Ch2 - Areas and Scope

8/7/2019 Ch2 - Areas and Scope

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PowerPoint slides by R. Dennis Middlemist, Professor of Management, Colorado State University


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Chapter

14Human Resource Selection

and Development AcrossCultures

The specific objectives of this chapter are:

1. IDENTIFY the three basic sources that MNCs cantap when filling management vacancies in overseas

operations in addition to options of subcontracting and

outsourcing.

2. DESCRIBE the selection criteria and procedures usedby the organization and individual managers when

making final decisions.


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Chapter



3. DISCUSS the reasons why people return fromoverseas assignments, and present some of the

strategies used to ensure a smooth transition back into

the home-market operation.

4. DESCRIBE the training process, the most commonreasons for training, and the types of training that

often are provided.



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Chapter



5. EXPLAIN how cultural assimilators work and whythey are so highly regarded.



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Sources of Human Resources

MNCs can use four basic sources for filling overseas positions:

Expatriate managers who are citizens

of the country where the multinational

corporation is headquartered Sometimes called headquarters

nationals

Most common reason for using home-

country nationals, or expatriates, is toget the overseas operation under way

Home-country Nationals

(Expatriates)


(Expatriates)


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Local managers hired by the MNC

They are familiar with the culture

They know the language

They are less expensive than home-

country personnel

Hiring them is good public relations


(Expatriates)


(Expatriates)

Host-country NationalsHost-country Nationals

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Managers who are citizens of

countries other than the country in

which the MNC is headquartered orthe one in which the managers are

assigned to work by the MNC

These people have the necessary

expertise for the job


(Expatriates)


(Expatriates)


Third-country NationalsThird-country Nationals

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(Expatriates)


(Expatriates)


Third-country NationalsThird-country Nationals

InpatriatesInpatriates

Individuals from a host country or a

third-country national who are

assigned to work in the home country The use of inpatriates recognizes the

need for diversity at the home office

Use of inpats helps MNCs better

develop their global corecompetencies

MNCs can subcontract or outsource to

take advantage of lower human

resource costs and increase flexibility 9


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Selection Criteria for International

Assignments

Many criteria are used in selecting managers for overseasassignments including:

General Criteria

Education

Knowledge of local language

Motivation

Support of spouse & children Leadership

Adaptability

Independence

Self-reliance

Physical & emotional health Age

Experience

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Rank of Criteria in ExpatriateRank of Criteria in Expatriate

SelectionSelection

Adapted from Table 141: Rank of Criteria in Expatriate Selection

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Assignments

Organizations examine a number of characteristics to determine

whether an individual is sufficiently adaptable.

Work experiences with cultures other than ones own

Previous overseas travel

Knowledge of foreign languages

Recent immigration background or heritage Ability to integrate with different people, cultures, and types

of business organizations

Adaptability to CulturalChange

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Assignments

Organizations examine a number of characteristics to determine

whether an individual is sufficiently adaptable.

Ability to sense and accurately evaluate developments in thehost country

Ability to solve problems within different frameworks andperspectives

Sensitivity to differences of culture, politics, religion, andethics

Flexibility in managing operations on a continuous basisdespite lack of assistance and gaps in information


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Development of Satisfaction in HostDevelopment of Satisfaction in Host

CountryCountry

Adapted from Figure 141: Development of Satisfaction in Host Country over Time

Note: Satisfaction scale: 1 = extremely low; 7 = extremely high.

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Assignments

Those who were best able to deal with their new situationhad developed coping strategies characterized by

sociocultural and psychological adjustments including: Feeling comfortable that their work challenges can be

met

Being able to adjust to their new living conditions

Learning how to interact well with host-country nationalsoutside of work

Feeling reasonably happy and being able to enjoy day-to-day activities


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15/60Adapted from Table 142 :Activities That Are Important for Expatriate Spouses (scale: 15, 5 very important)

Activities That Are Important forActivities That Are Important for

Expatriate SpousesExpatriate Spouses

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Activities That Are Important forActivities That Are Important for

Expatriate SpousesExpatriate Spouses

Adapted from Table 142 :Activities That Are Important for Expatriate Spouses (scale: 15, 5 very important)

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Assignments

Applicants better prepare themselves for international assignments

by carrying out the following three phases:

Other Considerations

Focus on self-evaluation and general awareness

include the following questions:

Is an international assignment really for me?

Does my spouse and family support the decision togo international?

Collect general information on available job

opportunities

Phase IPhase I

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Assignments




Conduct a technical skills assessment Do I have

the technical skills required for the job?

