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PepsicoInternationalizationCulture.edited.docx
ORIGINALITY REPORT
PRIMARY SOURCES
Submitted to UK College of Business and
Computing
Student Paper
Submitted to Kaplan University
Student Paper
Submitted to Central Queensland University
Student Paper
FINAL GRADE
12/0
PepsicoInternationalizationCulture.edited.docx
GRADEMARK REPORT
GENERAL COMMENTS

Instructor
PAGE 1
Comment 1
This is a very general statement
Sp. This word is misspelled. Use a dictionary or spellchecker
when you proofread your
work.
Article Error You may need to use an article before this word.
Consider using the article
the.
P/V You have used the passive voice in this sentence. You may
want to revise it using the
active voice.
Comment 2
(date)
work.
Comment 3
Which organisation?
Comment 4
The reader needs to know some background to a specific

company and its operation in a
second country and the frameworks you will introduce to
analyse the IHRM issues that
arise.
Consider using the article
the.
work.
Comment 5
This is the first mention of the company you are analysing.
Some background needed to
their operation is needed.
work.
Comment 6
Why are you introducing the Philippines here?
Comment 7
assumed?
Comment 8

Are you discussing China or the Philippines?
PAGE 2
work.
P/V You have used the passive voice in this sentence. You may
want to revise it using the
active voice.
Comment 9
You really need to focus on one host country.
PAGE 3
QM
S/V This subject and verb may not agree. Proofread the
sentence to make sure the subject
agrees with the verb.
PAGE 4
Strikethrough.
Comment 11

Reference
APA please
You must use APA version 6. Consider using Refworks or click
HERE to read the guidance
provided by the library.
http://www.library.auckland.ac.nz/subject-
guides/bus/topicguides/apa_for_business.htm
International Human Resource Management: BUSMGT 761
Week 3
5
th
July 2021
Sourcing human resources
for global markets
It can be concluded that an adequate understanding of the
cultural context, as it impacts on the behavior of an
organization’s employees, is of critical importance. Thus, the
results of cross-cultural comparative research may provide
valuable hints to managers about how to cope with employees
from foreign cultures. Furthermore, these research results can
form the basis for the development of intercultural training
measures. These results could also be of great use to HRM in an
international firm because they could assist in undertaking a
structured analysis of the transferability of specific elements of
a parent firm’s existing HR policy to foreign subsidiaries. In
this context, it would be conceivable to decide whether
incentive systems for groups or for individuals would be

effective in a specific culture.
Week 3
Examine various approaches to
international staffing
Examine
Outline pivotal role of international
assignments
Outline
Discuss the key drivers behind
expatriate failure
Discuss
Focus on recruitment and selection as
major factors in the success of global
assignments
Understand
This week expands on the role of staffing, recruitment, and
selection in international operations to sustain international
business operations.
Please go on the link provided on the slide for more detail.
Texas A&M University Associate Management Professor
Anthony Klotz coined the phrase during an interview with
Bloomberg Businessweek and predicts that people who stayed
put during the uncertainty of the pandemic are getting ready to
jump ship. A study by Microsoft found that 41% of the global
workforce would consider leaving their current employer within
the next year.
Why the discontent? It’s the perfect storm, says Shahar Erez,
CEO of the freelance talent platform Stoke.
“The great resignation is propelled by three forces: the changing
generation, the economic crisis, and the realization people have
had that they can have a different social contract, spending
more time with family when they work remote and skip the
commute,” he says.
https://www.fastcompany.com/90646274/the
-

great
-
resignation
-
is
-
here
-
this
-
is
-
how
-
employers
-
should
-
prepare?fbclid=IwAR0MwlIbOZscc_B
tFdjOKn_kbUA5ycppoqGPfY4cNSxLsF9ycAyx36mmozo
Start the conversation about creating a blended workforce with
some full-time people and other independent contractors. You
may even be able to retain some of your talent as independent
contractors.
As people move toward work/life integration, organizations that
support them will be in the best position to retain their
workforce. “Employees now know you don’t have
1
1
1
to give up one for the other to be better,” says Whitlock.

