DEVELOPMENT DIMENSIONS INTERNATIONAL

By

Sheila M. Rioux, Ph.D.

Paul R. Bernthal, Ph.D.

Richard S. Wellins, Ph.D.

The Globalization of

Human Resource

Practices Survey

Report

The Globalization of Human Resource Practices Survey ReportBy Sheila M. Rioux, Ph.D., Paul R. Bernthal, Ph.D., and Richard S. Wellins, Ph.D.

HR Benchmark GroupIssue 1 (Vol. 3)June 2000

About the HRBenchmark GroupBecause Development Dimensions International(DDI) understands how difficult it is to keep up withthe changing face of human resources, we keep trackof new trends in order to keep our clients as well asthe industry in general informed. Our clients, inparticular, frequently ask us for benchmarking dataand thought leadership on issues such as leaderdevelopment, advanced learning technology,performance enhancement, workforce effectiveness,selection, promotion, and succession management.

In addition to our established methods for trackingsuch trends, we began the DDI HR BenchmarkGroup. The group is an alliance of organizationscommitted to sharing information and benchmarkingcurrent HR practices. These organizations, aninternational mix of DDI clients and non-clients,have agreed to respond to periodic surveys in orderto provide current information in various areas ofhuman resources. The organizations represent ageographical and industry cross section.

Participation allows organizations in this alliance toprovide current data through our surveys, to receivethe results, and to help us choose future surveytopics. The approach is systematic and easy, andresponse and interest have been outstanding.

Other Benchmark ReportsVolume 1: 1997–1998

Issue 1—A Survey of Trust in the Workplace

Issue 2—Performance Management PracticesSurvey Report

Issue 3—Workforce Development PracticesSurvey Report

Issue 4—Job/Role Competency PracticesSurvey Report

Volume 2: 1998–1999

Issue 1—Succession Management PracticesSurvey Report

Issue 2—Recruitment and Selection PracticesSurvey Report

Special Reports

Global High-Performance Work Practices: ABenchmarking Study (1998)

The Leadership Forecast: A BenchmarkingStudy (1999)

To order previous or additional reports, call:

1-800-DDI-1514(1-800-334-1514)

For more information contact:

Paul Bernthal, Ph.D.ManagerHR Benchmark GroupDevelopment Dimensions International1225 Washington PikeBridgeville, PA 15017Phone: 412-257-7533Fax: 412-220-5204E-mail: hrbench@ddiworld.com

contents

Survey Report.......................................................................................... 1

Purpose ..........................................................................................................1

Definition ........................................................................................................1

General Profile................................................................................................2

HR Priorities....................................................................................................3

Consistency of HR Practices .........................................................................5

Challenges to Consistency ............................................................................6

Creating a Corporate Culture .........................................................................8

General Challenges for the Global HR Function .........................................10

International Assignments ...........................................................................11

The Global Picture........................................................................................14

Appendix ............................................................................................... 15

Respondent Profile ......................................................................................15

Table 1: Regions

Table 2: Contact’s Position

Table 3: Industry

Table 4: Industry Revenue

Table 5: Type of Employees

Table 6: Number of Employees

Respondent Organizations ..........................................................................16

© Development Dimensions International, Inc., MM. Pittsburgh, Pennsylvania. All rights reserved under U.S., International, and UniversalCopyright Conventions. Reproduction in whole or part without written permission from DDI is prohibited.

1

surveyreport

The Globalization of Human Resource Practices Survey ReportBy Sheila M. Rioux, Ph.D., Paul R. Bernthal, Ph.D., and Richard S. Wellins, Ph.D.

The key to creating a consistent corporate culture across multiplelocations is maintaining the critical balance between a strongcorporate culture and local cultural differences.

PurposeThe objectives of this study were to:

r Investigate how domestic and internationalcompanies conduct human resource (HR)practices around the world.

r Determine the top HR priorities for eachorganization type.

r Determine the challenges that organizations facewhen trying to globalize their HR function andpractices.

r Determine what organizations are doing toinstitute a consistent corporate culture across alllocations/offices.

DefinitionThis report examines the changing roles of thehuman resource function in a globally competitivemarketplace and identifies the challenges of adaptingto these roles. Among the organizations thatresponded to the survey, some operate almostexclusively in one country; others, in multiplecountries.

The process of globalization for an organizationoccurs along a continuum without clear distinctionsbetween phases. Although many have tried toclassify the various phases, distinguishing whereorganizations fall along this continuum can bedifficult. Thus, in this report all organizationsoperating in multiple countries are characterized as“international,” regardless of their level ofglobalization. This categorization scheme fits ourpurposes, in that our main goal was not to compareand contrast organizations in different phases of theglobalization process, but to gain a betterunderstanding of HR issues facing companiesoperating in multiple geographic and culturalenvironments.

