2 Mechanisms to achieve integration 257 IV.4 Other global issues 259 IV.4.1 Employer branding 259 IV.4.2 Managing talent 260 REFERENCE 264 ILLUSTRATIONS AND TABLES 281 FOREWORD Strategic Human Resource Management and International Human Resource Management are new management academic courses delivered at many world universities They appeared as a result of the combination and integration approach toward the fields of Strategic Management, International Management and the field of Human Resource Management as a background Strategic Human Resource Management highlights the importance of all the Human Resource Management functional areas, including recruitment, training and remuneration (compensation) through uplift all of them to the wholecompany strategic level while International Human Resource Management adds the international dimension to the tradition understanding of Human Resource Management During these courses the students, the readers will study, beside Strategic Human Resource Management in theories, the main Human Resource strategies that cover one functional area of Human Resource Management or several areas at the same time in both the domestic and international dimension So, the content and the possible application in practice of those main Human Resource strategies will be examined in detail Due to the fact that the course of Strategic Human Resource Management as well as the course of International Human Resource Management are totally new and delivered mainly in English Moreover, all accessible textbooks are presented in English This textbook, in a quite condensed form, is very useful and helpful for the readers to quickly and easily understand the main points of the given two important issues As an author, I hope that this textbook will make the study of Strategic Human Resource Management and International Human Resource Management courses easier and more fruitful Nguyen Hoang Tien Part A HUMAN RESOURCE MANAGEMENT I HRM and its business context I.1 Definitions, principles, aims of HRM Definitions of Human Resource Management Human Resource Management is usually defined and understood as an approach, with strategic accent, to managing people which is considered as core and the most valuable assets in enterprise, who individually and collectively contribute to the achievement of objectives of enterprise As the followings, we have several important definitions reflecting the general views of the authors in the mainstream literature of Human Resource Management Boxall describes Human Resource Management simply as the management of works and people towards desired ends (Boxall et al 2007) As John Storey believes, Human Resource Management can be regarded as a set of interrelated strategies, policies, procedures and practices with an ideological and philosophical underpinning He suggests four following aspects that constitute to the meaningful version of Human Resource Management (Storey 1989):  A particular constellation of beliefs and assumptions;  A strategic thrust that informs all decisions about people management;  The central involvement of line managers;  Reliance upon a set of levers to shape the employment relationship Human Resource Management, and the general management process alike, could be defined by a certain cycle model In this cycle model, Fombrun, Tichy and Devanna held that Human Resource systems and the organization structure should be managed in a way that is relevant to and congruent with organization strategy They also further explained that there exists a Human Resource Management cycle which consists of four generic processes or functions that are performed 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Management, International Management and the field of Human Resource Management as a background Strategic Human Resource Management highlights the importance of all the Human Resource Management... IV.4 Performance management 83 IV.5 Employee involvement, communication and empowerment 87 PART B STRATEGIC HUMAN RESOURCE MANAGEMENT I Conceptual framework of Strategic HRM 93... Hoang Tien Part A HUMAN RESOURCE MANAGEMENT I HRM and its business context I.1 Definitions, principles, aims of HRM Definitions of Human Resource Management Human Resource Management is usually