 So, we are always close, we are done, 45 lectures are with us, so today we will discuss lecture number 44. So, today's session, we will start. But before we start our today's session, let me ask you few questions. I am going to apply the 40th lecture, lecture number 1, lecture number 40, we dedicated those lectures to understand the basic management concept and of course, the main emphasis was on our human resource management part or here I am going to NPRK 41, 43 lectures that we reviewed those basic human resource management functions. So, my question will be now, how you are feeling about the learning? Are you confident enough, ready to go for evaluation? If yes, we both should be proud. If no, something is wrong, still you have time get back to us and we will try to help you out. Let us start our today's session. As usual, we have to quickly go back and see what we have covered during our previous lecture and that was lecture number 43. As you all know, we have covered all the functions of human resource management in class, quickly we have covered it, starting with the staffing, human resource development, compensation benefit, health and safety and implies labour relationship. So, last lecture we covered the last three part, the compensation benefits, health and safety programs and implies labour relationship, which means union, collective bargaining and so on. So, that part is now completed. I am sure that your confidence level will be high after reviewing this. Today we discussed a very important topic, especially when we are talking about that word is becoming a global village. We are going toward globalization. Managing human resources in an international business, global business or international business. We will use both terms simultaneously. Stages of global organization, when you are focusing only in your own country, domestic organization, then at the next stage, international organization becomes a product or services. Then it can be multinational. Similarly, global or transnational organizations, which have independent unit in different country. They are different stages in those international business or globalization business. But why? Why to go for global? Why to go for international business? The big question mark. Do you have any idea? Why people think they want to go beyond their domestic boundaries? They want to expand their business. Very logical answer can be, of course they want to increase their market share. They want to increase their business. That is a good answer. What else? They might have produced more and they have already saturated their domestic market. So they are looking new markets. That is why they are going out of boundaries, out of their domestic boundaries. Oskelava carries an osakti. And few time, and sometime rather, organization can also go beyond their domestic markets because there are some benefits involved there. It may be the labor is cheap there. The raw material is available easily there. Transportation is easily managed from there. Or maybe some other tariffs and those type of things. But yes, this is the trend in the market now. People are thinking beyond their boundaries. And that is the basic concept of this globalization. The international business concept. People are thinking beyond their domestic market. What happened? Communication improved. New technologies are coming. Exposure increased. Competitive pressure was there. So business started thinking of expanding. The merger and acquisition started. Smaller units made a bigger setup. That is a different story, but we don't want to go there. But these are the different aspects, different forces. Because of which, business spread. The landscape changed the world. That was another reason. There were different types of tariffs. There were different types of agreements signed. There was NAFTA. And similarly others. Economic pressure is there. The landscape of the globe is changing. If you see at the globe. In some time, the USSR, Russia was a big part of the world. Now they are divided in small states. Similarly, European Union. It is a big set up. It will change the way of business. And similarly other factors. They have forced business to think beyond their markets. Beyond their domestic boundaries. So these were the reasons that business were going out of their domestic markets. So let's see those evaluations of global business. It started like you said. Domestics say you started exporting things. The reason for that was more production. Domestic markets were saturated. And for opportunities. Your competitor started doing the same. And some other opportunities. You start exporting. There will be some terminology that will help you understand these things. Licensing. Organization grants. A foreign firm the right to use intellectual properties. That you can use their name and do business in other places. That is licensing. We call it franchising. But in franchising, parent organization, they have the hold. You can work with their prescribed manager. This is how they started expanding. Now, everybody joins them. They are also entering our country. You have seen the McDonald's. You have seen the KFC. You have seen the General Electric and other things. Pepsi, Coke. They are all coming. They are focusing now this area. Because they have the huge market available here. The population of India, Pakistan, China. You just compare the Dunya Main. Maximum population is inside there. The market is there. The potential buyer. Similarly, multinational corporations running. Firms that is based in one country. And produce goods and provide services. And one or more foreign countries. The multinational concept. And global corporations. The corporate unit in a number of countries. That are integrated to operate as one organization. All worldwide. The global corporate concept. Developed. Some of the words. Ex-patriot. What is it? Have you ever heard of Pakistan? Ex-patriot. Pakistan working abroad. A citizen of one country. Living and working in another country. Is known as Ex-patriot. Multinational corporation. What is it called? A firm. With assembly and production facility in several countries. And region of the world. We call them multinational corporation. MNC, what is it called? Similarly, transnational corporations. A firm which