“Organizations have an opportunity to step up and bring
everyone together. Continue building on the good things that
have come out of the pandemic. Our personal lives are deeply
infused into our business interactions. Don’t just turn it off.”
Trends in
IA
KPMG Global
Assignment Policy &
Practices Survey (2019)
The data for the Global Assignment Policies and Practices
survey (GAPP survey) has come from 250 global, cross industry
organisations. 46 percent of the participants are from USA.
Organisations with fewer than 10, 000 employees make up 29
percent of the survey population. The largest representation is
from manufacturing (12 percent), technology (10 percent),
financial services (7 percent), and consumer and retail products
and energy (6 percent each).
Four
approaches to
international
staffing
(
EPRG model by Perlmutter,
1969)
•
Few foreign subsidiaries have autonomy
•
Strategic decisions are made at headquarters
•
Utilise Parent Country Nationals (PCNs)
Ethnocentric
•

Each subsidiary is treated as a distinct national entity
•
Some decision
-
making autonomy
•
Utilise Home Country Nationals (HCNs)
Polycentric
•
Global approach to business
•
Nationality is less important than ability so PCN or HCN
or Third Country National (TCN)
Geocentric
•
Focus on geographic regions
Regiocentric
Ethnocentric: few foreign subsidiaries have any autonomy,
strategic decisions are made at headquarters, key positions in
domestic and foreign operations are held by managers from
headquarters, and subsidiaries are managed by staff from the
home country (PCNs).
Polycentric: each subsidiary is treated as a distinct national
entity with some decision-making autonomy. Subsidiaries are
usually managed by local nationals (HCNs), who are seldom
promoted to positions at headquarters, and PCNs are rarely
transferred to foreign subsidiary operations.
Geocentric: the MNE takes a global approach to its operations,
recognizing that each part (subsidiaries and headquarters)
makes a unique contribution through its unique competence. It
is accompanied by a worldwide integrated business, and
nationality it is less important than ability.
Regiocentric: this approach reflects the geographic strategy and
structure of the MNE. Like the geocentric approach, it utilizes a
wider pool of managers, but in a limited way. Staff may move

outside their home countries, but only within a particular
geographic region. Regional managers may not be promoted to
4
4
4
headquarters positions, but they do enjoy a degree of regional
autonomy in decision making. For example, a US-based MNE
could create three regions: Europe, the Americas, and Asia-
Pacific.
Parent Country Nationals
Advantages Disadvantages
· Facilitates control and co-ordination • Imposing
headquarters culture and
· Effective liaison with home-office management style
personnel • Expatriate adjustment issues (language
· Familiarity for MNE mission, objectives, plus the
socioeconomic, political, policies and practices cultural,
legal environment)
· Global career development opportunities • Family
adjustment
· Staff with the required KSAs, technical • Removes
promotional pipeline / interrupts and managerial competencies
succession planning for HCNs
· Compensation disparity issues and high cost of expatriate
packages
Host Country Nationals
· Familiarity with socio-economic, cultural, • Difficulties

exercising effective control political and legal environment
home-office personnel over subsidiary
· Familiarity with business practices operations
· Continuity of staff and provides • Communication
difficulties opportunity for advancement and • Lack of
opportunity for PCNs (or HCNs)
promotion for locals – improving them to get
international and cross-cultural
commitment and motivation experience
· Lower cost in terms of compensation package and compliance
(Work visas etc)
Third Country Nationals
· Arguable best compromise between • Host country’s
sensitivities with respect to securing technical / managerial
expertise nationals of specific countries (or genders and
adapting to foreign socio-economic or other orientations)
and cultural environment • Lack of opportunity for home
country
· Usually career international business nationals in terms of
promotion managers
· May be better informed than PCNs about the host-country
cultural and institutional environment
· Usually less expensive to maintain than
PCN
Determinants
of staffing
choices
Figure 5.1 (Dowling et al., 2017)