Start learning the language, customs, and etiquette

of the region you will be posted

Develop an awareness of the culture and value

systems of the geographic area

Inform your superior of your interest in the

international assignment

Phase IPhase I

Phase IIPhase II

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Assignments




Phase IPhase I

Phase IIPhase II

Phase IIIPhase III

Attend training sessions provided by the company

Confer with colleagues who have had experience in

the assigned region

Speak with expatriates and foreign nationals about

the assigned country

Visit the host country with your spouse before the

formally scheduled departure (if possible)

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International Human Resource

Selection Procedures

Anticipatory Adjustment Training

Previous experience

In-countryAdjustment Individuals ability to adjust effectively

Ability to maintain a positive outlook, interact well withhost nationals, and to perceive and evaluate the hostcountrys cultural values and norms correctly

Clarity of expatriates role in the host management team

Expatriates adjustment to the organizational culture

Nonwork matters

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The Relocation Transition CurveThe Relocation Transition Curve

Adapted from Figure 142: The Relocation Transition Curve

Perceived Competence

Beginning of Transition Time

1. UnrealityThe feelingthat therelocation

is a dream

2. FantasiaThe feeling ofenchantment

and excitementin the newenvironment

3. InterestA deeper explorationof the environmentand a realization that

it is fundamentallydifferent from home 5. Experimentation andTesting ofNew ApproachesPractice phase trying to do thingsdifferently Feedback of results success and failure

4. Acceptance of RealityLetting go of past comfortable attitudes andrealizing you are a stranger in a strange land

6. Search for Meaning

Understanding reasons forsuccess and failure. Newmodels/personal theoriescreated 7. Integration

of NewSkillsand BehaviorAcceptance of the

new environment

1

2

3

4

5

6

7

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Common Elements of

Compensation Packages

Compensating expatriates can be difficultbecause there are many variables toconsider

Most compensation packages are designedaround four common elements:

Allowances Taxes

Base Salary Benefits

COMPENSATION PACKAGE

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Relative Cost of Living in Selected CitiesRelative Cost of Living in Selected Cities

Adapted from Figure 143: Relative Cost of Living in Selected Cities (New York = 100)

Tokyo

Oslo

Zurich

Hong Kong

CopenhagenParis

London

New York

Singapore

Stockholm

Seoul

New York = 100

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Frankfurt

Beijing

Moscow

Rome

Tel Aviv

Mexico City

Toronto

Prague

JakartaWarsaw

Kuala Lumpur

New York = 100


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Johannesburg

Bangkok

Cairo

Buenos Aires

Sao Paulo

Mumbai

New York = 100


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C El t f


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Common Elements of


Base salary Amount of money that an expatriate normally receives in the

home country

Benefits Should host-country legislation regarding termination of

employment affects employee benefits entitlements? Is the home or host country responsible for the expatriates

social security benefits?

Should benefits be subject to the requirements of the home orhost country?

Which country should pay for the benefits? Should other benefits be used to offset any shortfall in

coverage?

Should home-country benefits programs be available to localnationals?

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C El t f


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Common Elements of


Allowances

Cost-of-Living Allowance

Payment for differences between the home country and the overseas

assignment.

Designed to provide the expatriate the same standard of livingenjoyed in the home country

May cover a variety of expenses, including relocation, housing,education, taxes and hardship

Incentives

A growing number of firms have replaced the ongoingpremium for overseas assignments with a one-time,lump-sum premium

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C El t f


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Common Elements of


Taxes

Tax equalization

An expatriate may have two tax bills for the samepay

Host country

Taxes on money transferred to home country

MNCs usually pay the extra tax burden

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T il i th


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Tailoring the


Balance-sheet approach Ensure the expatriate does not lose money from the assignment

Complementary approach Negotiate to work out an acceptable ad hoc arrangement

Localization

Pay the expatriate a salary comparable to local nationals

Lump sum method give expatriate a lump sum of money

Cafeteria approach Compensation package that gives the individual a series of options

Regional system Set a compensation system for all expatriates who are assigned to

a particular region

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Individual and Host-Country Viewpoints

Individual desires Why do individuals accept foreign assignments?

Greater demand for their talents abroad than at home

Host-country desires Whom would it like to see put in managerial positions?