operates in many countries. And highly decentralized operations. The firm owns little. To its country of origin. And has weak ties to any given country. And the unit Mughalif countries they are working independently. But of course under the same corporate umbrella. Now with our subject, related to our subject. Human resource and international business challenges. Why are we concerned? Because people are working everywhere. Human resources are there. They are playing very important role. So let us see what kind of challenges. Related to our subject. The human resource management are there. Due to this international expansion of business. Or international business. Or we can say the global business. What HRM strategies are appropriate. At different stages of internationalization. Globalization concept is coming. Should we go with the same strategy? Will it be different? Of course it varies from country to country. Region to region. How is the best implies mix? How can we make sure? That we can have the best implies mix available with us. Let us see if one of our unit is in another country. How many implies should I have from the host country? Or how many have from the parent country? This mix host country or expatriates. How many ratios to be done? Or how many best mix you have to create? This is another challenge. Sometime there are legal bindings from those countries. That you have to take care of local people here. And for you, HRM is a big problem. Because the culture is different. The values are different. The work behavior is different. They discuss this in the future. Why do international assignments fail? Or that is why we have seen that when you go for international business. Most of the time if you do not have the right planning. If you do not have the proper contingency plans and sport. You might fail there. And how are returning implies? Reintegrated into the firms. This is also very important. Now if you want to send your own worker abroad. Of course it will be for some time. For some duration. One year, two year, five year or so on. So one way or other they have to come back. When they come back, that is a big problem. How to settle that? That is another challenge. How can you develop your workforce? When we are talking about international business. Knowledge and innovation, dissemination. How can you make sure that they are disseminated equally in each part of your setup? Or identifying and development talent on a global basis. Its training, development. Your different setups. How to do that? Externalize base pay. How to manage it? Another challenge. And how inter-country difference? Effect HRM. And we believe this. And this is acceptable. And we accept it. We differ from each other. When we are talking about country to country. Region to regions. Or how they are affecting your HR practices? Your HR management. Let us see them. Three very important factors. The most important one is the culture factor. Economic factor. And labor cost factor. Of course it is also, it has to do with the economic factors. So let us start about culture. And as I said, this is the most important challenge. Factor, whatever you say about. When we are talking about globalization. When we are talking about international business. Culture perspective. What is this? What are the indicators? What are the parameters? What are the dimensions? And what is the difference from this? And by the way, you know what is culture, right? When we talk about the culture environment. There is language. There are religions of that area. There are values. And most of those things. Based on the value part. Remember in the beginning when we were talking about the perception. The values, the norms. So base is, the baseline is the values. And of course, your family system, your culture, all those things are affecting your values. Oskarava, the attitude, the education, the politics, and law of the country. They all affect the culture of a particular, a culture environment of a particular environment. And yes, they do matter. Because they play a very important role in your decision making. In your management. And particularly when we are talking about managing the people. So cultural environment is the key for success or failure. If you can understand it well, you can be successful. If you miss it, you fail. So we will put extra emphasis on this topic and spend more time to understand the cultural aspect of a country and how it is affecting your decisions about HR management. Dimensions of culture, when we are talking about culture. Power distance. Some culture have, they keep good distance when we are talking about different power, different levels, authorities. Similarly, individualisms. Kya individual ki worth hoti aapke culture mein different aap, usre culture mein different hogi. How you will handle the uncertainty? It again vary from culture to culture. Feministry. The female, male, gender ko ishu hai. Isko kaisi address karna hai? Kaisi people, how people behave in different cultures? How they expect from each other? That also different from culture to culture. Similarly, long term, short term orientation kya hai? What is the commitment? These all affect the human being, the people and if they are in a different cultures. Let us see some other dimensions on which culture differ. The nature of the people. Aapne bhi observe ki aoga. Even within one country, we can have different people with different nature. Aap ek region se, ek area se dhusredi mein chare jain. Nature of people will change. Onka work behavior. Especially we are talking about the work behavior. How people relate to each others? Some people are very formal, some people are very informal. How they relate with each other? That also affect your work behavior. Primary mode of activities, conception of space, how much distance you want? How important space is for you? What is your personal space? What is the privacy? All these cultural aspects affect your decisions. And time orientation. Time can be important for somebody. In some culture, time may be precious. In some culture, it might not be that much precious. So that also affect your work decisions or work for decision when we are talking about global business or international business. Impact of culture on HRM practices or IR, IHRM, International