Edgar Shein's theory : Onion Theory

  Edgar Henry Schein(born March 5, 1928), a former professor at the MIT Sloan School of Management, has made a notable mark on the field of organizational development in many areas, including career development, group process consultation, and organizational culture.

Artefacts and symbols

• Artefacts mark the surface of the organization. They are the visible elements in the organization such as 

1. logos, 
2. architecture, 
3. structure, 
4. processes and 
5. corporate clothing. 

• These are not only visible to the employees but also visible and recognizable for external parties.

Espoused Values

• This concerns standards, values and rules of conduct. 
• How does the organization express strategies, objectives and philosophies and 
• how are these to made public? Problems could arise when the ideas of managers are not in line with the basic assumptions of the organization.

Basic underlying assumptions

• The basic underlying assumptions are deeply embedded in the organizational culture and are experienced as self-evident and unconscious behaviour. Assumptions are hard to recognize from within.
• They provide the key to understanding why things happen the way they do. These basic assumptions form around deeper dimensions of human existence  such as the human nature,human relationship and activity, reality and truth.

One artifact which I feel important and interesting

Global resource management :  

Before I thought there would not be significant difference in theories of domestic human resource management and global human resource management but when I searched and go through lots of theories and comparison between both of this there are lots of different key and theories.

It refers to the activities an organization carries out to use its international human resources effectively.

These activities include:

1.Determine firm’s HR strategy

2.Staffing

3.Performance Evaluation

4.Management Development

5.Compensation

6.selations

         

Several key factors make Global HRM different from domestic management:

1. Different labour markets
2. Mobility problems: legal, economic, cultural barriers
3. Different management styles
4. Varied compensation practices
5. Labour laws.

This artifact which deepened my understanding of theory :(Of course hofstede theory of cultural dimension)

• If we plan to do business with any international company this theory of hofstede would be more important when two person are from different culture and with different ideas and How will they behave ,How they should and how to leave a positive impact on them those all are important and which is very well explained by hofstede in his cultural dimension theory
• For example, If two persons meet for business meeting from different culture they do not know each other cultural value . If meeting with a female one can feel awkward like Japan they have very high which is 95 so I do not think they would like to deal with a female business partner because their cultural value and considerations.
• All in all, Hofstede theory is very significant to understand for a international entrepreneur and important to make a final or agreement.

Philosophy of International resource management:

IHRM is the methods of :

1. selecting,
2.  allocating,
3. utilising human resources effectively 
4. hiring 
5. compensation, 
6. organization development,
7.  performance management, 
8. wellness, 
9. safety,
10.  benefits, 
11. employee motivation, 
12. training,
13.  administration, and 
14. communication at an international context.

• International human resource management functions cover many different activities related to a business organization’s employees and contractors. 
• The first and most important is the staffing needs of the company whether staff members are company employees or outside contractors. 
• Other functions include recruiting and training employees, ensuring that they are performing at expected levels or better, handling performance issues and making certain that personnel and management policies conform to laws and regulations.
•  IHR management is also involved in how the company manages employee compensation and benefits, employee records and personnel policies and practices.
• They have to build integration among HR practices and policies of its subsidiary firms in different territory in order to achieve overall organisational objectives.  
  Because of the forces of globalisation and the demand of the organisations to develop and implement a strong global strategy, International Human Resource Management (IHRM) is becoming a prerequisite to success of the organisational.
• On the other hand, these organisations also ensure a significant level of flexibility in their IHRM strategy because employees from different countries are backed by different cultures and social values. Flexibility has a significant influence on the performance of the employees.

One artifact which I feel challenging and want to research more about it :

International compensation methods:

This has also a significant role in International human resource because in global business employee rewards ,their incentives and all important to give them a satisfactory salary as per their designation. 

There are two renowned methods :

1.  Balance sheet approach(also called home based approach )
2. Going rate approach(Host based approach)

Balance sheet is more popular in this over all but It is also more complex to design and It depends on the taxation and other expenses of the employee so It is easily accepted methods for IHR manager and for expatriates ,yet, It is very complex to design

and that is the reason why I felt it difficult to understand and I would like to know more about this in detail because I need to know what will my steps If I will be a International human resource manager. 

