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Jaya
Jayadeva de Silva
IMPORTANT
Case 8 from the text book
Just another move to China ?
The Impact of International
Assignments on Expatriate
Families
Characters
 Lisa Macdougal
 Lachian Macdougal
 Amelia Macdougal
 Emily Macdougal
Issues
 Pros and Cons of International Assignments
 Identity Crisis
 Ingroups
 Identity issues of Children
 Permanent home
 Relatives and Circle of Friends
 Investments
 Dual career issues
 Trailing spouse
13-7
Issues .....
 Culture shock
 Acculturation
 Cross cultural communication
 Adjustments needed
 Career Interests
 Kids and their future
 Security risks
 Repatriation
 Reverse culture shock
Jayadeva de Silva
HR and the Internationalization of Business
 More and more companies are doing business
abroad
 Globalization requires that employees who never
leave the home office need to be
“internationalized” to some extent
 Cultural diversity must be addressed
HR Challenges of International Business
 Employers face political, social, legal and cultural
differences among countries abroad
 Effective human resource practices must be
developed for each country’s local facility and for
the company as a whole
 Vast distances add to the challenges
HR Managers Top Global Concerns
 Deployment
 Knowledge and innovation dissemination
 Identifying and developing talent
What Is International HRM?
 Human resource management concepts and
techniques employers use to manage the HR
challenges of their international operations
 Focuses on three main areas:
1. Management of HR in global corporations
2. Management of expatriate employees
3. Compare HRM practices in variety of countries
Which Inter-Country Differences Affect HRM
 Cultural factors
 Economic systems
 Legal and industrial relations factors
Cultural Factors
 Cultural differences influence HR policies and
procedures that work best in a particular place
 Researchers have concluded that countries
different along four cultural dimensions:
1. Assertiveness
2. Future orientation
3. Performance orientation
4. Humane orientation
Economic Systems Factors
From country to country, economic systems vary in
the following:
 Labor laws, regulations and costs
 Hourly compensation and a typical work week
 Vacation and benefits requirements
Legal and Industrial Relations Factors
 The interplay of directives and country laws means
HR practices must vary from country to country
 Some EU countries have minimum wages systems in
place while others set national limits
 The EU sets the workweek at 48 hours but most
countries set it at 40 hours per week
 EU countries have many levels of employee
representation
Improving International Assignments
Through Selection
 80% of Financial Times top 100 company CEOs
recently had overseas assignments
 Often the assignments fail due to poor expatriate
entry and reentry preparation
 Companies are taking steps to reduce expat
problems by selecting expats more carefully,
helping spouses get jobs abroad and providing
more ongoing support to the expat and family
Copyright © 2009 Pearson Education, Inc.
publishing as Prentice Hall 13-17
When International Assignments Succeed
 They focus on knowledge creation and global
leadership development
 They assign overseas people whose technical skills
are matched or exceeded by their cross-cultural
abilities
 Their expatriate assignments include a deliberate
repatriation process
Expatriate Personality
 Expats are increasingly
younger and single
 Tend to be extroverted,
agreeable and
emotionally stable
individuals
 Tend to have great
cultural empathy
International Staffing: Home or Local?
 Locals are citizens of the countries where they are
working
 Expatriates are noncitizens of the countries in
which they are working
 Host country nationals are citizens of the
country in which the multinational company has
its headquarters (can be expatriates)
 Third-country nationals are citizens of a country
other than the parent or the host country
International Staffing: Home or Local?, cont.
 Using locals can be cost effective and help the
multinational gain favor with the host country
 Using expats helps multinationals meet required
technical qualifications and help the multinational
implement headquarters instructions and culture
 A hybrid solution that utilizes both locals and
expats can help smooth the multinational’s
transition
Pros and Cons of Offshoring
 Offshoring is having local employees abroad do
jobs previously done in-house
 It is growing rapidly and remains controversial
 Opponents cite job drain means millions of fewer
white-collar jobs for Americans
 Proponents cite global competitiveness and
increased R&D that will increase domestic jobs
Values and International Staffing Policy Ethnocentric companies will make sure the home
country’s attitudes, management style, knowledge,
evaluation criteria, etc., prevail through filling key
management jobs with parent-country nationals
 Polycentric companies believe that only host
country managers can understand the culture and
behavior of the host country market and the
foreign subsidiary should be managed by host-
country nationals and home office with parent-
country nationals
Values and International Staffing Policy, cont.
