10.3 Defining the Countries
Overview of International Projects
International companies are different from domestic companies because of the cultural, regulatory, social, geographical, reporting, and infrastructural diversity. Human Resources Managers need to understand the best practices for international companies. There are critical issues to think about related to communication, legal, and political factors. As well, most Human Resources Managers managing international projects have special skills and competencies.
These managers have a different set of expectations than domestic managers. Some managers will only manage international employees, while other managers may be the person to move to a different county. If they leave their home country, they need to leave their homes, leave their families and friends, learn and speak a foreign language, abide by a different culture and laws, and experience extensive travel.
Defining the Countries
- Home Country and Home Country Nationals: Country where the corporate headquarters is located. The manager and, possibly the Human Resources team, would leave the home country for an international subsidiary. Example: The corporation is in Canada. The project team leaves the Canadian company and country.
- Host Country and Host Country Nationals: Refers to a foreign country where the corporation invests. The manager and perhaps the team relocate to the host country (foreign country). Host country nationals are employees who are native to the country, and work and live in their home country. Example: Team goes to India from Canada to work and live. A host country national would be a team member who is native to India.
- Third Country National: Manager and team who are not from the home country or the host country. However, work for the corporation. Example: Saudi Arabian manager working for a New Zealand subsidiary of a Chinese owned corporation.
HR in Focus: International Human Resources Management (IHRM) and Project Management
Human Resources works closely with international subsidiaries and the other Managers and employees. The complexities of international companies include more activities and responsibilities than domestic companies.
Expatriates are the employees who have been hired to work temporarily in a foreign country. They are also called international assignees. The Human Resources Manager and the team members are considered expatriates, sometimes called “expats” for short.
Differences between Domestic and International Human Resources Involvement:
| Domestic Human Resources | International Human Resources |
|---|---|
| HR Planning | HR Planning |
| Recruitment and Selection | Recruitment and Selection |
| Performance Management | Performance Management |
| Training and Development | Training and Development |
| Compensation | Compensation |
| Industrial/Employee Relations | Industrial/Employee Relations |
| A broader perspective of the world | |
| More involvement in the employee’s lives | |
| Risks for the employees | |
| Change in attitude about expatriates (home country workers) and local workers | |
| Taxes at an international level for compensation | |
| International relocation and orientation | |
| Foreign country human relations | |
| Language translation and training | |
| Administration for expatriates | |
| Arranging training (pre, during, post assignment) | |
| Help with immigration and travel |
Human Resources Specialists work with the organization at the strategic level for international projects, or they may be assigned to the subsidiary. It is important that everyone involved in an international company understand the environmental factors.
Environmental Factors Affecting International Projects
- Legal and Political: Expatriates need to work within the laws and regulations of the host country. The political stableness of the country affects how companies conduct themselves.
- Economic: The gross national product (GDP) of a country tells the organization the level of development of a country. Financial stability is important to success. When there are risks for the company, a strong risk management plan needs to be in place.
- Security: International acts of terror are a reality today. Crime is another issue. Risk management plays an important role here as well when a company expands in a foreign country. Sometimes managers experience ethical issues related to security. Two most frequent ethical issues are bribery and corruption. Security precautions need to be in place to keep all employees safe.
- Geography: The planning of a company expansion in a different country needs to take into consideration the geography of the country. The organization needs to look at the weather (rain, freezing temperatures, very hot temperatures, jungles, deserts). Sleep issues can arise for employees with too much daylight, or not enough day light. Extreme weather can play havoc with equipment as well.
- Culture: All employees visiting another country must respect the values, customs, traditions, social standards, and beliefs of the people of the foreign country. If these are not observed by the employees, there is a likelihood of failure. Language differences can become a problem. If a manager and team do not speak the foreign language, it is difficult to communicate; and words get lost in translation. Sometimes, managers will work with people from the foreign country. Language and cultural skills are necessary for success. Culture affects all human resources areas including recruitment and selection, training, and compensation.
- Infrastructure: This pertains to the foreign country’s capacity to supply the services that are necessary for the employees. Some of these could include telecommunication, power, technology, transportation systems, and education facilities.
HR in Focus: Human Resources and Environmental Factors
Given the challenges with international expansions, it is important to ensure the employees are well prepared for the assignment. Human Resources would be involved at the strategic level along with stakeholders to review the environmental factors before a project was selected. Stakeholders are the people involved in the project and have a stake in the outcome of the project. They have authority and influence over the project. They include Presidents, executive teams, financial personnel, project managers, any team members involved, customer, resource managers, and human resources. They may provide training for the stakeholders in the environmental factors before the selection is made. When the team is hired, again, the Human Resources Specialists need to convey (generally through training) the environmental factors that will affect the foreign assignment of the project. When it is the Human Resources Manager and HR team that moving to the foreign country, all the same considerations are made.
“11.3 Defining the Countries” from Human Resources Management – 3rd Edition by Debra Patterson is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.