International employee compensation approaches

Its main idea is to maintain the expatriate’s standard of living throughout the assignment at the same level as it was in his/her home country. In other words, it is about ensuring the same purchasing power, which helps to maintain the home country’s lifestyle.

Ø  Home-country salary shows the basic level of each category at home.

Ø  Assignment-location costs indicate that expenditures for income taxes, housing, and goods and services are typically higher abroad.

Ø  Assignment-location costs paid by employer and from salarydemonstrates that expatriates pay the same amount as their domestic counterparts, with the employer making up the difference, as indicated by the shaded portion of each category.

Ø  Home-country equivalent purchasing power illustrates that expatriates have the same purchasing power as typical domestic peers, and may also receive incentives.

Balance sheet approach exmple

Going rate approaches:

Ø  the going rate approach, which is also known as the ‘localization’, ‘destination’ or ‘host country-based’ approach

Ø  in this method, the base salary for international transfer is linked to the salary structure in the host country.

Example: A Indian bank operating in London use local British salaries, the salaries other Indian competitor banks in London or the average salary offered by all foreign

banks operating in London as the reference point for the base

salary offered

EPRG Model of International Human Resource Management

Ethnocentric Employment

Recruitment and Selection

An ethnocentric company assumes that the host country will be unable to supply skilled labor. Although it will recruit local people for low-level positions, an ethnocentric company will reserve skilled positions and managerial roles for employees from its home country

Employee Development

Ethnocentric companies usually fill senior roles with expatriate employees from their home nations, often on short-term assignments. They are unlikely to offer management training or high-level technical training to nationals from the host country; this limits the ability of local people to progress into promoted posts.


Polycentric Employment

• The polycentric approach uses natives of the host country of a business to manage operations within that country and natives of the parent country to manage at headquarters.  
• In this situation, host country managers rarely advance to corporate headquarters since natives of the parent country are preferred by the company as managers at that level.  This approach is advantageous since locals manage in the countries for which they are best prepared.  It is also cheaper since locals, who require few, if any, incentives are readily available and generally less expensive to hire than others. 
•  The polycentric approach is helpful in politically sensitive situations because the managers are culturally sensitive locals, not foreigners.  Further, the polycentric approach allows for continuity of management.

•          The polycentric approach has several disadvantages.  One disadvantage is the cultural gap between the subsidiary managers and headquarters managers.  If the gap is not bridged, then the subsidiaries any function too independently.  
• Another disadvantage is limited opportunities for advancement.  Natives of the host countries of the host countries can only advance within their subsidiaries, and parent country natives can only advance within company headquarters. 
•  The result is that company decision makers at headquarters have little or no international experience.  Nevertheless, their decisions have major effects on the subsidiaries.

• Regiocentric Employment The regiocentric approach uses manager’s form various countries within the geographic regions of a business. Although the mangers operate relatively independently in the region, they are not normally moved to the company headquarters. 
•  The regiocentric approach is adaptable to fit the company and product strategies. When regional expertise is needed, natives of the region are hired. IF product knowledge is crucial, then parent- country nationals who heave ready access to corporate sources of information can be hired. One shortcoming of the regiocentric approach is that managers form the region may not understand the headquarters view. Also, corporate headquarters may not employ enough managers with international experience. This could result in poor decisions.

Geocentric Employment

• The geocentric approach uses the best available a mangers for a business without regard for their country of origin.  The geocentric company should have a worldwide strategy of business integration.  The geocentric approach allows the development of international managers and reduces national biases.
•          On the other hand, the geocentric approach has to deal with the fact that most governments want businesses to hire employees from the host countries.  Getting approval for nonnatives to work in some countries is difficult or impossible.  Implementing the geocentric approach is expensive.  It requires substantial training and employee development and more r5elocation costs.  It also requires more centralization of human resource management and longer lead times before employees can be transferred because of the complexities of worldwide operation.