 Geocentric companies believe that the best
manager for the firm could be located anywhere so
they look at all management for potential and staff
on the basis of choosing the best people for key
jobs regardless of nationality
Ethics and Codes of Conduct
 Exporting a firm’s ethics is problematic as the code
might not translate to the host-country and can be
undermined by cultural norms
 Lawyers recommend a company focus on creating
and distributing a global code of conduct that
creates standards for adhering to U.S. law that has
cross-border impact
Selecting International Managers
 Screening and testing
 Realistic previews
 Adaptability screening
Sending Women Managers Abroad
 Women expats are
underrepresented
 Misconceptions
about familial
decisions and safety
concerns add to the
problem
Sending Women Managers Abroad, cont.
Misperception can be short-circuited by:
1. Formalize a process for identifying employees
willing to be expats
2. Train managers to understand how employees
really feel about going abroad
3. Let successful female expats recruit prospective
female expats
4. Provide the expat’s spouse with employment
assistance
Training and Maintaining International
Employees
 Cross-cultural training
Training and Maintaining International
Employees, cont.Expats can also be trained by a 4-step approach:
 Level 1 focuses on the impact of cultural
differences
 Level 2 aims at getting participants to understand
who attitudes are formed and influence behavior
 Level 3 provides a factual knowledge of the target
country
 Level 4 provides skill building in areas like
language, adjustment and adaptation skills
Other Expatriate Training
 Documentary programs about the country’s
geography and socioeconomic/political history
 Cultural assimilation to display the sorts of social
and interpersonal situations expats are likely to
encounter
 Language training
 Sensitivity training
 Actual interactions with people from other
countries
Trends
 To provide continuing, in-country, cross-cultural
training during early stages of overseas assignment
 Using returning managers as resources to cultivate
the “global mindsets” of the home-office staff
 Increased use of software and the Internet for
cross-cultural training
International Compensation
 Balance Sheet Approach based on the following:
 Income taxes
 Housing
 Goods and services
 Discretionary expenses
 Premiums
 Incentives
Establishing a Global Pay System
 Phase I: Formulate a global compensation
framework
 Phase II: Organize jobs and appraisals
 Phase III: Create detailed pay policies
 Phase IV: Talent management framework
 Phase V: Ongoing program assessment
Performance Appraisal of International
Managers
 Stipulate the assignment’s difficulty level and
adapt performance criteria to the situation
 Weigh the evaluation more toward the onsite
manager’s appraisal than toward the home-site
manager’s
 If the home-office manager does the actual written
appraisal have him or her use a former expatriate
from the same overseas location for advice
Safety and Fair Treatment Abroad
 Provide expats with training about traveling, living
abroad and the place they’re going to
 Tell them not to draw attention to the fact that
they’re American
 Have travelers arrive at airports as close to
departure time as possible and wait in areas away
from the main flow of traffic
 Equip the expat’s car and home with adequate
security systems
Safety and Fair Treatment Abroad, cont.
 Tell employee to vary their departure and arrival
times and take different routes
 Keep employees current on crime and other
problems by regularly checking the State
Department’s travel advisory service and consular
information sheets
 Advise employees to remain confident at all times
Repatriation: Problems and Solutions
 40-60% of expats will
quit within 3 years of
returning home
 Formal repatriation
programs are useful
 Make sure the expat
and family do not feel
the company has left
them adrift
How to Implement a Global HR System
 Form global HR networks
 Remember that it’s more important to standardize
ends and competencies than specific methods
 Remember that global systems are more accepted
in truly global organizations
 Investigate pressures to differentiate; then
determine legitimacy
=
How to Implement a Global HR System, cont.