Human Resource Management or Global Human Resource Management but now we are talking about IHRM International Human Resource Management practices. How does a culture affect? There are some aspects of a culture which you can see. And you can feel it. Let's see first those aspects of culture which you can see. Dress, like this is a formal dress in our system. Whenever we go for any presentation, any discussion, any meeting, we always try to be formal. But if you look toward some western countries, they have a different approach. British colonies areas, formal dress, tie, coat, pant coat, it is essential. But if you go towards state, this is, they don't take it, the formal dress as a requirement. Dress is something you can observe, you can see and differ from culture to culture. Ishtra food, different people have different priorities about food. Some people like to eat, some people like to sing. In our subcontinent, we prefer the sweeter part. If we go to the other side, we like different kinds of food. Remember, we are talking about culture. Similarly, climate. We have different climate in the world. Pakistan, we are lucky that we have all four climates. But some countries, they might not have all different climates. Some people are very cold, some people are very hot. They are very important. And the environment of the climate is also different in your behaviour. Housing, different concept, different type of housing requirements at different places. And similarly, there are few aspects of culture. You can't see them. But they are also playing very important role when we are talking about the behaviour. And ultimately it has to come to your decision making that how you should manage the people. Because in one culture, they might be expecting something different. But people from different culture, their expectation will be different. Because in their culture, they have a different value for that. Let's see those aspects which we can't see. Like communication style. We here teach our students, our kids to be very respectful to their elder, to your boss, to your supervisor. In other culture, they might not take it serious. Here, we can't just call a person if he is elder by his or her name. If my student comes in front of me, I can't call him by his name. If my parents are father, I will call him by his name. I may not be able to understand his direct name. But if you go that way, they feel indifferent. If you will call them with respect like sir and they will feel you are expecting something from them. And that was the experience I also got when I went there. So it was very difficult for me to call my teacher with name. But that was a culture and we have to adopt it. In that culture, you have to call him by his name. Here, he is taken by misbehavior. See, how you communicate with your boss, your colleague, how you communicate with your boss. That also differs from culture to culture. What motivates people? That also differs. See, as we read in Motivation Theory, at what level? If we are talking about third world countries, of course, they will be motivated with the money, with the financial reward. Other people, of course, money is also very important for them. But they might have other motivational factors too. So it also varies from culture to culture. Apart from that, role expectations. We have different role expectations. It can be different in any other culture. What do your parents expect? That you will work hard. And what you should be expecting from your parents? That they will support you. They will provide you all those facilities. But if you look at any other country's culture, you have to earn your own living. Especially if you are above 16 years of age. See, similarly at the workplace, role expectations are different from culture to culture. Negotiation style, very different from culture to culture. Some people start negotiation and direct they will come to the point and settle it. In some other culture, they will first make it convenient that the confidence building is there and then they will start negotiation. So again, this is different. Non-verbal communication. In some cultures, in some countries, they do not focus a lot of things on non-verbal communication. But in some culture, in some other countries, this non-verbal communication play a very important role. So A B, therefore you can do it. Tempo of work. This is obvious. You can see that this culture to culture varies. How tasks are assigned, again, it varies from culture to culture. Attitude toward authorities. This also varies. As you have just understood in the communication style, I believe you accepted. Yes, the things vary from culture to culture. Why we are studying those things? Because ultimately, we have to manage people with different cultures. So if we understand, if we accept it, then it will be very easy for us to manage that. Otherwise, we will be always facing the problems. Cross-cultural differences in the workplace are related. How interview should be conducted in different cultures, with different styles? It is in some organizations very friendly. They will call you at cup of tea. They will call you at for lunch. They might have a dinner together and that is your interview. In some country, in some organization, in some culture, now it is a formal interview. You should sit very obedient in front of a board and reply. And if you argue, it can be a positive sign. He gets the guts to talk, to challenge. How managers should act with their subordinates? This is also very important. Where? Where? A very formal distance type of things. What is the relationship of managers and subordinates? But in different cultures, it is different. I hope you got the message. I will quickly go through those things. Otherwise, we will stay in the culture part. Because it is very important. How negotiation should be conducted? Did you see this palladium? How training should be delivered? Again, differ from culture to culture. How people should be paid for work? In some society, in some culture, they are getting the weekly pay. Here we are getting the monthly pay. Similarly, how much should we pay? It depends. In some places, it is a few thousand rupees. In some places, it is close to lakhs. If we do the conversion from the foreign currency, that was the culture part. What