Figure 5.1 (p. 114) outlines the four determinants of staffing
choices in an internationalizing firm:
Context specificities: cultural values may differ considerably
between headquarters and the host country context (e.g., a
cultural similarity between the parent country and subsidiary
country as a moderator in the relationship between MNE
strategy and subsidiary staffing; MNEs tend to staff culturally
distant subsidiaries with PCNs) → Positive effect on labor
productivity. The institutional environment includes, for
example, the legal environment and the education system. The
latter may be directly linked to staff availability on the local
labor market. The type of industry in which the firm is active
may have an impact as well.
Company specificities: the most relevant variables are MNE
structure and strategy, international experience, corporate
governance, and organizational culture.
Local unit specificities: an important factor here is the
establishment method of the subsidiary, i.e., whether it is a
Greenfield investment, a merger, an acquisition, or a shared
partnership. Furthermore, the strategic role of a subsidiary, its
strategic importance for the MNE as a whole, and the related
questions of the need for control
6
6
6
and the locus of decision-making can influence staffing
decisions.
IHRM practices: selection, training and development,
compensation, and career management (including expatriation
and repatriation) play an important role in the development of
effective policies required to sustain a preferred staffing
approach.

These factors influence staffing practices and are
interdependent.
If a company pursues the same staffing approach worldwide, it
means that context and local unit specificities are neglected,
i.e., this could be an ethnocentric approach.
Reasons for
International
Assignments
•
Position filling of managerial and/or technical
roles
•
Trouble
-
shooters
Direct Control
•
Communicate and adopt strategic mission (and
policies & procedures)
•
Facilitators and consultants
Strategic Knowledge Transfer
•
Socialization of locals into corporate values
via informal co
-
ordination and informal
communication networks
•
Network building and boundary spanning
Organisational Development
•
Developing global mindset in high
-

potential
future leaders
Management Development
Contemporary
Modes of
International
Assignment
•
1
-
5
years accompanied by family
Traditional Expatriate
•
6
-
months unaccompanied
12
STA Short Term Assignment
•
Periodic commuting often involving downtime at
home
•
Also known as FIFO
Commuter
•
Less than 1 month
Frequent Int Business Travel
•
TCNs with entrepreneurial global mindset
Self
-
initiated
•

International responsibilities managed from home
country
Virtual
International assignments could be long term (traditional
expatriate) or as short as frequently travelling. With the advent
of technology and post-Covid 19, organisations are making the
best use of virtual teams wherever possible. This has
implications on other HRM functions as an international
assignee does not need to be physically present in another
country and thus, this reduces the administrative tasks involved
with relocation.
The term ‘international assignee’ is used to cover all types of
international assignments.
The following factors need to be considered for virtual teams:
Good skills in communication technologies
Visits to the host country
Be aware of disadvantages (e.g., role conflict, dual allegiance,
identification issues, potential cultural misunderstandings, and
geographic distances that rule out normal group interaction)
Time management of virtual vs. ‘real’ work
The roles of an expatriate
The reasons for using expatriates are not mutually exclusive.
They do, however, underpin expectations about the roles that
staff play as a consequence of being transferred from one
country to another.As an agent of direct control
The use of staff transfers can be regarded as a bureaucratic
control mechanism, where the primary role is that of ensuring
compliance through direct supervision. Such expatriates are also
called as ‘bears’ as it reflects the level f dominance of this type
of expatriate control. To a certain extent, using expatriates for
control reflects an ethnocentric predisposition, but this can be
important in ensuring subsidiary compliance, enabling strategic

objectives for local operations to be achieved.Agent of
socialisation
Expatriates assist in the transfer of shared values and beliefs.
They work as ‘bumble bees’.Network builders
As employees move between various organisational units, their
network of personal relationships changes, thus acting as
‘spiders’.
10
10
10Boundary spanners
Boundary spanning refers to activities such as gathering
information, that bridge internal and external organisational
contexts. Expatriates are considered boundary spanners because
they can collect host-country information, act as representatives
of their firms in the host country, and influence agents.
Language nodes
Fluent in both the host country and home country
language.Transfer of competence and knowledge
International assignments assist in knowledge sharing and
competence transfer and encourage adoption of common work
practices which may strengthen elements of corporate culture.
Thus, they may contribute further to developing the social
capital within the MNE.
GAPP Survey 2019 results
Differences between traditional and short
-
term assignments
Chapter 5
Source: Adapted from M.

