15-1 mcgraw-hill/irwin© 2003 the mcgraw-hill companies, inc.,all rights reserved
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15-1
McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc.,All Rights Reserved.
15-2
McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc.,All Rights Reserved.
Part Four: Organizational
Behavior and Human Resource Management
International Management,5th ed.
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McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc.,All Rights Reserved.
International Management,
5th ed.
Hodgetts and Luthans
Chapter Fifteen
Human Resource Selection and Repatriation
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IDENTIFY the three basic sources that MNCs can tap in filling management vacancies in overseas operations
SET FORTH some of the most common selection criteria used in identifying the best people for overseas assignments
DESCRIBE the selection procedures used in making the final decisions on the part of both the organization and the individual manager
DISCUSS the reasons for people’s returning from overseas assignments and present some of the strategies used in ensuring a smooth transition back into the local operation
Objectives of the Chapter
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Sources of Human Resources
Home Country Nationals Expatriate managers who are citizens of the country
where the MNC is headquartered Expatriates
Those who live and work away from their home country Citizens of the country where the MNC is headquartered
Expatriates are useful for: starting up operations providing technical expertise helping the MNC maintain financial control over the operation
Expatriates almost always were men Situation is changing
Expatriates typically used in top management positions
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Sources of Human Resources (cont.)
Host-Country Nationals Local managers who are hired by the MNC Used in middle- and lower-level management
positions Nativization
Requirement of host-country government that mandates employment of host-country nationals
U.S. companies tend to rely fairly heavily on host-country managers
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Sources of Human Resources (cont.)
Third-Country Nationals (TCNs) Citizens of countries other than the one in which the
MNC is headquartered or the one in which the managers are assigned to work by the MNC
Found in MNCs that have progressed through the initial and middle stages of internationalization
Advantages of using TCNs Require less compensation Good working knowledge of the region Given home office experience, often can achieve objectives
better than other types of managers Offer different perspectives
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Sources of Human Resources (cont.)
Inpatriates Individual from a host country or a third-
country national who is assigned to work in the home country
Help develop MNC’s global core competencies Able to manage across borders Do not fit the mold of traditional third-country
nationals
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Selection Criteria for International Assignments
Factors used to choose personnel for international assignments
General criteria Technical and human abilities Adaptability to cultural change Independence and self-reliance Physical and emotional health Age, experience, and education Language training Motivation for a foreign assignment
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Selection Criteria for International Assignments (cont.)
General criteria (cont.) Spouses and dependents or work-family issues
Adaptability screening Process of evaluating how well a family is likely to stand up to
the stress of overseas life
Leadership ability Based on maturity, emotional stability, communication
skills, independence, initiative, creativity, and good health
Preparing oneself for overseas assignment Self-evaluation and general awareness Concentration on activities that should be completed
prior to and subsequent to selection
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International Human Resource Selection Procedures
Testing Procedures Not extremely popular because:
Testing is expensive Lack of good measures of job performance in overseas jobs Testing did not do as good a job of selecting as other selection
procedures
Interviewing Procedures Popular screening method for international assignments May require both expatriate and local interviewers
Adjustment Model Explains the factors involved in effective adjustment
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Figure 15-3 Theoretic Model for Explaining International Adjustment
of ExpatriatesIn-Country AdjustmentAnticipatory Adjustment
Individual
Individual expectations
TrainingPrevious
experience
Organization
Selection mechanismsand criteria
AnticipatoryAdjustment
Individual
(1,2,3) Self-efficacy(1,2,3) Relation skills(1,2,3) Perception skills
Organizational Culture
(1) Organization culture novelty(1) Social support(2,3) Logistical help
Nonwork
(1) Culture novelty(1,2,3) Family-spouse adjustment
Mode of Adjustment
Degree of Adjustment
1. Work adjustment2. Interaction adjustment3. General adjustment
Job
(1) Role clarity(1) Role discretion(1) Role novelty(1) Role conflict
OrganizationSocialization
Socialization tacticsSocialization content
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Figure 15-4 The Relocation Transition Curve
1. Unreality The feeling of that the relocation is a dream
2. Fantasia The feeling of enchantment and excitement in the new environment
3. Interest A deeper exploration of the environment and a realization that it is fundamentally different from home
4. Acceptance of reality “Letting go” of past comfortable attitudes. The realization that you are a stranger in a strange land
5. Experimentation and testing of new approaches. Practice phase, trying to do things differently. Feedback of results, success and failure
6. Search for meaning. Understanding reasons for success and failure. New models/personal theories created
7. Integration of new skills and behavior. Accept- ance of the new environment
TimeBeginning of transition
Perceived Competence
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The Compensation Issue
Common Elements of Compensation Packages Base salary
Amount of money that an expatriate normally receives in the home country
Used to establish expatriate pay Serves as benchmark against which bonuses and
benefits are calculated Benefits
Substantial portion of expatriate compensation Many thorny issues surround the amount and nature
of the benefit package for expatriates
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The Compensation Issue (cont.)