 Remember, “You can’t communicate enough”
 Dedicate adequate resources for the global HR
effort

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Managing expatriates

  • 3.
  • 4.
  • 5. Case 8 from the text book Just another move to China ? The Impact of International Assignments on Expatriate Families
  • 6. Characters  Lisa Macdougal  Lachian Macdougal  Amelia Macdougal  Emily Macdougal
  • 7. Issues  Pros and Cons of International Assignments  Identity Crisis  Ingroups  Identity issues of Children  Permanent home  Relatives and Circle of Friends  Investments  Dual career issues  Trailing spouse 13-7
  • 8. Issues .....  Culture shock  Acculturation  Cross cultural communication  Adjustments needed  Career Interests  Kids and their future  Security risks  Repatriation  Reverse culture shock Jayadeva de Silva
  • 9. HR and the Internationalization of Business  More and more companies are doing business abroad  Globalization requires that employees who never leave the home office need to be “internationalized” to some extent  Cultural diversity must be addressed
  • 10. HR Challenges of International Business  Employers face political, social, legal and cultural differences among countries abroad  Effective human resource practices must be developed for each country’s local facility and for the company as a whole  Vast distances add to the challenges
  • 11. HR Managers Top Global Concerns  Deployment  Knowledge and innovation dissemination  Identifying and developing talent
  • 12. What Is International HRM?  Human resource management concepts and techniques employers use to manage the HR challenges of their international operations  Focuses on three main areas: 1. Management of HR in global corporations 2. Management of expatriate employees 3. Compare HRM practices in variety of countries
  • 13. Which Inter-Country Differences Affect HRM  Cultural factors  Economic systems  Legal and industrial relations factors
  • 14. Cultural Factors  Cultural differences influence HR policies and procedures that work best in a particular place  Researchers have concluded that countries different along four cultural dimensions: 1. Assertiveness 2. Future orientation 3. Performance orientation 4. Humane orientation
  • 15. Economic Systems Factors From country to country, economic systems vary in the following:  Labor laws, regulations and costs  Hourly compensation and a typical work week  Vacation and benefits requirements
  • 16. Legal and Industrial Relations Factors  The interplay of directives and country laws means HR practices must vary from country to country  Some EU countries have minimum wages systems in place while others set national limits  The EU sets the workweek at 48 hours but most countries set it at 40 hours per week  EU countries have many levels of employee representation
  • 17. Improving International Assignments Through Selection  80% of Financial Times top 100 company CEOs recently had overseas assignments  Often the assignments fail due to poor expatriate entry and reentry preparation  Companies are taking steps to reduce expat problems by selecting expats more carefully, helping spouses get jobs abroad and providing more ongoing support to the expat and family Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall 13-17
  • 18. When International Assignments Succeed  They focus on knowledge creation and global leadership development  They assign overseas people whose technical skills are matched or exceeded by their cross-cultural abilities  Their expatriate assignments include a deliberate repatriation process
  • 19. Expatriate Personality  Expats are increasingly younger and single  Tend to be extroverted, agreeable and emotionally stable individuals  Tend to have great cultural empathy
  • 20.
  • 21. International Staffing: Home or Local?  Locals are citizens of the countries where they are working  Expatriates are noncitizens of the countries in which they are working  Host country nationals are citizens of the country in which the multinational company has its headquarters (can be expatriates)  Third-country nationals are citizens of a country other than the parent or the host country
  • 22. International Staffing: Home or Local?, cont.  Using locals can be cost effective and help the multinational gain favor with the host country  Using expats helps multinationals meet required technical qualifications and help the multinational implement headquarters instructions and culture  A hybrid solution that utilizes both locals and expats can help smooth the multinational’s transition
  • 23. Pros and Cons of Offshoring  Offshoring is having local employees abroad do jobs previously done in-house  It is growing rapidly and remains controversial  Opponents cite job drain means millions of fewer white-collar jobs for Americans  Proponents cite global competitiveness and increased R&D that will increase domestic jobs
  • 24. Values and International Staffing Policy Ethnocentric companies will make sure the home country’s attitudes, management style, knowledge, evaluation criteria, etc., prevail through filling key management jobs with parent-country nationals  Polycentric companies believe that only host country managers can understand the culture and behavior of the host country market and the foreign subsidiary should be managed by host- country nationals and home office with parent- country nationals
  • 25. Values and International Staffing Policy, cont.  Geocentric companies believe that the best manager for the firm could be located anywhere so they look at all management for potential and staff on the basis of choosing the best people for key jobs regardless of nationality
  • 26. Ethics and Codes of Conduct  Exporting a firm’s ethics is problematic as the code might not translate to the host-country and can be undermined by cultural norms  Lawyers recommend a company focus on creating and distributing a global code of conduct that creates standards for adhering to U.S. law that has cross-border impact
  • 27. Selecting International Managers  Screening and testing  Realistic previews  Adaptability screening
  • 28.