Tahvanainen
, D. Welch and V. Worm ‘Implications of
Short
-
term International
Assignments
’,
European Management Journal
, Vol. 23, No. 6 (2005), p. 669, with permission from Elsevier.
A traditional assignment provides for good relationships with
colleagues and constant monitoring, a plus for knowing you are
doing things as expected. However, traditional assignments are
expensive, less flexible, and often require dual-career
considerations for the spouse and family of the expatriate.
Short term assignments are more flexible, simple, and cost-
effective. However, work permits, tax issues, and poor
relationships and their side-effects such as alcoholism and high
divorce rates also tend to occur with short-term assignments.
See pp. 116-120, especially table 5.2.
Reasons for declining long
-
term
assignment
Source: Brookfield Relocation Services, 2016
38
%
19
%
13
%
12
%
7
%

11
%
General family concerns
Partner's career
Failure to support career
aspirations
Inadequate compensation
Quality of life at location
Other
Family remains the biggest reason why people may be reluctant
for international assignments. Partner’s career is also another
key reason people may be unwilling to move countries.
Factors that
influence
effectiveness
of
international
assignments
Open environment
•
Support for cross
-
fertilization of ideas
•
Implementation of
best practice
Knowledge/info travels
freely between
expatriate, host
country, and parent
country
Consideration for
personal networks
Some knowledge

transfer requires
longer assignments
Expatriate’s ability
and motivation to
act as an agent of
knowledge transfer
Abilities, motivations,
relationships of locals
These 6 factors impact on how effective an international
assignee/expatriate will be for the international assignments.
Open environment with support for cross-fertilization of ideas
and implementation of best practices
Knowledge/info travels freely between expatriate, host country,
and parent country
Consideration for personal networks
Some knowledge transfer requires longer assignments (e.g.,
where there is much tastiness)
Expatriate’s ability & motivation to act as an agent of
knowledge transfer Abilities, motivations, relationships of
locals
See p. 120-121.
Expatriate Failure: Defined
· “premature end to an international assignment”
· “premature end caused by a reason” (underperformance, or
similar, during the assignment)
· repatriate turnover (expatriate leaving the company shortly
after repatriation) and repatriation problems
Source: Harzing, A., & Christensen, C. (2004) "Expatriate
failure: time to abandon the concept?", Career Development
International, 9 (7), pp.616-626,
https://doiorg.ezproxy.auckland.ac.nz/10.1108/13620430410570
329
Expatriate failure is defined as the premature return of an
expatriate before the assignment has been completed. See p. 125

of your textbook.
While expatriate failure is often overestimated in publications,
MNEs should nevertheless be concerned about it, because this is
an ongoing challenge that is associated with both direct and
indirect costs.
Direct costs include airfares and associated relocation expenses,
as well as salary and training.
The ‘invisible’ or indirect costs are harder to quantify in
monetary terms, but they can prove to be more expensive for
firms. Failure to address these costs may result in loss of market
share, difficulties with host-government officials, and demands
that expatriates be replaced with HCNs (affecting the MNC’s
general staffing approach).
The possible effect on local staff is that morale and productivity
could suffer.
Expatriate Failure : Rates
Table 5.3 (Dowling et al., 2017)
Source: R. L. Tung ‘Selection and Training Procedures of U.S.,
European, and Japanese Multinationals’ (1982), California
Management Review, 25 (1), pp. 57-71 and p. 164; Z. Tungli
and M. Peiperl ‘Expatriate Practices in German, Japanese, U.K.,
and U.S.
Multinational Companies: A Comparitive Survey of Changes’,
Human Resource Management (2009) Vol. 48, No. 1 (2009), pp.
153-171. Reproduced with permission.
Expatriate Failure: Reasons for…
Personal factors
· Inability to adapt (manager or spouse)
· Family problems
· Partner dissatisfaction
· Problems coping with higher responsibilities Firm-specific
issues
· Lack of support for expat and family
· Poor candidate selection