Some terms used throughout this study are:

HR practices: The primary responsibilities of thehuman resource function within an organization (e.g.,training, development, selection, compensation).

Locations/Offices: Geographically distinct facilitieswhere business is conducted (e.g., headquarters,regional offices, international offices, local offices).

Corporate culture: An organization’s sharedexperiences, values, and beliefs, including itspreferred methods of doing business and dealingwith employees.

2

General ProfileA total of 206 HR Benchmark Group memberorganizations responded to a questionnaire about theglobalization of HR practices. Two-thirds of therespondent organizations classify themselves asinternational; the remaining third, as domestic, oroperating primarily in one country (see Figure 1).

Figure 1. Percentage of organizations that classify themselvesas domestic and international.

International66%

Domestic34%

General Finding: HR globalization is characterizedby increasing levels of decentralization.

In describing how their HR departments arestructured, international organizations indicate thatthere was some degree of both centralization anddecentralization. Half of these organizationsreported having one primary HR department withindependent regional HR staff (see Figure 2). Thisdecentralized structure allows regional HR offices tocontrol their own HR functions. Only 19 percent ofdomestic companies reported organizing their HRfunction this way. A large number of international

(37 percent) and domestic (42 percent) companies,however, reported that they used a more centralizedapproach—one primary HR department withdependent regional HR staff. In this structurecorporate HR is responsible for developingpractices, and regional HR staff carry out thecorporate practices at their locations. Domesticcompanies reported having the most centralizedapproach to the HR function. More than a thirdreported having only a primary HR department withno regional HR staff. In this structure corporate HRis responsible for implementing HR policies andprocedures in all locations/offices.

Figure 2. How international and domestic organizationsorganize the HR function.

1 PrimaryHR Department w/

Independent Regional Staff

19% Domestic 50% International

RegionalHR Staff Only

0% Domestic4% International

1 Primary HR Department

35% Domestic5% International

1 PrimaryHR Department w/DependentRegional Staff

42% Domestic37% International

3

HR PrioritiesOrganizations were asked to identify the top threepriorities that their HR departments wouldemphasize over the next two years. The toppriorities for both international and domesticcompanies are presented in Table 1.

Table 1. Top priorities for international and domestic HRdepartments in the next two years.

International

Leadership development 52%

Recruiting high-quality employees 40%

Performance management 37%

Employee retention 33%

Domestic

Employee retention 46%

Recruiting high-quality employees 46%

Building strong organizationalvalues and corporate culture

40%

Leadership development 35%

Note: Numbers represent percentage of organizations ranking

each practice among their top three priorities.

Priority Finding 1: International companiesrecognize the need for strong leadership development.

Not surprisingly, HR departments in globalcompanies will emphasize leadership developmentin the next two years. This finding aligns with arecent study conducted by The Conference Board inwhich respondent organizations indicated that

identifying and developing leaders was the mostpressing issue in their organizations.1 Almost all theorganizations in the study (91 percent) alsoidentified leadership as the critical success factorneeded for global growth. Global organizationsrequire strong leaders who can drive the business inthe global marketplace and effectively managepeople in different cultures and environments. Asorganizations face a global war for talent and ashortage of qualified leaders, these people arebecoming increasingly difficult to find.2

A recent DDI study of leadership identified asizeable gap between current and future leadershipskills.3 In fact, today’s leaders do not believe theyare currently strong in 8 of the 10 skills deemedimportant for future leadership positions. Globalorganizations have the added burden of finding anddeveloping leaders who not only are strong in basicleadership skills, but can meet the demands ofmanaging in diverse locations and cultures andcreating a common corporate culture. To meet thischallenge, 73 percent of international organizationsindicated that they have a formal process in place foridentifying and developing potential candidates forkey management positions. Development effortsshould provide a broad spectrum of opportunities forindividuals to enhance their global leadership skillsand capabilities (e.g., cross-cultural assignments,multicultural task forces or project teams, mentoringprograms). By developing leaders internally, globalorganizations can form a strong leadership base onwhich to build for future success.

1 Csoka, L.S. (1998). Bridging the leadership gap [report number 1190-98-RR]. New York: The Conference Board.

2 McKinsey & Company. (1998). The war for talent. The McKinsey Quarterly, 3, 44–57.

3 Bernthal, P., Rioux, S., & Wellins, R. (1999). The leadership forecast: A benchmarking study. Pittsburgh, PA: Development Dimensions International.

4

Priority Finding 2: With the tight labor market,recruiting quality employees will be a challenge forboth international and domestic organizations.