Common Elements of Compensation Packages (cont.) Allowances
Expensive feature of expatriate packages Cost of living Relocation Housing Education Hardship
Incentives Used to motivate expatriates Lump-sum payments
Tax equalization Expatriates get two tax bills
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Figure 15-5 Relevant Cost of Living in Selected Cities:
New York = 100; December 2000
0
20
40
60
80
100
120
140
160
180
Tokyo
Hong
KongSeo
ul
New Y
ork
Lond
on
Beijing
Paris
Mos
cowCair
o
Carac
as
Sao P
auloLim
a
Istan
bul
Jaka
rta
Bangk
ok
Joha
nnes
burg
Man
ila
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The Compensation Issue (cont.)
Tailoring the Compensation Package Several approaches to tailor the compensation packa ge
Balance sheet approach Ensures the expat is ‘made whole’ and does not lose money by taking the
foreign assignment Localization
Pays the expat a salary comparable to that of local nationals Lump sum approach
Expat receives a predetermined amount of money and the individual makes her/his own decisions regarding how to spend it
Cafeteria approach Expat receives a series of options and decides how to spend funds
Regional approach Compensation system for all expats who are assigned to a particular
region and everyone paid in accord with that system
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Individual and Host-Country Viewpoints
Candidate Motivations for Accepting a Foreign Assignment Reasons for accepting a foreign assignment include:
Greater demand for their talents abroad than at home Enhancement of one’s international business career Attraction of overseas assignments
Motives affected by occupation Motives affected by home country of manager
Host Country Preferences for Managerial Personnel Ethnocentric, by and large
Prefer local managers
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Figure 15-6 Quality of Life in Select Major Metropolises
0
20
40
60
80
100
120
Zurich
Vanco
uver
Copen
hage
n
Stock
holm
Bruss
elsParis
Lond
on
New Y
ork
Mad
rid
Rome
Hong
Kong
Pragu
e
Istan
bul
Rio de
Jane
iroCair
o
Beijing
Mos
cow
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Repatriation of Expatriates
Repatriation Return to one’s home country from an overseas management
assignment Reasons for returning
Formally agreed-on tour of duty is over Expats want their children educated in the home country Unhappiness with foreign assignment Failure to perform well
Readjustment problems Permanent position upon return constitutes a demotion Lack opportunity to use skills learned abroad upon return Salary and benefits may decrease upon return
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Repatriation of Expatriates (cont.)
Transition Strategies Help smooth the adjustment from an overseas to a
stateside assignment Repatriation agreements
Individual and firm agree upon the length of the tour of duty Mutually agreeable job identified when expat returns
Keep expat involved in home office communication and projects while s/he is abroad
Proactive strategy that provides an effective support system to allay concerns about career issues
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Figure 15-7 Effectiveness of Returning Expatriates
5.0
4.5
4.0
3.5
2.5
2.0
1.5
1.0
3.0
Eff
ecti
ven
ess
High
Low
Neutral
Months back in home country
1 3 5 62 4
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