about the difference in economic systems? Did you see in the beginning what are the dimensions and what are the challenges? One was culture. Second was difference in economic systems. In free enterprise systems, free enterprise systems open business. Their efficiency is the main key, the competitive pressures. And they tend to favor HR policies that value productivity, efficiency of workers and staff cutting where market dictate. That is your right, if you think. You are not getting efficient results, you can cut down downsize your workforce. That is normal in that society. Because they have the open economic system. But in other socialist areas where they have the socialist economic system HR practices tend to shift toward preventing unemployment even at the expense of sacrificing efficiency. You cannot fire people. Because system can they prevent you to go for firing people if it has to at your cost of your own survival. Why we are discussing international human resource management? I believe now you have enough base what is international business and what is globalization and how are cultural things affecting. Now let us move back to our own subject of human resource management. Why we want to discuss it? Becoming truly global required effective management diverse international labor force. When you are thinking because every organization everybody want to go for globalization. They want to be the global organizations. And if you want to be the global organization then it requires that you should have effective management of a diverse international labor force. Now you have people with different cultures people with different expectation people with different values different norms so it is becoming more difficult but not impossible same time. So how can we define international human resource management? International HR management is a strategic integration and alignment of HR practices with business objectives to enhance firm and employee performance around the globe. So basically it is the management of managing the people around the globe think about how you would get talent in throughout. When you are coming in front of a global organization then you have all kinds of people of every culture or you know that diversity is important we have already covered that part diversity at workplace now diversity based on different culture different background different countries origin very important why it is important because now you have so much different diversify resources human resources they can create miracle for you they can bring fortune for you but same time it is putting extra pressure on you because now the managing them will be a tough job different expectations different values different norms different culture and so on so the benefits are more so we will go for benefits what is that? Global scale people different activities to HRM recruiting, selection, compensation benefits, performance management or training that will become more important and of course more challenging one for organizations let's start with you those activities and try to understand the prospect of international human resource management let's start with global HR international HR planning in deciding level of international involvement of the business HR provides information about relevant HR issues for example local market period, labor laws when you are planning you have to plan based on what? the information which you will get about the local market periods, labor laws based on that how many people you have provided if law is not restricting you of the host country how many you will hire from the local market how many you will get from the host country from parent country or from the third country and then you have to plan and decide for all facilities how many people you need so when we talk about international staffing planning come to recruitment, selection or training and development let's see about selection part when we are talking about international human resource management or global HR selection process in this we have to see host country, parent country or third country nationals then you have to decide should I go for locally hiring and for what job I have to hire and for what job you have to send your parent country it might be strategical decision right and of course people prefer to have the main key position from their own countries strategically maybe and sometime they might need a key figure from the host country to have influence in that market have a good relationship with the that market to facilitate your business it depend it vary from situation to situation similarly anticipate emotional cycle associated with foreign assignments if you are sending people abroad you should be ready for that if you are sending they might be going there but they might be facing the cultural shock part there people going to different countries for job and we have seen that they might have very strong cultural shock there they are not adjusted there in those different cultures or for them it become impossible sometime to work there or it's clearly be then when you are doing the selection you should keep in your mind that culture shock part there so before sending them make sure you have that proper training for them to observe if any kind of culture shock they are facing there skill of learning, adjustment there are another problems learning might be their language their norms values that can also affect your decision of selection or people from your own country similarly consider criteria associated with the success in working overseas competency ability to communicate verbally, non verbally in foreign country flexibility ambiguity or sensitive toward the cultural differences some people are very sensitive and they always fail big problem when working in different cultures motivation to success enjoyment about challenges how much they are willing to take the challenge willingness to learn about country's culture language, custom what about the sport from the family they don't have the sport then most of the time they will be giving you the problems selection of employees for international assignments those things are seen in different ways emphasize cultural sensitivity as selection criteria the basic thing culture is very important even if