3. staffing

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  • Staffing

    Factors affecting approaches to staffing

    General staffing policy on key positions at headquarters and subsidiaries

    Constraints placed by host government

  • The Immigration Reform and Control Act of 1986 (IRCA) bars employers from hiring individuals who are not legally entitled to work in the U.S. Employers must verify work eligibility by completing Form I-9 along with required supporting documents. IRCA also prohibits employers from discriminating in hiring, firing, recruiting, or referring on the basis of national origin or citizenship status.

    H-1B workers may be employed temporarily in a specialty occupation or as a fashion model of distinguished ability. A specialty occupation requires theoretical and practical application of a body of specialized knowledge along with at least a bachelors degree or its equivalent. An H-1B alien may work for any petitioning U.S. employer for a maximum period of six years.

  • Beware..!!!!!!

    What works at

    home does not


    work abroad

  • A 4 day strike and pay rises of 10-15% were part of the cost

    paid by a south Korean textile firm for an incident involving

    one of the expatriate managers in its Vietnamese factory. A

    Vietnamese worker was confronted by his south Korean

    boss. Speaking in Korean, the manager yelled at him for

    being in the wrong place in the factory. As he did not

    understand her, the Vietnamese did not respond. The south

    Korean manager kicked and slapped him as in south Korea

    it is common for employers t0 scold or even beat employees

    if they make a big mistake. Here though such behaviour

    resulted in 10 of the Vietnamese co-workers retaliating in

    kind. The manager was rushed to hospital and the workers

    went on strike. The south Korean was subsequently


  • Approaches to staffing

    Staff availability





    IBUS 618 Dr. Yang 6

  • Ethnocentric

    Strategic decisions are made at headquarters;

    Limited subsidiary autonomy;

    Key positions in domestic and foreign operations are held by headquarters personnel;

    PCNs manage subsidiaries.

  • Advantages:

    To ensure new subsidiary complies

    with overall corporate

    objectives and policies

    Has the required level of competence

    Assignments as control


    Limits the promotion opportunities of HCNs, leading

    to reduced productivity and

    increased turnover

    Longer time for PCNs to adapt to host countries, leading to

    errors & poor decisions making

    High cost

  • Polycentric

    Each subsidiary is a distinct national entity with some decision-making autonomy;

    HCNs manage subsidiaries who are seldom promoted to HQ positions;

    PCNs rarely transferred to subsidiary positions.

  • Advantages:

    Employment of HCNs eliminates language barriers, avoids adaptation of PCNs, reduces the need for

    cultural awareness training programs

    Employment of HCNs allows a multinational company to take a lower profile in sensitive political situations

    Employment of HCNs is less expensive

    Employment of HCNs gives continuity to the management of foreign subsidiaries (lower turnover of

    key managers)

  • Disadvantages:

    Difficult to bridge the gap between HCN subsidiary managers and PCN managers at headquarters

    HCN managers have limited opportunities to gain experience outside their own country

    PCN managers have limited opportunities to gain international experience

    Resource allocation and strategic decision making will be constrained when headquarter is filled only by PCNs who

    have limited exposure to international assignment

  • 2012, July: Indian Information Technology companies

    supported nearly 2.8 lakh jobs in America in the year 2011 by

    way of foreign direct investment through acquisitions of IT

    companies. India invested nearly $ 5 billion in foreign direct

    investment. Top Indian IT companies like TATA, HCL

    technologies India's fourth largest software export, Infosys and

    Wipro stepped in United States to set up their subsidiaries and

    recruited American nationals from colleges and experienced

    professionals who had the local knowledge and domain

    expertise. local employees have the requisite knowledge and

    understanding of culture, people and were in a particular


    IBUS 618 Dr. Yang 14

  • Geocentric

    A global approach - worldwide integration

    View that each part of the organization makes a unique contribution

    Nationality is ignored in favor of ability

    Best person for the job

    Color of passport does not matter when it comes to rewards, promotion and development


  • Advantages:

    Ability of the firm to develop an international executive team

    Overcomes the federation drawback of the polycentric approach

    Support cooperation and resource sharing across units


    Host government may use immigration controls in order to increase HCNs employment

    Expensive to implement due to increased training and relocation costs

    Large numbers of PCNs, HCNs, and TCNs need to be sent across borders

    Reduced independence of subsidiary management

  • Geocentric Staffing Requirements

  • Regiocentric

    Reflects a regional strategy and structure;

    Regional autonomy in decision making;

    Staff move within the designated region, rather than globally;

    They are not normally moved to the company headquarters.

  • Advantages:

    Allow interaction between executives transferred to regional headquarters from subsidiaries in the region and PCNs posted to the regional headquarters

    Provide some sensitivity to local conditions

    Help the firm to move from a purely ethnocentric or polycentric approach


    Produce federalism at a regional rather than a country basis and constrain the firm from taking a global stance

    Staffs career advancement still limited to regional headquarters, not the parent country headquarters

  • Determinants of IHRM Approaches and


  • Reasons for International Assignments

    Position filling,

    Skills gap, launch of new endeavor, technology transfer

    Management development

    Organizational development

    Need for control, transfer of knowledge, competence, procedures and practices into various locations

  • Types of International Assignments

    Short term: up to 3 months


    Project supervision

    A stopgap until a permanent arrangement is found

    Extended: up to 1 year

    May involve similar activities as short-term assignments

    Long term: from 1 to 5 years

    The traditional expatriate assignment

  • Traditional

    Filling position,

    management development

    12-36 months

    Family joins the assignee

    Formal selection


    Good relation, constant



    Dual career options,

    expensive, less flexibility

    Short term

    Skill transfer / problem


    6-12 months

    Unaccompanied by family

    Informal, little bureaucracy


    Flexibility, cost effectiveness


    Poor relationship, side effects,

    work permit issues

  • Non-standard Assignments

    Commuter assignments weekly or bi-weekly basis

    Rotational assignments short period followed by break in home country, oil rigs

    Contractual assignments - R & D

    Virtual assignments manage from home, international assignment, heavy reliance on communication technologies, frequent visits to host

    country but..

  • The Role of an Expatriate

    Agent of direct control Formal control, Direct supervision

    Agent of socialization Informal control, expected behaviors

    Network builder Developing social capital, communication,

    Boundary spanner representatives in host country, bridge external-internal contexts

    Language node familiar with host language

    Transfer of competence and knowledge cross fertilization of ideas, ability and motivation of expatriate

  • The Role of Non-expatriates

    People who travel internationally yet are not considered expatriates as they do not relocate to another country

    IB travelers, Road warriors, Globetrotters, Frequent fliers, Flexpatriates

    Much of international business involves visits to foreign locations

    Sales staff attending trade fairs

    Periodic visits to foreign operations

  • Contd

    A Glamorous Life

    International business travelers cite the positives as:

    Excitement and thrills of conducting business deals in foreign locations

    Life style (top hotels, duty-free shopping, business class travel)

    General exotic nature

  • Contd

    But a High Level of Stress!

    Home and family issues

    Work arrangements

    Travel logistics

    Health concerns

    Host culture issues

  • Various Roles of Corporate HR

    Centralized HR


    Decentralized HR


    Transition HR