1. Case 2.1 Establishing a branch of a family business in China A family-owned carbon steel company from Germany has extended its business to Hong Kong. The owners bought a small traditional Chinese firm and decided to copy the successful structure they had developed at home. This structure was headed by three general managers who equally shared the responsibilities for the business activities of the firm. The consequences were as follows. 1.The Chinese employees were assigned tasks by people they had never seen before and whom they did not understand. Many misunderstandings occurred, some were quite costly. 2.The employees back in Europe were only concerned with whether the assigned tasks were completed and did not consider any other obligations to the Chinese employees, such as taking care of the relationships with the Chinese government, banks, etc. 3.Eventually, the local employees became frustrated and were ready to leave the company. The result was that the management model was changed again and a single managing director of the subsidiary was accountable for all business activities in Hong Kong. Discussion Questions: 1Relate the described situation to one of the cultural dimensions identified by Hofstede. How can you explain it? 2How does this situation compare to comparable situations in your home country? What are the limits of a cultural explanation? 2. Case 2.2 Long-term development plans of a German multinational in the USA A German firm had developed its activities in the electrical industry in the USA for two years and the Chief Executive Officer (CEO) Peter Hansen was happy with their current performance: market share for important products had increased significantly and progress was better than expected. The number of employees had increased, including quite a few local American managers in high-level management positions – a situation which was rather unusual for a subsidiary of a German multinational in its early stage of development. The CEO’s goal from the beginning was to avoid an ethnocentric approach to the American activities of his firm and to take a polycentric approach that supported recruitment of local managers. One of these US local managers was John Miller, the marketing director of the company. During the last two years, he had been thoroughly prepared for his job. The company had sent him to various high-level training programs at top business schools and had provided him with a long-term career plan, which included short-term vertical career advancement. While Peter Hansen wanted to support the development of an American manage- ment style, he nevertheless tried to transfer some HR practices which are highly valued in Germany – particularly investing in training and taking a long-term intraorganizational career perspective. While some US firms took this approach, these ideas were not as widely accepted in the USA as in Germany. However, Peter Hansen assumed that these policies would be valued by the new US.

1. 1. Case 2.1 Establishing a branch of a family business in China
A family-owned carbon steel company from Germany has
extended its business to Hong Kong. The owners bought a small
traditional Chinese firm and decided to copy the successful
structure they had developed at home. This structure was headed
by three general managers who equally shared the
responsibilities for the business activities of the firm. The
consequences were as follows.
1.The Chinese employees were assigned tasks by people they
had never seen before and whom they did not understand. Many
misunderstandings occurred, some were quite costly.
2.The employees back in Europe were only concerned with
whether the assigned tasks were completed and did not consider
any other obligations to the Chinese employees, such as taking
care of the relationships with the Chinese government, banks,
etc.
3.Eventually, the local employees became frustrated and were
ready to leave the company. The result was that the management
model was changed again and a single managing director of the
subsidiary
was accountable for all business activities in Hong Kong.
Discussion Questions:
1Relate the described situation to one of the cultural dimensions
identified by Hofstede. How can you explain it?
2How does this situation compare to comparable situations in
your home country? What are the limits of a cultural
explanation?
2. Case 2.2 Long-term development plans of a German
multinational in the USA
A German firm had developed its activities in the electrical
industry in the USA for two years and the Chief Executive

2. Officer (CEO) Peter Hansen was happy with their current
performance: market share for important products had increased
significantly and progress was better than expected. The number
of employees had increased, including quite a few local
American managers in high-level management positions – a
situation which was rather unusual for a subsidiary of a German
multinational in its early stage of development. The CEO’s goal
from the beginning was to avoid an ethnocentric approach to the
American activities of his firm and to take a polycentric
approach that supported recruitment of local managers.
One of these US local managers was John Miller, the marketing
director of the company. During the last two years, he had been
thoroughly prepared for his job. The company had sent him to
various high-level training programs at top business schools and
had provided him with a long-term career plan, which included
short-term vertical career advancement. While Peter Hansen
wanted to support the development of an American manage-
ment style, he nevertheless tried to transfer some HR practices
which are highly valued in Germany – particularly investing in
training and taking a long-term intraorganizational career
perspective. While some US firms took this approach, these
ideas were not as widely accepted in the USA as in Germany.
However, Peter Hansen assumed that these policies would be
valued by the new US employees of the firm and would provide
an important incen- tive for employee retention.
One morning, Peter Hansen was shocked to learn that John
Miller was about to quit his job. A competitor had offered John
a challenging position – in large part because he had
systematically built up his knowledge and experience base,
supported by his German employer. How can you interpret Peter
Hansen’s surprise from a cultural point of view?
Discussion Questions:
1Relate the described situation to one of the cultural dimensions
identified by Hofstede. Can you explain Peter Hansen’s surprise
using this theory?

