20 Questions
What is the key aspect that companies must ensure when sending managers to foreign placements?
a fair distribution of compensation packages commensurate with the various duties performed abroad
What is the term often referred to as the additional payments made to managers for relocation efforts?
Foreign Service Premium
What are the three mindsets that drive the recruitment of expatriate managers?
ethnocentrism, polycentrism, and geocentrism
What are the four dimensions used to establish a global mindset in expatriate managers?
self-orientation, others-orientation, perceptual ability, and cultural toughness
What is one of the main reasons for the failure of foreign placements?
spouses having problems adapting to the new environment
What are the four instruments supporting international human resource management?
selection process, training and management development, performance assessment, and compensation
Why is it essential to include spouses and children in the selection and training process?
to ensure their adaptation to the new environment and to prevent family problems
What is the goal of management development in international human resource management?
to establish strong internal networks and develop a team of internationally employed managers
What type of allowance is provided to cover higher living costs in a foreign placement?
living cost allowance
Why do organizations obtain data on purchasing power in a foreign placement?
to estimate the standard living costs in the placement
How do companies ensure that expatriate managers' living costs are covered in foreign placements?
Companies use data on purchasing power to estimate the standard living costs in a placement and provide allowances to cover higher living costs.
What is the significance of the Foreign Service Premium in expatriate compensation packages?
The Foreign Service Premium is a payment made to managers for relocation efforts, ensuring that they receive a fair distribution of compensation commensurate with their duties abroad.
How do companies address the issue of tax compensation in expatriate packages?
Companies offer tax compensation to ensure that managers' income and insurance coverage are equivalent to what they would have in their home country.
What is the purpose of the hardship allowance in expatriate compensation packages?
The hardship allowance is provided to managers who are placed in areas with difficult health and/or safety conditions.
Why is it essential to consider the cultural and social environment of the foreign duty station in the selection and training process?
Considering the cultural and social environment of the foreign duty station is essential to ensure that managers are prepared to adapt to the new environment and perform their duties effectively.
What is the primary objective of management development in international human resource management?
The primary objective of management development is to establish strong internal networks and develop a team of internationally employed managers who help transfer the organization's culture to the foreign subsidiaries.
How do companies typically estimate the cost of living in a foreign placement?
Companies typically obtain available data on purchasing power from sources such as the German Statistisches Bundesamt to estimate the standard living costs in a placement.
What is the significance of including spouses and children in the selection and training process?
Including spouses and children in the selection and training process helps to ensure that they adapt to the new environment, reducing the risk of family problems and early termination of the manager's contract.
Why is it important for companies to consider the specific requirements for expatriate managers?
Considering the specific requirements for expatriate managers helps to ensure that they have the necessary skills, knowledge, and personal characteristics to succeed in their roles.
What is the primary reason why companies provide education allowances to expatriate managers?
Companies provide education allowances to cover children's school fees, recognizing the additional expenses associated with educating children in a foreign country.
Study Notes
International Human Resource Management
- International human resource management is concerned with an organization's activities, procedures, and structures that help to employ workforces effectively.
- In international operations, human resource management is challenging due to differences in:
- Labor markets
- Culture
- Legal systems
- Economic systems
Expatriate Managers
- An expatriate manager is a citizen of one country who is working abroad in one of the firm's subsidiaries.
- Expatriate managers require a 'global mindset' to cope with multifaceted challenges, which includes:
- Complex cognitive abilities
- Cosmopolitan perspective
Characteristics of Expatriate Managers
- Four dimensions of successful expatriate managers:
- Self-orientation (self-esteem, self-confidence, mental wellbeing)
- Others-orientation (ability to connect with local staff and stakeholders)
- Perceptual ability (ability to understand and appreciate foreign cultures)
- Cultural toughness (ability to adapt to foreign cultures and cope with challenges)
Reasons for Expatriate Failure
- Early termination of the contract and return to the home country
- Causes of expatriate failure:
- Nationality of expatriate managers
- Problems of spouses in adapting to the new environment
- Family issues
- Manager's inability to fit into the new environment
- Lack of competence with regards to new role and responsibilities
- Personal issues
Instruments in International Human Resource Management
-
Selection process:
- Assessing the four dimensions of the global mindset
- Psychological testing
- Including spouses and family members in the assessment
-
Training and management development:
- Cultural training (understanding the host country's culture)
- Language training (basic knowledge of the local language)
- Practical training (addressing specific needs associated with an expatriate posting)
-
Performance assessment:
- Evaluating the manager's performance in the new environment
- Considering the challenges of the host country
-
Compensation:
- Considering the costs of expatriate failure
- Offering competitive packages to attract and retain expatriate managers### Challenges of Expatriate Managers
-
Expatriate managers face challenges adapting to a new environment, including finding housing, registering children in schools, and obtaining residence and employment permits.