The second priority for international HRdepartments—recruitment—is logical in light of theraging global war for talent. The labor market istight not only in the United States but also in manyother parts of the world. In fact, 162 respondentorganizations in a 1999 DDI study indicated that theavailability of fewer qualified candidates andcompetition for the same applicants were the topbarriers to effective recruitment and selection.4 Forglobal organizations, finding technically skilledcandidates who have the savvy to work acrosscultural and political boundaries might be even morechallenging. In today’s globally competitivemarketplace, the organization looking for qualified,talented candidates has to sell itself to them ratherthan vice versa. Attracting these candidates requiresorganizations to offer high-quality options such ashigh potential for advancement, a solid companyreputation, stock options, competitive salary andbenefits, and a positive company culture.5

Priority Finding 3: Managing employees’performance poses a significant challenge fororganizations that operate around the world.

A sound performance management system is the“glue that holds an organization together acrossgeographic, technical, and cultural boundaries,”according to a leading food and beverage company.Performance management allows global companiesto link individual and local business unit objectivesto the broad organizational strategies and goals.

Likewise, using effective performance managementpractices helps individuals see how what they docontributes to the organization’s overalleffectiveness.

Organizational Insight

At QUALCOMM, an international digitalwireless communications company, corporateand regional HR people work together to ensurethat high-level corporate goals are reflected ineach individual’s performance plan around theworld. The local HR person also helps themanagers incorporate performance goals thatare customary for that particular region.

Priority Finding 4: Finding quality employees isnot enough. Organizations must have plans in placeto retain the talent they acquire.

International and domestic organizations bothindicated that retaining employees will be a topconcern in the coming years. The high demand fortalent has created a buyer’s market around theworld. Individuals are choosing to leave their jobsfor numerous reasons. According to a 1997 studyconducted by the Society for Human ResourceManagement (SHRM), 41 percent of employerswere either concerned or very concerned about thenumber of voluntary resignations in their firms.6

Among the top reasons people left a company werehigher salaries and better career developmentopportunities. Hence, international and domesticorganizations should include in their retentionstrategies comprehensive training and developmentopportunities as well as career planning.

4Rioux, S., & Bernthal, P. (1999). Recruitment and selection practices survey report. Pittsburgh, PA: Development Dimensions International.

5Ibid.

6SHRM 1997 Retention Practices Mini-Survey. Alexandria, VA: Society for Human Resource Management.

5

Consistency of HR PracticesA majority of international (79 percent) anddomestic (87 percent) organizations reported thattheir parent organizations are taking action to makeHR practices more consistent across alllocations/offices. However, the reasons for doing sovary slightly for each organization type. Table 2indicates the reasons that organizations are makingtheir practices more consistent.

Table 2. Reasons for creating consistency in HR practices forinternational and domestic organizations.

Reason for creating consistency Int’l Domestic

Improve efficiency—reduce thecosts of HR practices

66% 71%

Improve effectiveness—make HRpractices more valuable

73% 81%

Common culture—have the samevalues at all locations/offices

75% 66%

HR Practices Finding 1: Internationalorganizations use consistent HR practices to helpdevelop a common corporate culture.

Both domestic and international organizationsattempt to use consistent HR practices for practicalpurposes—to improve efficiency and effectivenessof the HR function. However, more internationalthan domestic organizations reported usingconsistent practices for the strategic purpose ofdeveloping a common culture or values. HRdepartments in international companies face the

challenge of serving a culturally and geographicallydiverse organization. One way to hold peopletogether is through a common philosophy and set ofvalues. Ensuring that the same core HR practicesare being used in every location around the globe isone way an organization can espouse a common andconsistent strategy and culture.

HR Practices Finding 2: Selection practices varygreatly across locations in international organizations.

Organizations were asked to estimate how muchtheir current HR practices vary across alllocations/offices. The top five varying practices ininternational companies are found in Table 3.

Three of the top five HR practices that greatly varyinvolve selecting employees (i.e., assessments,testing, and Internet advertising). Differences inlanguage, culture, HR capabilities, and technologymight contribute to variations in these HR practicesin different countries. For example, accepting andusing certain selection methods, like assessments ortesting, can vary greatly from location to location.Additionally, companies with offices in multiplecountries possibly face different employment lawsthat can affect selection standards and requirements.HR practices based on technology (e.g., Internetadvertising) might pose a problem for somelocations because of access issues. Popular“Western” practices, such as mentoring and teams,also might not be as readily accepted in othercultures.

Table 3. Practices varying moderately or greatly across locations/offices in international companies.