Most common reasons for expatriate failure.
Selection criteria, possibly compounded by ineffective
expatriate management policies
Failure to adapt, poor performance
Spouse/partner dissatisfaction and other family concerns
See p. 133.
Expatriate Failure: Cost of…
Direct
· Airfare, relocation expenses
Indirect
· Contact with host government officials, key clients
· Loss of market share
· Effect on local staff (morale and productivity)
· Effect on expat and family
The costs of expatriate failure can be both direct and indirect.
The direct costs include airfares and associated relocation
expenses, salary and training. The precise amount varies
depending on the position, country of designation, exchange
rates, and whether the ‘failed’ manager is replaced by another
expatriate.
The invisible or indirect costs are harder to quantify in
monetary terms but can prove to be more expensive for firms.
Failure at this level may result in loss of market share,
difficulties with host government officials and demands that
expatriates be placed with HCNs (thus affecting the
multinational’s general staffing approach).
Recruitment and
selection
Talent Management
Talent management is defined as: “The identification, nurture,
progress, reward, and retention of key individuals who can aid
the

development of organisational sustainability”
(Marchington, Wilkinson, Donnelly, & Kynighou, 2016, p. 205)
This could be seen as involving the whole range of people-
management activities! But most importantly, it is about
planning supply and demand. Talent Management
It is a catch-all for so many different areas of HRM!
Talent needs to be retained. But orgs do not always identify
their most talented employees.
There’s less loyalty now. 4 years average tenure
Talent management = the identification, nurture, progress,
reward, and retention of key individuals who can aid the
development of organizational sustainability. The exclusive
versus inclusive view:
Exclusive: ‘war for talent’: Identify a small number of
individuals who could make a big impact on organisations.
Grade employees from A to C, typically the top 20% are graded
A and resources are focused on them.
Inclusive: The opportunity for all employees to reach their full
potential. Treat all employees as talent. A more even
distribution of resources.
13
13
13
23 Organisations take a variety of approaches in defining talent.
Thite
(2018)
24
Definitions
25
Selection
=

Validly, reliably, and lawfully
discriminating between job applicants, in order to hire
an employee who best matches a job and/or
organisation’s requirements (Macky 2008).
Recruitment
=
Attracting people with the required
Knowledge, skills and attributes (KSAs), or
competencies, to apply for available positions within
an organisation (
Macky
, 2008)
Planning
=
Identifying current and future staffing
needs and developing plans to meet those needs. This
includes forecasting supply and demand, the creation
of job descriptions and person specifications, and
competency frameworks.
“Recruitment and selection are the foundation of all other HR
activities. Get it wrong and it doesn’t matter how good the
development programme is, how well an employer motivates its
staff, how well it manages their performance, or even how well
it rewards them – it is always making up for that one bad
decision”.
“Firms should hire motivated capability” – i.e., people who can
and will do the job.
Broadly, this will be about:
Planning: The purpose is to identify current and future staffing
needs and plan to meet those needs using internal and external
labour supply. (This week!)
Recruitment: The purpose of recruitment is to attract people
with the required knowledge, skills, and attributes, or
competencies, to apply for available positions in an
organization (Macky, 2008) (This week and maybe next!)

Selection: The purpose is to validly, reliably, and lawfully
discriminate between job applicants, in order to hire an
employee who best matches a job or organisation’s
requirements. (Next week!)
25
The difference between these three is important to understand.
Recruitment: Goals
The ultimate goal of recruitment and selection: to find the right
person for the right job at the right time Pre-hire:
· The right candidates apply
· Candidates stay in the pool
· Candidates intend to accept an offer if it’s made Post-hire:
· Low turnover of new hires
· Job performance of recent hires
· Positive attitudes of recent hires: high job satisfaction,
commitment, wellbeing, etc.
The effectiveness of recruitment can be gauged from pre-hire
and post-hire goals.
Recruitment: International v Domestic
IHRM has:
· Smaller number of external recruits
· Preference for internal recruitment
To reduce selection risk
To secure present and past human capital investments
· To consider country of assignment
· Family impact relevant
There is a considerable difference when recruitment is seen