Accommodating the wishes of expat can be difficult: They are highly ethnocentric in orientation

They want local managers to head subsidiaries

They face high levels of performance expectations

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Quality of Life in Select MajorQuality of Life in Select Major


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Metropolises, 2002Metropolises, 2002

Adapted from Figure 14 4: Quality of Life in Select Major Metropolises 2002 (New York 100)

New York = 100

ZurichVancouver

Vienna

Sydney

Copenhagen

FrankfurtStockholm

Amsterdam

Brussels

San Francisco

TokyoParis

Singapore

40 50 60 70 80 90 100 110

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Metropolises, 2002Metropolises, 2002Madrid

New York

London

Rome

Hong Kong

Buenos Aires

Kuala Lumpur

Johannesburg

Sao Paulo

Mexico City

Shanghai

MoscowNew Delhi

Belgrade New York = 100

40 50 60 70 80 90 100 110

Adapted from Figure 14 4: Quality of Life in Select Major Metropolises 2002 (New York 100)

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Beliefs of Home CountryBeliefs of Home Country


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Beliefs of Home-CountryBeliefs of Home-Country

Organization ExpatriatesOrganization Expatriates

Adapted from Table 14 4: Beliefs of Home Country Organization Expats

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Repatriation of Expatriates

Reasons for returning to home country Most expatriates return home from overseas assignments when

their formally agreed-on tour of duty is over

Some want their children educated in a home-country school

Some are not happy in their overseas assignment Some return because they failed to do a good job

Readjustment problems

Out of sight, out of mind syndrome

Organizational changes Technological advances

Adjusting to the new job back home

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Effectiveness of Returning ExpatriatesEffectiveness of Returning Expatriates

Adapted from Figure 145: Effectiveness of Returning Expatriates

Effectiveness

Months

Backin

HomeCountr y

1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0

Low Neutral High

6 Years

5 Years

4 Years

3 Years

2 Years

1 Year

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Repatriation of Expatriates

Transition strategies Repatriation Agreements

Firm agrees with individual how long she or he will be postedoverseas and promises to give the individual, on return, a job

that is mutually acceptable

Some of the main problems of repatriation include:

Adjusting to life back home

Facing a financial package that is not as good as that overseas Having less autonomy in the stateside job than in the overseas

position

Not receiving any career counseling from the company

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Human Resource ManagementHuman Resource Management


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Human Resource ManagementHuman Resource Management

Practices in Select CountriesPractices in Select Countries

Adapted from Table 145: Human Resource Management Practices in Select Countries

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Training in International Management

Stresses nationalism and often

puts home-office people in

charge of key internationalmanagement positions

Ethnocentric MNCEthnocentric MNC

Four basic philosophic positions

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Four basic philosophic positions Places local nationals in key

positions and allows these

managers to appoint and developtheir own people


Polycentric MNCPolycentric MNC

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Four basic philosophic positions Relies on local managers from a

particular geographic region to

handle operations in and aroundthat area



Regiocentric MNCRegiocentric MNC

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Four basic philosophic positions Seeks to integrate diverse regions of

the world through a global approach

to decision making



Regiocentric MNCRegiocentric MNC

Geocentric MNCGeocentric MNC

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T i i i I i l M


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Corporate Reasons for Training Ethnocentrism

The belief that ones own way of doing things is superior tothat of others

Personal reasons To train overseas managers to improve their ability to

interact effectively with local people in general and with

their personnel in particular

Increasing numbers of training programs address social

topics these programs also focus on dispelling myths and

stereotypes by replacing them with facts about the culture

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Model for the Development of Multinational ManagersModel for the Development of Multinational Managers

O ll


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p g

Adapted from Figure 146: A Model for the Development of Multinational Managers

Feedback

Knowledge about cultural, political, economic, business, legal, and social factors of the host country Awareness of the needs and expectations of the different parties interested in international operation Awareness of the problems of family relations in the host country

Increasing effectiveness of expatriate and repatriated executives

Evaluation Effectiveness of the expatriate executives

Feedback Re-entry training

Evaluation Effectiveness of the repatriated executives

Feedback How much development?

