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Questions and Answers
What are the main approaches to staffing policy within international businesses?
What are the main approaches to staffing policy within international businesses?
What are some advantages of the ethnocentric staffing policy?
What are some advantages of the ethnocentric staffing policy?
Alleviates a shortage of qualified personnel, infuses subsidiaries with corporate culture, transfers special know-how.
What is expatriate failure?
What is expatriate failure?
The premature return of an expatriate manager to the home country due to poor performance.
U.S. firms have lower expatriate failure rates than European firms.
U.S. firms have lower expatriate failure rates than European firms.
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The process of reintegrating the expatriate into the home country is called ___ .
The process of reintegrating the expatriate into the home country is called ___ .
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Which of the following is NOT a component of an expatriate compensation package?
Which of the following is NOT a component of an expatriate compensation package?
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Cultural training programs can help lessen the effects of culture shock.
Cultural training programs can help lessen the effects of culture shock.
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Match the following staffing policies with their description:
Match the following staffing policies with their description:
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What are the two key compensation issues mentioned?
What are the two key compensation issues mentioned?
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What can organized labor do to international businesses?
What can organized labor do to international businesses?
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Study Notes
Human Resource Management
- Human resource management refers to the activities an organization carries out to utilize its human resources effectively.
- These activities include: • Determining the firm's human resource strategy • Staffing • Performance evaluation • Management development • Compensation • Labor relations
- Firms need to ensure there is a fit between their human resources practices and strategy.
Human Resource Management in International Companies
- HRM is more difficult in international companies because of: • Environmental differences • Strategic contingencies • Organizational challenges
Staffing Policy
- A firm's staffing policy is concerned with the selection of employees who have the skills required to perform a particular job.
- There are three main approaches to staffing policy within international businesses: • Ethnocentric approach • Polycentric approach • Geocentric approach
Ethnocentric Staffing Policy
- The ethnocentric approach to staffing fills key management positions with parent-country nationals.
- Advantages: • Alleviates a shortage of qualified personnel in the host country • Infuses subsidiaries with the corporate culture and helps control local decisions • Transfers special know-how or core competencies to a foreign operation
- Disadvantages: • Relocating home-country managers is expensive • Gives the business a “foreign” image
Polycentric Staffing Policy
- The polycentric approach recruits host country nationals to manage subsidiaries in their own country, and parent country nationals for positions at headquarters.
- Advantages: • Minimizes cultural myopia • Less expensive to implement than an ethnocentric policy
- Disadvantages: • A multinational company may grow to resemble a collection of national businesses • A gap can form between host country managers and parent country managers
Geocentric Staffing Policy
- The geocentric approach seeks the best people, regardless of nationality, for key jobs and manages operations abroad.
- Advantages: • Enables the firm to make the best use of its human resources • Develops global managers who can easily adjust to any business environment • Removes nationalistic barriers among managers within a subsidiary or between subsidiaries in different nations
- Disadvantages: • Can be limited by immigration laws • Costly to implement
Recruiting Human Resources
- Recruitment is the process of identifying and attracting qualified applicants for vacant positions.
- Sources of recruitment: • Current employees • Recent college graduates • Local managerial talent • Non-managerial workers
Selecting Human Resources
- Selection involves screening and hiring the best-qualified applicants with the greatest performance potential.
- Key considerations: • Ability to bridge cultural differences • Adaptability to new ways of life • Cultural sensitivity of job candidates
Expatriate Failure
- Expatriate failure is the premature return of an expatriate manager to the home country.
- Reasons for failure: • Poor performance • Cultural differences
- Costs of failure: • Between 250,000and250,000 and 250,000and1 million • High failure rates in developed and developing countries
Cultural Shock and Reverse Cultural Shock
- Cultural shock is a psychological process affecting people living abroad, characterized by homesickness, irritability, confusion, and depression.
- Reverse cultural shock is the psychological process of readapting to one's home culture.
- Companies may offer reorientation programs and career-counseling sessions to help expatriates deal with reverse cultural shock.
Managing Expatriates
- Repatriation is the process of reintegrating the expatriate into the home country upon completion of the foreign assignment.
- Challenges: • Work-related problems • Financial problems • Social problems
- The challenge is to find the right job for the returning manager.
Compensation
- Two key issues on compensation:
- How to adjust compensation to reflect differences in economic circumstances and compensation practices
- How to pay expatriate managers
National Differences in Compensation
- Substantial differences in executive compensation across countries
- Question: Should pay be equalized across countries?
- Many firms have moved toward a compensation structure based on global standards, especially in firms with a geocentric staffing policy.
How Should Expatriates Be Paid?
- Most firms use the balance sheet approach to equalize purchasing power across countries.
- Compensation package has five components:
- Base salary
- Foreign service premium
- Various allowances (hardship, housing, cost-of-living, education)
- Tax differentials
- Benefits (medical and pension)
International Labor Relations
- Question: Can organized labor limit the choices available to an international business?
- Labor unions can limit a firm's ability to pursue a transnational or global strategy
- HRM needs to foster harmony and minimize conflict between management and organized labor.
Concerns of Organized Labor
- Organized labor is concerned that:
- Multinationals can counter union bargaining power by threatening to move production to another country
- Multinationals will farm out only low-skilled jobs to foreign plants, making it easier to switch production locations
- Multinationals will import employment practices and contractual agreements from their home countries, reducing the influence of unions
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Description
This quiz covers the activities an organization carries out to utilize its human resources effectively, including determining human resource strategy, staffing, performance evaluation, and more.
