International Staffing


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International Staffing

  2. 2. INTERNATIONAL STAFFING  The decision of international staffing in MNC depends on following factors:  General staffing policy on key positions in HQ and subsidiary.  The ability of organization to attract the right candidate.  The constraints placed by the host government on hiring policies. 2INTERNATIONAL STAFFING
  3. 3. APPROACHES TO INTERNATIONAL STAFFING  4 approaches:  Ethnocentric approach  Polycentric approach  Regiocentric approach  Geocentric approach 3INTERNATIONAL STAFFING
  4. 4. ETHNOCENTRIC APPROACH  Results in the staffing of key positions in the MNC by PCNs.  MOTTO this works in my country, so it must work in all other countries. 4INTERNATIONAL STAFFING
  5. 5. ETHNOCENTRIC APPROACH REASONS:  Lack of qualified HCNs particularly senior management talent.  A desire to maintain good communication, coordination, tighter control and a unified corporate culture linked with corporate HQ.  A desire to transfer parent firm’s core competencies to a foreign subsidiary more expeditiously. 5INTERNATIONAL STAFFING
  6. 6. ETHNOCENTRIC APPROACH ADVANTAGES:  Organizational control and coordination is maintained and facilitated.  Promising managers are given international experience.  Assure that subsidiary will comply with company objectives. 6INTERNATIONAL STAFFING
  7. 7. ETHNOCENTRIC APPROACH DISADVANTAGES:  Limits the promotion opportunities of HCNs which may lead to reduced productivity and increased turnover among that group.  The adaptation of expatriate managers to new environment takes time during which these expatriates make poor decisions.  Income packages of expatriates are 4 times higher than locals. 7INTERNATIONAL STAFFING
  8. 8. POLYCENTRIC APPROACH  The MNC with this approach staff its foreign subsidiaries with HCNs and its home office with PCNs.  MOTTO When in Rome, do as the Romans do. 8INTERNATIONAL STAFFING
  9. 9. POLYCENTRIC APPROACH ADVANTAGES:  Eliminates language barriers.  Avoids adjustment problems of expatriates and their families and removes the need for cultural awareness training.  Less expensive.  Gives continuity to the management of foreign subsidiaries, thus reduces turnover. 9INTERNATIONAL STAFFING
  10. 10. POLYCENTRIC APPROACH DISADVANTAGES:  The gap between HQ and subsidiaries increased which becomes difficult to be managed.  Limited career opportunities for HCN and PCN managers. 10INTERNATIONAL STAFFING
  11. 11. GEOCENTRIC APPROACH  This approach utilizes the best people for key jobs through out the organization, regardless of nationality. 11INTERNATIONAL STAFFING
  12. 12. GEOCENTRIC APPROACH REASONS:  Highly competent employees are available not only at HQs but also in subsidiaries.  International experience is a condition for success in top positions.  Managers with high potential are constantly ready to be transferred from one country to another. 12INTERNATIONAL STAFFING
  13. 13. GEOCENTRIC APPROACH ADVANTAGES:  Enables an MNC to develop an international executive team.  Overcome the federation drawback of polycentric approach. 13INTERNATIONAL STAFFING
  14. 14. GEOCENTRIC APPROACH DISADVANTAGES:  Host govt. pressurizes MNC to employ high number of HCNs.  Expensive to implement because of training and relocation expense.  Time consuming.  Requires more centralized control of staffing. 14INTERNATIONAL STAFFING
  15. 15. REGIOCENTRIC APPROACH  Refers to the functional rationalization on a more than one country basis.  Regionally oriented approach where an MNC divide its operations into geographical regions and transfer staff within those regions. 15INTERNATIONAL STAFFING
  16. 16. REGIOCENTRIC APPROACH ADVANTAGES:  Allows interaction between executives transferred to regional HQs.  A step for MNC to move from purely poly or ethnocentric or geocentric approach. 16INTERNATIONAL STAFFING
  17. 17. REGIOCENTRIC APPROACH DISADVANTAGES:  It provides federalism at regional basis rather than country basis. This serves as a barrier in taking a global stance.  Limits career progression opportunities to the regional level. 17INTERNATIONAL STAFFING
  18. 18. ISSUES IN STAFF SELECTION  Expatriate selection  Selection criteria  Use of selection tests  Other factors in expat selection 18INTERNATIONAL STAFFING
  19. 19. EXPATRIATE SELECTION  The major challenge in international staffing is Expatriate selection.  Incase of expat selection, main issue is the Expatriate Failure. 19INTERNATIONAL STAFFING
  20. 20. EXPATRIATE FAILURE  The premature return of an expatriate before completion of assignment is referred to as Expatriate Failure.  It incurs direct as well as indirect cost on the organization. 20INTERNATIONAL STAFFING
  21. 21. EXPATRIATE FAILURE  DIRECT COST:  Airfares  Associated relocation expenses  Salary  Training 21INTERNATIONAL STAFFING
  22. 22. EXPATRIATE FAILURE  INDIRECT COST: Affecting organization  Loss of market share  Difficulties in dealing with the host govt. officials. Affecting Expats  Loss of self esteem  Loss of self confidence  Loss of prestige among peers  Reduced motivation  Loss of promotional opportunities 22INTERNATIONAL STAFFING
  23. 23. EXPATRIATE FAILURE REASONS:  Spouse/partner dissatisfaction  Family concerns  Ability to adapt  Wrong Candidate selection  Job fails to meet expectations  Job performance  Quality of life  Remuneration dissatisfaction 23INTERNATIONAL STAFFING
  24. 24. SELECTION CRITERIA  Technical ability  Cross cultural suitability  Family requirements  Country cultural requirements  Language 24INTERNATIONAL STAFFING
  25. 25. USE OF SELECTION TESTS  Personality tests  Psychological tests 25INTERNATIONAL STAFFING
  26. 26. OTHER FACTORS IN EXPAT SELECTION  Dual career couple  Female international managers  Family considerations 26INTERNATIONAL STAFFING