you are thinking to go in a different market understanding that culture then all your decisions should be made so that you don't have a problem because that is a different world that is going to be a different world if you are working, if you are familiar with this system that might be different or you should be ready before going there establish a selection board of expatriates so that you are aware of their experience working abroad for that it is important for those who want to select they have some experience of international abroad that is a plus point and also screening of their spouse, their families it is not like family sport is not there and family problems start coming so let's talk about HR training and development when we are talking about international human resource management consider differences when developing trainings why? because again the norms for participation language content etc that will differ from culture to culture learning it is very fast you have to go slowly learning style of some place cross culture preparation for international assignments is very essential shouldn't they need training during departure before departure about the culture, about the languages, other things and even during assignment or very important when they will return because now they might have another culture shock because they are coming back home and they are now more used for those other countries where they were working so this is again effects international assignment as part of the career path, development the training or development up international human resource management means all aspects training vary from culture to culture build those things then cross culture training is important before any international assignment or again built in those all aspects in their career path so that their career will not be blocked return they might not be lost they should benefit four step approach is to training overseas candidates let's go and see them level one the impact of culture differences and on raising trainees awareness of the such differences and their impact on the business outcomes see everywhere whatever we will talk the culture is playing very important role so level one focus should be on the impact of culture they need to increase awareness what are the differences and then what will be the impact so that is see if they don't know that they have a different negotiation style and if the person is going from this country and he or she will implement those negotiation style there they will fail and what is the relationship of boss subordinate or supervisor subordinate if one person will try to implement it for the host country from their parent country again this will be a problem first make him aware of the impact on the business and their outcomes level two training aims at getting participants to understand how attitude both negative and positive are form and how they influence behavior again pertaining to particular environment particular cultures some are your positive or negative attitudes again it vary from culture to culture in any culture a particular attitude, behavior can be seen as a positive sign secondly it can be negatively level three training provides factual knowledge about the target country detail about that country it is said that when you go to a country you should have more knowledge of that country than you will be successful it is like war see when during war they always say the person or the country they have the more knowledge about their enemy they have the more probability to win that war it is like if you are talking about your enemy now of course I am not talking about that type of enemy which we have in the borders so even in a business it is a kind of war so it should be a strategy that your enemy or your competitor where you are going you should have the maximum knowledge because the more knowledge you have the better it will be for you to perform there and have positive outcome from your business so that is the main point which we are trying to emphasize here and level four training provides skill building in areas like language adjustment and adaptation skills now you are going to a different culture different country so in that training this should be added so that the capabilities this will increase so that you can learn other language you can adjust in that new setup in the new culture not only adjust but adapt those things you should have adaptability so then this training will be effective and useful if you are going in other market what about performance management so performance appraisal performance management again it vary from culture to culture the country to country they might have different standards they might have different requirements there might be certain rules about the performance management or performance appraisal or consequences of those appraisals so let's go through them and try to understand in the global prospect in the international business when we are talking about performance management consider legal requirements local business practices and national cultures now you might have your own culture your own objectives but of course consider the requirements of course local and national consider your own host country or parent country and see what is the best performance management in another country in another culture think about what is rated and how it is rated in that particular culture in that particular society how much performance is measured norms of providing feedback sometimes it might be positive in a culture if you tell them you are doing right or you are doing wrong and in some culture it might be taken in negative thing feedback how it is done how it is effected and of course its response to improve performance basic philosophy will be the same the evaluation and developmental basically not only evaluating but of course what about compensation pay levels relative to worth of the jobs may differ across countries why? because they have a different labor market and of course again the living standard, living requirement as I gave you an example if you want to buy a house in Japan then its rent can be 100 times more than if you have to get a house in Nepal or in Pakistan so it vary from area to area in country to country here you get 10 rupees