Human Resource Practices Percentage indicating great or moderate variance

Assessments (role plays and simulations) 66%

Mentoring programs 64%

Testing for selection purposes 62%

Team training 60%

Internet advertising (recruiting) 60%

6

Challenges to ConsistencyInternational companies face many challenges whentrying to make HR practices consistent across alllocations/offices. The top three challenges are listedin Table 4.

Table 4. Top three challenges to consistent HR practices ininternational companies.

Challenges to consistentHR practices

Organizations indicatinga challenge*

Variations in social,political, and economiccircumstances

50%

Different locations/officeshave their own way ofdoing things and areresistant to change

48%

The perceived value of theHR function varies acrosslocations/offices

40%

* Percentage of organizations indicating a top three challenge.

Challenge 1: Social, political, and economicdifferences affect an organization’s ability toimplement consistent HR practices around the world.

International organizations identified variations insocial, political, and economic circumstances as thenumber one challenge to maintaining consistent HRpractices. When administering HR practices acrosslocations/offices, these companies must considerfactors such as government regulations, localemployment laws, cultural differences, andemployee expectations. Practices that work in onelocation/office might not be acceptable in anotherfor any number of reasons. For instance, a selectionpractice that includes asking personal questionsabout age and marital status might be perfectlyacceptable in one country but illegal in another, likein the United States.

Challenge 2: Organizations must be prepared toaddress and overcome local resistance to change.

Another major challenge facing HR practitioners isthat different locations/offices might have their ownoperating methods and are resistant to changing.Many of the international companies reported thattheir local offices control their own HR functions, soimplementing corporate HR initiatives would likelybe very difficult. To effectively implementcorporate HR strategies, organizations must takeinto account the various local ways of operating. Acorporate mandate to use a certain practice mightnot be successful if it is not flexible enough toincorporate the local cultures and ways of doingthings.

Challenge 3: The HR function must address anydiffering perceptions from the corporate and locallevels regarding HR’s value, credibility, andimportance.

The way that different locations/offices perceivetheir organization’s HR function also poses a largebarrier to implementing consistent HR practices.One location/office might perceive HR to be a truebusiness partner, working with high-level managersand contributing to the strategic direction of theorganization. In sharp contrast another location/office in the same company might view HR aspurely an administrative function that is responsibleonly for tracking personnel issues. How localoffices view the HR function is largely dependent onhow their corporate office views it: If the HRfunction is deemed to be of strategic importance byheadquarters, the locals will likely view it similarly.Thus, the importance of the HR function is impliedby how strategically aligned it is with majorbusiness issues and challenges facing theorganization.

7

Best Practices

The survey asked respondents to answer the following:

What is the most effective action your parent organization has taken to makeHR practices more consistent across all locations/offices?

Here is a sample of their responses:

r Developed a long-term HR plan to ensure alignment of HRstrategies/objectives with corporate objectives.

r Created centralized reporting relationships around the globe.

r Standardized assessment, development, and compensation practices.

r Introduced practices to regions around the globe and allowed the HR functionin each region the autonomy to do [its] job.

r Created global policies/processes for data management, performancemanagement, compensation, education, and development.

r Tied regional accountability to performance management.

r Shared HR best practices used in certain locations with all other locations.

r Developed an HR mission statement.

r Cascading of the corporate mission, vision, and core values to regionaloffices.

r Decentralized HR to be more responsive to local needs.

r Built a cohesive team willing to train and develop managers to interpretcorporate policy in their own environment.

r Introduced common programs (e.g., online evaluation, 360-degreeevaluations).

r Corporate HR writes the policy, then gets other areas to respond withcomments and/or local issues.

r Top HR personnel travel worldwide to meet with local/regional HR groups topresent and discuss HR programs and strategies.

r Improved communications and rolled out standard programs that arecustomized by country.

8

Creating a Corporate CultureWhen its offices are spread around the globe, anorganization might find it difficult to create a strong,unifying corporate culture. Despite this, 84 percentof surveyed international companies indicated thattheir parent organization was trying to establish acorporate culture at all locations/offices that wasconsistent with its goals and vision. What makesthis endeavor especially difficult is the influence thatthe local cultures have on how a location/officeconducts its business. Many of the internationalorganizations (88 percent) reported that the localculture or customs have a moderate or greatinfluence on the way they conduct business incertain locations.

Thus, a key to creating a consistent corporate cultureacross locations/offices is maintaining the criticalbalance between a strong corporate culture and localcultural differences. This balancing act has beendescribed as “achieving consistency while allowingflexibility.” 7 Companies must recognize that each

region will have its own culture that they should notstifle, while also recognizing the need to establish acorporate “way of doing things” to provide acommon bond among the regions.