from IHRM lens as opposed to HRM lens. Although IHRM
recruitment is involved with less numbers, however, there are
complexities involved in terms of finding the right person who
would be successful in that particular country’s environment.
Family factors are extremely important as the move has
implications for the entire family.
Selection process
Factors such as technical ability, cross‐ cultural suitability,
family requirements, MNE requirements, language, and
country/cultural requirements are all relevant and are illustrated
in Figure 5.3 (p. 128).
Developing appropriate criteria is a critical IHRM issue.
Selection is a two-way process between the individual and the
organisation. A prospective candidate may reject the expatriate
assignment, either for individual reasons such as family
considerations, or for situational factors such as perceived
toughness of a particular culture. It is a challenge for those
responsible for selecting staff for international assignments to
determine appropriate selection criteria. The factors in the
above slide deal with factors involved in expatriate selection,
both in terms of the individual and the specifics of the situation
concerned. These factors are inter-related.
Selection in practice…
· recruitment and selection process is often informal, closed and
politicised
· HR is usually only involved late
· even after the selection decision has been made and with too
little time to do any meaningful cross-cultural training.
· especially an issue when it comes to Short Term Assignees
and other globally mobile employees who are not on traditional
long-term assignment
· over-emphasis on current ability/ skills
· personal & family factors are given insufficient weighting

· performing well in the home country does not mean this will
simply translate over into a new and often very different
environment
Once the selection criteria for international assignments have
been defined, processes need to be put in place to measure these
criteria. However, it is relatively common in many MNEs that
international selection processes can be rather informal. Most
MNEs admit that technical and/or managerial skills are the
dominant, and sometimes, only criteria used. Reliance on
technical skills is mainly due to the fact that the reason for most
international assignments is ‘position filling’.
Formal selection process
However, MNEs sometimes adopt formal processes, which can
be influenced by the maturity of the MNE, its stage in the
internationalisation process and its size or industry. The type of
position involved, the role of the HR function in the process,
and whether the multinational is reactive rather than proactive
where international selection is involved remains key factors in
how selection processes work in MNEs.
25
25
25
GAPP Survey 2019 GAPP Survey 2019 Although this is not an
international example but is shows a trend where employers
may look at non-traditional sources of recruitment. Visit the
link given on the slide to read about this article.
IHRM
solutions for

dual career
couples
Inter
-
firm networking
Job
-
hunting assistance
Intra
-
firm employment
On
-
assignment career support
The case of
‘Female
Expatriates’
An increasing number
are women IAs; up to
around 20
-
% from
22
3
% in the 1980’s
Barrier? Family
Commitments
Barrier? Dual Careers
Increasingly
formalized
recruitment &
selection
Discrimination?
Paternalistic attitudes
and cultural barriers
Discrimination? ‘She

must
be exceptional’
https://www.tvnz.co.nz/one
-
news/new
-
zealand/hawkes
-
bay
-
employer
-
winning
-
workers
-
unorthodox
-
hiring
-
strategy
-
not
-
worried
-
cv
-
looks
Dual career couples are a constraining factor for MNEs wanting
to hire for international assignments. The rise in dual career
couples, along with the ageing population and other family-
related situations, combine to make more people immobile.
MNEs are aware of the dual couple challenge and have reacted
by providing a series of resources. Important support measures

include language training, educational assistance, employer -
sponsored work permits and assistance with career planning.
Some of the unique challenges faced by women expatriates are:
Other non-PCN cultures may not be as accepting about women
in the workplace. Women expatriates may have larger cultural
hurdles to overcome on their way to being successful.
Related to this challenge is overcoming typically HR directors’
attitudes towards women, since these managers tend to be
HCNs.
The dual career issue may be greater for women: fewer men may
be willing to accompany their spouse abroad.
The
expatriate
glass ceiling
Table 5.6 (Dowling et al., 2017)
See pp. 137-139.
In 2020, as 114 million jobs were lost across the globe,
employment losses were more for women than for men. And
studies have found that during the crisis women assumed
additional responsibilities, such as taking on more household,
childcare and other caring duties – while continuing to work.
The Deloitte 2021 survey is from 5000 women participants
across 10 countries between November 2020 and March 2021.
The survey probed several areas related to their work lives,
including their experiences during the pandemic and career
expectations for the future.
Deloitte 2021: Women @ Work
–
A Global Outlook
77% of participants said that their job workload has increased
as a result of the pandemic.
66% say they have the greatest responsibility for household
tasks and more than half of those with children say they handle