from one unit you get it in 10 dollars so accordingly you have to adjust your compensation if you are going another country and then there are legal requirements some might have very strict requirements this is the minimum wages you have to offer them according to the location pay consider company cost ability to compete similarly the competitive pressure there equity concept within the organization and outside if there is so much difference domestic and international market then you can have pressure from home country everybody will be willing to go there same time if you bring it very low outside market say that equity and this will be demoralizing demotivation factor in the center benefits maybe legal issues and expectations where in this country you have to consider the legal requirement before you should finalize your compensation so that was all about different aspects of international human resource management but why international assignments fail in the beginning people go out and they are not successful they fail why it happen carrier blockage maybe foreign thing foreign thing is giving them blocking their carrier culture shock big way some people are pruned they are not easily adaptive they don't easily adjust in new culture lack of pre-reporture cross culture training this is the responsibility of our organization pre-departure training pre-departure training in which you are familiar with culture you are trained language is done there if you have a different language rule regulation is explained to you values are told to you if it is not possible that can be one reason of failure if you are emphasizing on technical qualification only it is not only the technical qualification of course it is the human aspect too which is very important when we are talking about the cross culture working if technical side is emphasized human part is missing then you can have all those aspects culture shock and other things and then again the person will be failed and the family problem especially in our society where we have joint family system this family problem can also have a very adverse effect on your performance there and I have seen a lot of people coming back and only due to their family problems someone's parents someone's children's education someone's family is difficult to take away due to the limited resources and so on so this is also one reason that people when they go abroad and they fail their assignments now upon return now if people they have completed their assignment abroad now when they are coming back again they are facing problems whatever skill they have acquired during that outside assignments when they are coming back they are expecting that they will be given great respect but no when they are coming back they don't have the respect people don't acknowledge their extra skill which they have learned from that assignment that might be a shock for them just like when we go abroad to study they spend a lot of time there working hard to acquire extra qualification and then when they come back they are expecting that people will be waiting there they will honor them they don't even ask so this is a huge shock they are expecting something different here but they are treated normally it is their fault they shouldn't have high expectation and our system should acknowledge them if they have studied and come back with training then they should appreciate them now if they were working there getting salaries in different countries the status back home the expectation is different now they will come back back to our original Pakistani salary or whatever the status will be that status is lost poor planning for return positions that is one problem and reverse cultural shock now they are more used to that culture where they have spent some time here the system is not good road is not good whatever they call it reverse cultural shock so this also affects when people are coming back how to manage host country's employees and so far what we have discussed we have discussed and focused mainly about expatriate how to manage people outside the country and about that the activities of human resource management here but the people who are working from the host country that is also our responsibility what we have to do quickly let us see them how to manage the host country's employees let us see we have to adjust human resource practices to the norms and culture of the host country the same way similarly you have to train develop training program that are compatible with the host country's views of the education process the process of that country you have to adjust your training program similarly the compensation the third part it is the HR activities practices training and develop the compensation system that are adapted to what motivations lies in the host country according to that you will manage that now see the values of the host country according to that you have to perform there that is how the system will work I think enough let us stop it here quickly summarize because we do not have enough time now left our topic today was managing human resource in international business and how inter-country differences affect human resource management activities like cultural factor, economic factor labor cost factors why to discuss international human resource management because we have to go globally it is a global village now so that is the reason why international assignment fails if we are not prepared if we do not do the pre-departure training that is why when people go to international assignment they fail there and upon return again they have the problem it might be reverse cultural shock because they are now used to with different culture so organization need to have arrangement so that avoid all those type of cultural shocks what about next that will be the last one and we will see what we are going to discuss in one our last lecture I will stop it here but this was very important topic the global aspect and we have to realize the word is becoming global village and we have to adopt all those changes and different cultural aspect if we want to be successful so one more to go what should I tell you I will say it again work hard and then you can make the difference with these thoughts take care of yourself thank you very much