Organizational Insight

A common corporate culture should not be forcedupon regional offices. Rather, as one executive atFluor Corporation believes, a global culture shouldbe cultivated by focusing on the company’sunderlying values and principles in all parts of thebusiness. Fluor touts the basic organizationalvalues of mutual respect and trust when dealingwith all of their associates worldwide.

Achieving a Consistent Corporate Culture

International organizations were asked what actionstheir parent companies have taken to create aconsistent corporate culture at all locations/offices.Figure 3 presents these strategies.

7Ulrich, D., & Black, S. (1999, Oct. 28). Worldly wise. People Management, 42�46.

9

Figure 3. Percentage of international companies using action to create a consistent corporate culture.

51%

57%

58%

63%

69%

76%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Percentage of international companies

Created a written strategy

outlining corporate culture

Created organizational

mission with input fromall

locations

Provided management

education outlining how the

company does business

Established common systems

(e.g., accounting, marketing,

MIS)

Allowed local cultures to

maintain their identity in

context of corporate culture

Communicated to all locations

about common corporate

culture

Communication. Over three-quarters of theorganizations surveyed communicated to all theirlocations/offices that the parent organization wasattempting to create a common corporate culturewith shared values, mission, goals, etc. The qualityof the initial and sustained communication strategiesis critical in creating a unified culture. In itscommunications the organization needs to clearlystate to the locations/offices its expectations aboutbusiness practices and organizational values, thencontinue to reinforce them to solidify theirunderstanding of the organizational climate.

Organizational Insight

At QUALCOMM a lot of time and energy is spent oncommunication. The company has a dailynewsletter that each employee receives. Thisnewsletter allows all employees to read the samecompany news on the same day. The companyalso has a monthly magazine for employees withsimilar jobs. These communication strategies helpto instill a sense of the QUALCOMM culture acrossits global locations.

10

Regional involvement and culture. When creatinga corporate culture, organizations should alsoinvolve their locations/offices. More than half of theorganizations surveyed (57 percent) reported thatthey included input from individuals or teams fromtheir locations/offices when shaping theirorganizational mission. Having a voice in thecreation of the global culture can increase the localoffices’ commitment to and support of theorganization’s cultural initiative. As previouslystated, allowing the local cultures to maintain theiridentities within the context of the corporate cultureis of utmost importance. The parent organizationcan do this by providing broad strategic guidelinesfor how to conduct business while leaving theregional offices the flexibility to execute thestrategies by way of their local cultures.

Education. Educating management around theglobe about how the company wishes to conductbusiness is another step to implementing a strongcorporate culture. Managers are responsible forensuring that the culture is established at the locallevel and that local strategies are aligned with theoverall corporate strategies. By educatingmanagers, organizations increase the likelihood thatall locations/offices hear the same message and areoperating with the same organizational values.Building organizational culture can be done througha variety of methods, including internationalseminars, task forces, and visits to headquarters,which all help the managers to learn about thecompany’s values and processes and theorganization to promote international spirit.8

General Challenges for theGlobal HR FunctionFunctions such as operations, sales, and marketinghave generally made great progress in adapting tothe global marketplace. However, the HR functionhas typically lagged behind in developing policiesand structures that support globalization. Creating atruly global HR function can be quite challengingwhen dealing with numerous international locations.Figure 4 illustrates the different challenges that theHR function faces in the globalization process.

The top challenges facing the HR function duringthe globalization process include:

r Coordinating activities in many differentlocations.

r Understanding the continual change of theglobally competitive environment.

r Building a global awareness in all HRdepartments/divisions.

r Creating a multicultural HR team.

Organizations that are growing globally are facednot only with the obvious challenge of trying tocoordinate activities among their manylocations/offices, but also with creating a trulyglobal mind-set among HR professionals. Such amind-set implies recognizing and valuing culturaldiversity, having knowledge of differences withinand across their various cultures, and being able tobalance global business needs within multiplecultures.9 All levels of the HR function—corporateand local—must understand and respond to a highlycompetitive global marketplace.

8Gates, S. (1994). The changing global role of the human resource function [report number 1062-94-RR]. New York: The Conference Board.

9Pucik, V. (1997). Human resources in the future: An obstacle or a champion of globalization? In D. Ulrich, M.R. Losey, & G. Lake (Eds.), Tomorrow�s

HR management. New York: Wiley & Sons.

11

Figure 4. Challenges facing the global HR function.