3. 2How does this situation compare to comparable situations in
your home country? What are the limits of a cultural
explanation?
3. Case 2.3 Female careers in various environments
Elisabeth Harstad was employed as a trainee at the Norwegian
risk management consultancy DNV when she realized that being
a woman was a barrier. Although trainees were supposed to go
abroad, the company had problems finding a job for Elisabeth in
a foreign subsidiary: “I wanted to go to London, Houston, or
Singapore. In the end I managed to get an international
assignment from Oslo to Copenhagen”.
This was in the 1980s. However, Elisabeth Harstad did not give
up and energetically pursued her career. She is now the manager
of the research and innovation unit at DNV, and since 2006 a
member of the board of directors of the large Norwegian
chemical company Yara. When the new members of the board of
directors were elected, for the first time it was an advantage for
Elisabeth to be a woman. Since 2008, Norwegian companies are
required by law to have 40 per cent female members of their
board of directors. Thus, Elizabeth is part of an experiment – if
women do not make it to the top on their own, politics support
this process in Norway.
Discussion Questions:
1Relate the situation in Norway to one of the cultural
dimensions identified by Hofstede. How can you explain it?
2Can the rules for quotas of female managers be applied in
other countries as well? What are the advantages and
disadvantages?
4. IHRM in Action Case 2.4 Meeting on a Friday in Kenya?
Our building company had finished an important project
concerning a new major road in Kenya. However, the company
had not been paid for all of the completed work. The managing
director of the Kenyan subsidiary of the building corporation
organized a meeting with a representative of the relevant

4. Kenyan government agency.
The meeting started and the representative was very polite and
friendly. However, at the same time he also seemed to be quite
nervous. Every few minutes he received a telephone call or had
to initiate a telephone call himself. All tele- phone discussions
were carried out in the local language. Despite the interruptions,
I tried to explain the reason for my visit – the outstanding
account balance. Of course, the government representative
apologized for every interruption. However, after 15 minutes we
were both very tense because the conversation had not advanced
at all.
Eventually I said that I was sorry that my counterpart had so
much to do and asked for another meeting next Tuesday.
Instantly the government representative was relaxed again and
happily confirmed the new meeting. Now he could finally
concentrate on the preparation and organization of his big
family meeting that weekend, which is typical for large Kenyan
families.
Discussion Questions:
1Relate the described situation to one of the cultural dimensions
identified by Hofstede. How can you explain it?
2How does this situation compare to comparable situations in
your home country? What are the limits of acultural
explanation?
5. Case 5.1 International headhunting
Peculiarities occur in the selection process when external
service providers are assigned to undertake the search for
international managers and are involved in the subsequent
selection. Whereas in the scientific literature there are hardly
any discussions or ideas presented addressing this topic, in
practice headhunting is a commonly used method to fill
international positions. According to Hewitt’s HR Outsourcing
Survey, which includes more than 100 US companies, these
companies pursue four central aims with the transfer of most
(national and international) HR activities to external service

5. providers. Accordingly, most of the companies surveyed (65 per
cent) indicated they want to reduce costs by outsourcing
activities. Furthermore, access to external expertise is attractive
to many companies, as well as improved service quality and the
possibility to more intensively direct internal resources to
strategic HRM. With reference to outsourcing IHRM, the survey
reveals that 43 per cent of the companies revert to the expertise
of external service providers for expatriate management matters
and 56 per cent in repatriation issues; 3 to 4 per cent of the
companies even plan to outsource these areas in the near future.
Concerning recruiting, 10 per cent of the companies surveyed
indicated that they already assigned their recruiting to external
service providers; an additional 6 per cent definitely plan to
outsource their recruiting. As there are no explicit figures
available, one can only speculate how many firms make use of
outsourcing for their international employee selection as well.
However, the specialization of numerous headhunting agencies
and management consultancies in the area of IHRM and
executive search for international managers indicates a high
demand in these areas.
An example is the management consultancy ABC Asian
Business Consultants from South Korea. Not only does it
support companies from different branches in the search and
selection of qualified managers, it also assists firms in
organizing international management training or international
career planning. Currently, seven employees and 15 trainers
work on international projects at the company’s offices in
Korea, China, India, and Germany. Every year, about 15
employee-selection projects are completed by ABC Asian
Business Consul- tants. Headhunting selection criteria and job
profiles are adjusted to the needs of the recruiting company and
the requirements of the vacant position. Due to the high degree
of candidates’ qualifications and confidentiality of information,
the selection process is very complex. First of all, potential
candidates must be identified and personally contacted.
Alternative forms of HR Marketing (for example, activities