-
Familiarizing themselves with the geographical surroundings is crucial to feeling at home in the new location.
-
Companies should try to integrate managers and their families into existing expatriate networks for support and valuable information.
Management Development
- Management development, also known as developing a global mindset, helps build strong networks across national borders and transfers the organizational culture to various subsidiaries.
- This process involves rotating managers from one country to another and regularly organizing meetings between managers from different countries.
- The exchange of ideas and experiences contributes to a shared knowledge base.
Repatriation
- Repatriation can be even more challenging than expatriation, as managers may face difficulties readapting to their home country.
- Companies should plan both expatriation and repatriation carefully, ensuring a smooth transition for managers.
- Returning managers should be reintegrated into their previous work environment, with clear roles assigned before the expatriation process starts.
Performance Assessment
- Assessing a manager's performance in international operations is difficult due to multifaceted influences on business activities in foreign countries.
- 360-degree feedback programs can help gather appraisals from various sources, but cultural differences must be considered.
- Home country managers may lack insight into the political, social, and economic landscape of a foreign market, leading to incorrect evaluations.
Compensation
- Calculating the remuneration of expatriate managers is complex, involving a basic salary, Foreign Service Premium, and additional allowances.
- Companies must consider factors like living costs, housing, and education expenses, as well as tax compensation and benefits.
- Data on purchasing power is often used to estimate standard living costs in a placement.
International Human Resource Management
- International human resource management is concerned with an organization's activities, procedures, and structures that help to employ workforces effectively.
- In international operations, human resource management is challenging due to differences in:
- Labor markets
- Culture
- Legal systems
- Economic systems
Expatriate Managers
- An expatriate manager is a citizen of one country who is working abroad in one of the firm's subsidiaries.
- Expatriate managers require a 'global mindset' to cope with multifaceted challenges, which includes:
- Complex cognitive abilities
- Cosmopolitan perspective
Characteristics of Expatriate Managers
- Four dimensions of successful expatriate managers:
- Self-orientation (self-esteem, self-confidence, mental wellbeing)
- Others-orientation (ability to connect with local staff and stakeholders)
- Perceptual ability (ability to understand and appreciate foreign cultures)
- Cultural toughness (ability to adapt to foreign cultures and cope with challenges)
Reasons for Expatriate Failure
- Early termination of the contract and return to the home country
- Causes of expatriate failure:
- Nationality of expatriate managers
- Problems of spouses in adapting to the new environment
- Family issues
- Manager's inability to fit into the new environment
- Lack of competence with regards to new role and responsibilities
- Personal issues
Instruments in International Human Resource Management
-
Selection process:
- Assessing the four dimensions of the global mindset
- Psychological testing
- Including spouses and family members in the assessment
-
Training and management development:
- Cultural training (understanding the host country's culture)
- Language training (basic knowledge of the local language)
- Practical training (addressing specific needs associated with an expatriate posting)
-
Performance assessment:
- Evaluating the manager's performance in the new environment
- Considering the challenges of the host country
-
Compensation:
- Considering the costs of expatriate failure
- Offering competitive packages to attract and retain expatriate managers### Challenges of Expatriate Managers
-
Expatriate managers face challenges adapting to a new environment, including finding housing, registering children in schools, and obtaining residence and employment permits.
-
Familiarizing themselves with the geographical surroundings is crucial to feeling at home in the new location.
-
Companies should try to integrate managers and their families into existing expatriate networks for support and valuable information.
Management Development
- Management development, also known as developing a global mindset, helps build strong networks across national borders and transfers the organizational culture to various subsidiaries.
- This process involves rotating managers from one country to another and regularly organizing meetings between managers from different countries.
- The exchange of ideas and experiences contributes to a shared knowledge base.
Repatriation
- Repatriation can be even more challenging than expatriation, as managers may face difficulties readapting to their home country.
- Companies should plan both expatriation and repatriation carefully, ensuring a smooth transition for managers.
- Returning managers should be reintegrated into their previous work environment, with clear roles assigned before the expatriation process starts.
Performance Assessment
- Assessing a manager's performance in international operations is difficult due to multifaceted influences on business activities in foreign countries.
- 360-degree feedback programs can help gather appraisals from various sources, but cultural differences must be considered.
- Home country managers may lack insight into the political, social, and economic landscape of a foreign market, leading to incorrect evaluations.
Compensation
- Calculating the remuneration of expatriate managers is complex, involving a basic salary, Foreign Service Premium, and additional allowances.
- Companies must consider factors like living costs, housing, and education expenses, as well as tax compensation and benefits.
- Data on purchasing power is often used to estimate standard living costs in a placement.
This quiz covers the challenges and strategies of managing a workforce in international operations, including cultural, labor market, and legal differences.
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