20%

12%

9%

9%

10%

10%

9%

59%

61%

62%

56%

55%

49%

50%

47%

20%

26%

29%

35%

35%

41%

42%

45%

8%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Preparing and educating HRrepresentatives to work with diverse

groups

Keeping local cultures and issues inmind when administering HR

practices

Creating HR strategies that meetthe company's goals and vision

Redfining roles and responsibilitiesof HR

Creating a multicultural HR team

Building a global awareness in allHR departments/divisions

Understanding the changingglobally competitive environment

Coordinating HR activities in manydifferent locations

Percentage of organizations

Note: Due to rounding, not all percentages total 100 percent.

International AssignmentsFinding, developing, and retaining global leaderstops the priority list of international companies.International, or expatriate, assignments are oftenused as a way to develop the talent of global leaders.

Expatriate Finding 1: Expatriate assignments arepopular development tools used by internationalcompanies.

Many companies are focusing on developing theirglobal talent internally, rather than seeking it fromthe outside labor pool. International assignmentsprovide development opportunities for globalleaders to expand their education and experiencewith different business challenges and cultures.Most of the international companies surveyed (83percent) use expatriate assignments. Internationalassignments generally last 1–5 years, with anaverage duration of 2.65 years.

��������������������� �������������������������������������

12

Table 5. Percentage of organizations indicating factor isimportant or very important when recruiting expatriatecandidates.

Characteristic

Percentage indicatingImportant or Very

Important

Willingness to travel 97%

International businessexperience

59%

Multilingual or bilingual 57%

Ethnic background 14%

Marital status 11%

Gender 7%

Expatriate Finding 2: International assignmentsare quite expensive; most cost at least twice asmuch as an expatriate’s salary.

While international assignments can provide greatdevelopment opportunities, they also are very costly.Most international companies (88 percent) spendmore than two times an expatriate’s salary duringthe person’s assignment. Half of the organizationsestimated that they spend between two to three timesan expatriate’s salary over the life span of theassignment. An additional 37 percent of theorganizations estimated their expenses to be three ormore times an expatriate’s salary.

Expatriate Finding 3: When recruitingexpatriates, organizations do not view the ability tospeak multiple languages as the most importantqualification.

Although an expatriate’s ability to speak otherlanguages was considered important by half of theinternational organizations using these types ofassignments, it was not the number onecharacteristic they considered when recruiting forinternational assignments. Rather, the mostdesirable characteristic of an expatriate is awillingness to travel (see Table 5). This willingnessis an innate characteristic and must be present tosuccessfully manage in a new country and culture.An individual with the desire to travel can readilylearn to communicate with intensive study andcoaching. Other factors, such as ethnic background,marital status, and gender, also do not appear verysignificant when organizations are assessingcandidates for these assignments.

Expatriate Finding 4: While most organizationsprovide pre-departure training for expatriates,relatively few provide a process for managing theperson’s home re-entry after completing theassignment.

Most organizations provide expatriates with trainingregarding language and culture before theirassignments, but they might not provide programsand support for the expatriates while they are onassignment or upon their return. Even fewerorganizations provide support or training for theexpatriate’s family before, during, or after theassignment (see Table 6). Providing support to boththe expatriate and the person’s family before andafter the assignment can greatly influence thesuccess of the assignment and the expatriate’sperception of and commitment to the organization.

13

Table 6. Percentage of organizations providing resources toexpatriates and their families.

Resources Expatriate Family

Language training 74% 58%

Cultural sensitivity training 70% 57%

Special in-country supportprograms

62% 56%

Process for managing re-entry tohome country

58% 39%

Expatriate Finding 5: Expatriate assignmentsmight not be money well spent unless companiesutilize the skills and abilities of the expatriates upontheir return.

While international assignments are often used aspart of a career planning and developmentprocess, they might not enhance the careers of theexpatriates. In fact, only 68 percent of respondent

organizations agreed that international assignmentshelp an expatriate’s career. This finding reflects theconcerns of expatriate managers surveyed for arecent report by The Conference Board. It foundthat a majority (80 percent) of the managers did notfeel that their international experience was valued,and most (87 percent) did not receive a promotionupon their return.10 International companies shouldrecognize that the money spent on expatriateassignments is an investment in their future. Theseassignments can help to develop global leaders whocan add value to the organization through theirunderstanding of the globally competitivemarketplace and their utilization of diverse humanresources. International assignments should be partof an integrated career planning and developmentprocess that includes a specified assignment uponthe expatriate’s return.

10Gates, S. (1996). Managing expatriates� return [report number 1148-96-RR]. New York: The Conference Board.

14

The Global PictureWhen it comes to business, the world is indeedbecoming a smaller place. More and morecompanies are operating across geographic andcultural boundaries. While most organizations haveadapted to the global reality in their operations,many are lagging behind in developing the humanresource policies, structures, and services thatsupport globalization. The human resource functionfaces many challenges during the globalizationprocess, including creating a global mind-set withinthe HR group, creating practices that will beconsistently applied in different locations/officeswhile also maintaining the various local cultures andpractices, and communicating a consistent corporateculture across the entire organization.