6. involving Internet-based plat- forms or social networks) are not
used because of the need for confidentiality. Often, a cover
story is used to identify qualified candidates, seek further
information and evaluate interest. Before the first contact
between the candidate and the recruiting company takes place,
the candidate’s curriculum vitae is evaluated, followed by two
interviews with representatives of ABC Asian Business
Consultants. Interviews via software programs such as ICQ,
Skype or Windows Live Messenger may be used occasionally to
bridge long distances and to conduct the interviews without
national or international relocation. Based on the protocols of
the interviews and the application forms, a short report on every
candidate is compiled and a shortlist of the most qualified
candi- dates is presented to the recruiting company. Ultimately,
final interviews with the candidates are conducted by employees
of the recruiting company, before a final decision on the filling
of the international position is reached. The whole selection
process may cover a period of several months. Occasionally,
international assessment centers are organized using different
methods such as individual presentations, role play, or
presentations to the board of directors.
Based on his past experience, Dr Ulrich Hann, owner and Chief
Executive Officer of ABC Asian Business Consultants, can
identify cultural differences and differences in the
qualifications of candidates from diverse inter- national
backgrounds. Differences depending on the respective
nationality appear, for example, in the personal contact during
the selection interviews. There are also differences regarding
the professional qualifications and skills of candidates. Many
Indian candidates have a very high level of qualifications in
natural sciences, while there is a strong demand for German
candidates with a degree in mechanical engineering.
There are particular challenges for HR consultants in a dynamic
international environment. Dr Hann notes: “Similar to the
requirements for the candidates, the requirements and criteria
for a qualified HR consultant in the international business

7. environment are also high”. Notably, multilingualism is
important to understand the needs of the customers and those of
the candidates. In addition to a professional qualification,
entrepreneurial thinking as well as international work
experience are essential requirements to find a position in a
recruiting company as an external service provider for IHR.
6. IHRM in Action Case 5.2 Role playing: Intercultural
competence
You have been assigned to Mexico for a two-year international
assignment. Your task is to support the development of a new
subsidiary. During the first weeks of your stay in Mexico you
experience again and again that your Mexican employees as
well as your suppliers and customers are never on time. Now
you are sitting in a restaurant and waiting for the Sales Director
of one of your Mexican suppliers. Your meeting was at 12.30,
but it is already 13.00 and the person you were waiting for has
not shown up. As you have another appointment at 13.30 you
ask for the bill, still hungry! Exactly at this moment the Sales
Director shows up – half an hour late. How do you react? What
reaction do you expect from your Mexican partner? Which
reactions would be interculturally competent and which would
not be?
7. IHRM in Action Case 6.1 A rainy expatriate performance
appraisal Richard Hoffman,
a Québécois chemical engineer working for a Canadian-based
energy firm, was given a three- year expatriate assignment in
Venezuela as a technical liaison and environmental protection
project manager. His local project supervisor was Jean, a French
engineer who had lived in French Guiana and then Venezuela
for over 20 years. Richard thought that, as a Francophone from
Quebec, he and Jean would be able to build a quick working
relationship. Rich sent Jean an early email (in French, and not
the usual corporate English) containing what he thought of as
the five most significant goals associated with his assignment –

8. similar to the management- by-objectives section of the more or
less standard performance appraisal forms he had filled out for
years during earlier assignments in Edmonton, Toronto and at
corporate headquarters in Montreal. After several months with
no response from Jean, Richard caught Jean in the hallway
between meetings and asked him about the email and his
progress to date. “Don’t worry about that”, Jean responded
blandly. “Just keep working to the deadlines and I will check
with your co-workers and the other project managers on your
work. Where did you go to engineering school, by the way?”.
Richard waited another six months and was becoming
increasingly anxious as the firm’s annual review week
approached. He finally caught up with Jean on a rainy Friday in
the lobby of the office building as they both waited for their
drivers to arrive. When asked about the upcoming performance
review, Jean snorted and said, “C’est tout fini, it’s all been
taken care of. Make an appointment with my assistant, Louisa,
next week and we can go over the report we have sent to
Montreal”. As Jean stepped gingerly into the rainy Caracas
parking lot, Richard thought back to the last few weeks with his
team, the sometimes loud disagreements with his fellow project
managers, and wondered if it was too late in the day to call his
old supervisor in Toronto.