Feedback

Review terms and conditions of assignment Increase cultural awareness Increase knowledge of the host country

Impart working knowledge of the foreign language Increase conflict management skills Minimize re-entry problems

Feedback Internal relations External relations

Family relations Relations with host government

Headquarters relations Relations with home government

Developmentmethod

Overallobjective

Desired result

Developmentmethod

Desired result

Assessment ofdevelopmentneeds

Developmentobjectives

Problemrecognition

Intermediateresult

Feedback

Orientation Area study Language

instruction Cross-cultural

group

Predeparturetraining

Behavioralsimulation

Orientation &training

Intergroup problemsolving

Case method

Postarrival training

Re-entry training

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Increasing effectiveness of expatriate and

repatriated executives

Overall Objective

Development Objectives

Problem Recognition

Return To

Slide # 44

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Internal relations

External relations

Family relations

Relations with host government

Headquarters relations

Relations with home government

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Development Method

Development Objectives

Review terms and conditions of assignment

Increase cultural awareness

Increase knowledge of the host country

Impart working knowledge of the foreign language

Increase conflict management skills Minimize re-entry problems

Return To

Slide # 44

BACK NEXT

How much development?

Assessment of

Development Needs

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Intermediate Result

Development Method

Knowledge about cultural, political, economic,business, legal, and social factors of the host

country

Awareness of the needs and expectations of the

different parties interested in internationaloperation

Awareness of the problems of family relations in

the host country

Return To

Slide # 44

BACK NEXT

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Desired Result

Intermediate Result

Predeparture training

Orientation Area study Language instruction Cross-cultural group

Behavioral simulation Case method

Postarrival training Orientation & training

Intergroup problem solving Re-entry trainingReturn To

Slide # 44

BACK NEXT

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Desired Result

How much development?

Development Method

Re-entry training

Desired Result

Effectiveness of the repatriated executives

Return To

Slide #44

BACK NEXT

Continue to the next topic

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Cross Cultural Training Programs


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Provide information about things

such as geography, climate,

housing, and schools

Cross-Cultural Training Programs

Major types of cross-cultural training programsEnvironmental BriefingsEnvironmental Briefings

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Familiarize the individual with

cultural institutions and value

systems of the host country



Cultural OrientationCultural Orientation

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Programmed learning techniques

designed to expose members of

one culture to some of the basic

concepts, attitudes, roleperceptions, customs, and values

of another culture




Cultural AssimilatorsCultural Assimilators

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Provide information about things

such as geography, climate,

housing, and schools





Language TrainingLanguage Training

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Develop attitudinal flexibility






Sensitivity TrainingSensitivity Training

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Send participant to the country of

assignment to undergo some of

the emotional stress of living and

working with people from adifferent culture






Sensitivity TrainingSensitivity Training

Field ExperienceField Experience

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Steps in cross-cultural training programs Local instructors and a translator observe the pilot training

program or examine written training materials

Educational designer debriefs the observation with the translator,curriculum writer, and local instructors

The group examines the structure and sequence, ice breaker,and other materials to be used in the training

The group collectively identifies stories, metaphors, experiences,and examples in the culture that fit into the new training program

The educational designer and curriculum writer make necessary

changes in training materials

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A variety of other approaches can be used toprepare managers for internationalassignments including: Visits to the host country

Briefings by host-country managers In-house management programs

Training in local negotiation techniques

Analysis of behavioral practices that have proven

most effective

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Contingency Approach to Cross-Cultural TrainingContingency Approach to Cross-Cultural Training


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Adapted from Figure 147: A Contingency Approach to Cross-Cultural Training

LOW MODERATE HIGHDegree of Integration

L

OW

Leve

lofRigor

HIGH

Length ofTraining

12 Months+

14 Weeks

Less than a

Week

HIGH

LOW

Cross-Cultural Training Approach

Length of Stay 1 Month or less 2-12 Months 1-3 Years

Affective

Approach

ImmersionApproach

InformationGiving

Approach

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Types of Training Programs


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Types of Training Programs

The Global Leadership Program (GLP) A consortium of leading U.S., European, and Japanese

firms, global faculty, and participating host countries Provide an intensive international experience

Develop a global mindset

Instill cross-cultural competency

Provide an opportunity for global networking

Global LeadershipDevelopment

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Tichy Development MatrixAdapted from Figure 148: The Tichy Development Matrix

Deep SuperficialHigh Risk Low RiskLong Time Little Time

Depth of Change


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Adapted from Figure 14 8: The Tichy Development Matrix

Organization

Individua

l

Pair

Team

Deep High Risk Long

Time

Superficial Low Risk Little

Time

Target of Change

Long Time Little Time

D

eveloping

Fu

ndamenta

lChange

D

eveloping

New

Problem-

Solving

Approaches

D

eveloping

Skills

Developing

Cognitive

Understandi

ng

D

eveloping

A

wareness

RequiredApproach

ActionLearning

CurrentApproachOld Way

EmergingTrend

Ch2 - Areas and Scope

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