To meet these challenges, organizations need toconsider the HR function not as just anadministrative service but as a strategic businesspartner. Companies should involve the humanresources department in developing andimplementing both business and people strategies.This type of partnership is necessary if anorganization wants to change potentially inaccurate

perceptions of HR and reiterate the HR function’spurpose and importance throughout all its globalenvironment. Organizations will also discover thatHR can be invaluable in facilitating the developmentof a unifying corporate culture and finding andcultivating much needed leadership talent aroundthe world.

The process of globalizing resources, both humanand otherwise, is challenging for any company.Organizations should realize that their global HRfunction can help them utilize their existing humantalent from across multiple geographic and culturalboundaries. International organizations need toassist and incorporate their HR function to meet thechallenges they face if they want to create a trulyglobal workforce.

Center for Applied Behavioral Research

Sheila M. Rioux, Ph.D., Research Consultant

Paul R. Bernthal, Ph.D., Manager

Richard S. Wellins, Ph.D., Senior Vice President,

Programs/Marketing

15

appendixRespondent ProfileTable 1: Regions

Region/Country

OverallSamplePercent

DomesticPercent(n=70)

Int’lPercent(n=135)

Asia & Pacific Rim 20 16 21

Canada 10 9 11

Europe 4 0 6

Latin America 3 0 5

Middle East 1 0 1

United States 62 76 56

Table 2: Contact’s Position

Position

OverallSamplePercent

DomesticPercent

Int’lPercent

Human resourcedirector or manager

39 31 43

Human resource vicepresident

31 37 28

Other 29 31 28

Table 3: Industry

Industry Type

OverallSamplePercent

DomesticPercent

Int’lPercent

Manufacturing 41 18 54

Services 19 28 14

Transportation/Com-munication/Utilities

12 13 12

Finance/Insurance/Real Estate

12 18 8

Retail Trade 7 15 3

Other 9 8 9

Table 4: Industry Revenue

1999 Revenue

OverallSamplePercent

DomesticPercent

Int’lPercent

More than $10 billion 12 3 15

$1 billion to $10billion

34 31 36

$500 million to$1 billion

13 21 9

$100 million to$500 million

26 26 26

Less than $100 million 16 19 14

Table 5: Type of Employees

Mean Median Minimum Maximum

Non-exempt 54 65 0 95

Exempt 46 35 5 100

Table 6: Number of Employees

Mean Median Minimum Maximum

Number ofemployees atrespondent’s location

1,610 500 2 35,000

Number ofemployees at alllocations

16,471 5,000 60 325,000

Note: Due to rounding, not all percentages total 100 percent.

16

Respondent OrganizationsAcceptance Insurance Companies Inc.Alfa Corporativo, S.A. de C.V.American AirlinesAmeriPath, Inc.AmerUS GroupAmgen, Inc.Anglian Water plcApplied Industrial TechnologiesAramark Canada Ltd.Ashland, Inc.Australia Post—NSW/ACT DeliveryB/E Aerospace, Inc.Bangkok Industrial Gas Company, Ltd.The Bank of New YorkBanque Nationale du CanadaBanta CorporationBanyan WorldwideBaptist Health Systems of South FloridaBeiersdorf AGBeiersdorf Jobst Inc.Bethphage Great BritainBiogenBJ ServicesBJC Health SystemBlue Cross Blue Shield of North DakotaBMW GroupBoc Gases Australia Ltd.Boise Cascade Office Products CorporationBristol-Myers Squibb (Philippines), Inc.Brunner Mond (U.K.) Ltd.Brush Wellman, Inc.Bunnings Building Supplies Pty. Ltd.Cable and Wireless Optus Ltd.Canada Customs Revenue AgencyCanon Marketing (M) Sdn BhdCanon Virginia, Inc.Caraustar Industries, Inc.The Carbide/Graphite Group, Inc.Carpenter Technology CorporationCarvajal S.A.Castlemaine Perkins Pty. Ltd.Caterpillar Mexico S.A. de C.V.CCL Industries Inc.CEC Entertainment, Inc.Centrepoint Properties Ltd.Chiquita Brands InternationalCigarrera La Moderna, S.A. de C.V.Citation Computer Systems, Inc.Clarian HealthCleveland-Cliffs Inc.Coles Myer, Ltd.