  • 29.
  • 30.
  • 31. Sending Women Managers Abroad  Women expats are underrepresented  Misconceptions about familial decisions and safety concerns add to the problem
  • 32. Sending Women Managers Abroad, cont. Misperception can be short-circuited by: 1. Formalize a process for identifying employees willing to be expats 2. Train managers to understand how employees really feel about going abroad 3. Let successful female expats recruit prospective female expats 4. Provide the expat’s spouse with employment assistance
  • 33. Training and Maintaining International Employees  Cross-cultural training
  • 34. Training and Maintaining International Employees, cont.Expats can also be trained by a 4-step approach:  Level 1 focuses on the impact of cultural differences  Level 2 aims at getting participants to understand who attitudes are formed and influence behavior  Level 3 provides a factual knowledge of the target country  Level 4 provides skill building in areas like language, adjustment and adaptation skills
  • 35. Other Expatriate Training  Documentary programs about the country’s geography and socioeconomic/political history  Cultural assimilation to display the sorts of social and interpersonal situations expats are likely to encounter  Language training  Sensitivity training  Actual interactions with people from other countries
  • 36.
  • 37. Trends  To provide continuing, in-country, cross-cultural training during early stages of overseas assignment  Using returning managers as resources to cultivate the “global mindsets” of the home-office staff  Increased use of software and the Internet for cross-cultural training
  • 38.
  • 39. International Compensation  Balance Sheet Approach based on the following:  Income taxes  Housing  Goods and services  Discretionary expenses  Premiums  Incentives
  • 40.
  • 41. Establishing a Global Pay System  Phase I: Formulate a global compensation framework  Phase II: Organize jobs and appraisals  Phase III: Create detailed pay policies  Phase IV: Talent management framework  Phase V: Ongoing program assessment
  • 42. Performance Appraisal of International Managers  Stipulate the assignment’s difficulty level and adapt performance criteria to the situation  Weigh the evaluation more toward the onsite manager’s appraisal than toward the home-site manager’s  If the home-office manager does the actual written appraisal have him or her use a former expatriate from the same overseas location for advice
  • 43. Safety and Fair Treatment Abroad  Provide expats with training about traveling, living abroad and the place they’re going to  Tell them not to draw attention to the fact that they’re American  Have travelers arrive at airports as close to departure time as possible and wait in areas away from the main flow of traffic  Equip the expat’s car and home with adequate security systems
  • 44. Safety and Fair Treatment Abroad, cont.  Tell employee to vary their departure and arrival times and take different routes  Keep employees current on crime and other problems by regularly checking the State Department’s travel advisory service and consular information sheets  Advise employees to remain confident at all times
  • 45. Repatriation: Problems and Solutions  40-60% of expats will quit within 3 years of returning home  Formal repatriation programs are useful  Make sure the expat and family do not feel the company has left them adrift
  • 46. How to Implement a Global HR System  Form global HR networks  Remember that it’s more important to standardize ends and competencies than specific methods  Remember that global systems are more accepted in truly global organizations  Investigate pressures to differentiate; then determine legitimacy =
  • 47. How to Implement a Global HR System, cont.  Remember, “You can’t communicate enough”  Dedicate adequate resources for the global HR effort