Computer Management Services Pty. Ltd.Concentric NetworkConnecTel Ltd.Consolidated Papers, Inc.Corporacion Supermercados UnidosDaimlerChrysler Rail Systems (North America),

Inc. AdtranzDatalink CorporationDeutsche Financial ServicesDexter CorporationDomtar Inc.Duke-Weeks Realty CorporationDun & BradstreetDun & Bradstreet CanadaEast Kentucky Power Cooperative, Inc.Edify CorporationEli Lilly and Company (Taiwan), Inc.EnmaxEquateFairfax PrintersFederal Auto Cars Sdn BhdFederal Reserve Bank of DallasFirst Financial CorporationFirst Merit CorporationFlexsys Chemicals (M) Sdn BhdFluor CorporationFluor Daniel, Inc., PhilippinesGATX Logistics, Inc.General Semiconductor, Inc.Glaxo Wellcome Philippines, Inc.Glenayre Technologies, Inc.Groupo Gamesa S.A. de C.V. PepsicoGuilford Mills, Inc.Gulf States Paper CorporationH&R Block World HeadquartersHallmark CanadaHallmark Cards Australia Ltd.Hamilton Health Sciences CorporationHamilton-Sundstrand CorporationHCR ManorCareHenkel Corporation—Chemicals GroupHillshire Farm and Kahn'sHotel Inter-Continental TorontoHunter Douglas, Inc., Window Fashions DivisionIMS Health, CanadaIngham Intermediate School DistrictInnovex, Inc.Interim Services, Inc.Iron Ore Company of CanadaIrwin Financial CorporationJ. Baker, Inc.

17

Janssen-Ortho, Inc.JLG Industries, Inc.John Fairfax Holdings Ltd.Johnson & Johnson Medical Inc.Johnson & Johnson PhilippinesJournal CommunicationsKansas City Power & Light CompanyKellwood Company, Inc.Kerr-McGee CorporationKewaunee Scientific CorporationKeystone Financial, Inc.Kimberly-ClarkKimberly-Clark Australia Pty. Ltd.KL Airport Services Sdn BhdKoch Industries, Inc.KoSALaidlaw, Inc.Liberty Diversified IndustriesLion Nathal Group Pty. Ltd.Lowe's Companies Inc.LSI Logic CorporationMaersk Medical Sdn BhdMakro Cash & Carry Distribution (M) Sdn BhdMalaysia Airlines System BerhadMalaysia Airports (Niaga) Sdn BhdMastech Systems CorporationMaverick Transportation, Inc.Maybank (Group)Maytag CorporationMCMS Sdn BhdMessiah CollegeMethanex CorporationMid-America Apartment CommunitiesMind Spring EnterprisesMobil Asia Pacific Pte. Ltd.Mulpha International BhdNN Life Insurance Company of CanadaThe Northern Trust CompanyNova Chemicals (Canada) Ltd.Novartis CorporationOld Kent Financial CorporationOrica-Yarwun SitePancho's Mexican Buffet, Inc.Parker Hannifin plcPetroliam Nasional BerhadPGA Tour, Inc.Pilkington Libbey-Owens-Ford CompanyThe Pittston CompanyPizza Hut, Inc.Porsche Cars North America, Inc.Possis Medical, Inc.PPG Industries, Inc.Praxair Mexico, S.A. de C.V.Pricewaterhouse Coopers LLP

Progistix-Solutions Inc.Quaker Chemical CorporationQUALCOMM, Inc.Quest DiagnosticsReilly Industries, Inc.St. John Health SystemScience Applications International CorporationScientific-Atlanta, Inc.SDL, Inc.SEH AmericaSGL Carbon GroupSGS Philippines, Inc.Shands at AGHShopko Stores Inc.Singapore Telecommunications Ltd.The Smith's Snackfood CompanySOLA International, Inc.Sony Magnetic Products Inc. of AmericaSouthdown, Inc.SouthTrust Bank of Northeast Florida, N.A.Southwest AirlinesStar TribuneState Department of Connecticut, Department

of Administrative Services StrategicLeadership Center

Steelcase Canada Ltd.Storage USA, Inc.SWIFT (Society for Worldwide Interbank Financial

Telecommunication)Tech Data CorporationTexaco, Inc.Times Mirror CompanyTitan CorporationTJ International, Inc.Total Access Communication Public Company Ltd.Unisys Ltd. (U.K.)United Parcel ServiceThe University of Kansas School of Medicine—

WichitaUniversity of KentuckyThe University of Southern QueenslandU.S. Airways, Inc.Van Kampen Investor Services Inc.Vicorp Restaurants, Inc.Vistana, Inc.Warburg Dillon ReadWeirton Steel CorporationWells LamontWeyerhaeuser CompanyThe Wood CompanyWorldxchange CommunicationsWorsley Alumina Pty. Ltd.XIRCOM, Inc.York County Hospital

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