the majority of childcare.
Healthy boundaries between work and home have deteriorated.
Only 22% of women believe that their employers have enabled
them to establish clear boundaries between work and personal
hours.
More than half have experienced some form of microaggression
or harassment in the
25
25
25
past year, ranging from the belief that their judgment is being
questioned because they are women.
The data also shows that many of these events go unreported to
employers, with concerns over career penalty being one of the
main reasons cited. Almost a quarter of the women surveyed are
considering leaving the workforce altogether as a result of their
experience during the pandemic. The data also shows a link to
workplace culture, with more than twice as many women who
say they experienced noninclusive behaviours planning to leave
the workforce altogether due to Covid-10 as those who have
not.
The top reason cited overall for leaving their employer is lack
of work-life balance, but women who have experienced non-
inclusive behaviours are almost four times more likely to cite
disagreement with their company’s values as a reason why they
are considering leaving.
All of the women who were surveyed who work for gender
equity leaders say they feel like their careers are progressing at
a satisfactory rate.

The importance of the opportunity for development is also
reflected by the responses when women were asked for the
number one step organisations can take to improve gender
equality.
Providing better learning opportunities, more interesting
projects, and/or stretch assignments is one of the two most cited
things organisations can do to support women’s development
and ensure they stay. But the data shows that only a minority of
employers are currently offering such opportunities.
Summary
Examined various approaches to international
staffing
assignments
Discuss the key drivers behind expatriate
failure
Focused on recruitment and selection as major
factors in the success of global assignments
To summarise, recruitment and selection decisions in IHRM
have serious implications in terms of an expatriate’s
performance and hence, should be dealt with caution and care.
37
37
37
International Human Resource Management:
BUSMGT 761
Week 4:
12
th
July 2021

Performance
Management
To recap, recruitment and selection decisions in IHRM have
serious implications in terms of an expatriate’s performance and
hence, should be dealt with caution and care.
Task/in
-
role
performance
•
When employees use technical
skills and knowledge to produce
goods or services through the
organization's core technical
processes, or
•
When they accomplish specialized
tasks that support these core
functions, they are engaging in task
performance.
•
Directly related to the job
•
Usually presented in job description
Week 3
recap
Examined various approaches to international
staffing
assignments
Discuss the key drivers behind expatriate
failure
Focused on recruitment and selection as major
factors in the success of global assignmen ts

The aim of this week is to draw together the relevant literature
on performance management in the international context as it
relates to IHRM. The focus is on the subsidiary context,
reflecting historical bias towards subsidiary management in the
international business and performance management literature,
although the focus is broadening. The approach is to identify
those aspects that require a substantial modification of
traditional performance management practices (especially
appraisal criteria, the roles of various actors in the processes,
and the processes themselves) that are imposed by international
operations.
Objectives
Define Performance
Define
Understand Performance Management as a process
Understand
Multinational Performance Management at the
global and the local level
Discuss
Performance Management as part of the MNE’s
control system
Outline
Factors associated with expatriate performance
Examine
Before we look at performance management, let us understand
what ‘performance’ means.
Performance
Task/in
-
role
performance
Contextual/extra
-
role
performance

Although many academics choose the word ‘job performance’,
however, performance can be seen as either task or in-role
performance and contextual or extra-role performance.
As the name suggests task performance is the core of an
employee’s job and this is what the employee is expected to
deliver. Examples of task performance can be, achieving sales
targets, finishing projects within a timeframe or increased
productivity.
But employees do not only come to the job and focus on their
tasks or roles. They also depict extra role performance, such as
participating in company programmes, volunteering for an
extra-curricular activity, or helping out a colleague with extra
work.
Although employees are not expected to go out of their job
boundaries, however, you will increasingly find that the
boundaries between task and contextual performance are
blurred. Organisations expect employees to perform extra-role
activities. Research also shows that employees who are more
involved with organisational activities are more satisfied with
their jobs and have an enhanced sense of commitment.
Contextual/extra
-
role Performance
•
Persisting with enthusiasm and extra
effort as necessary to complete own
task activities successfully
•
Volunteering to carry out task
activities that are not formally part of
own job.
•
Helping and cooperating with others.
•
Following organizational rules and

procedures.
•
Endorsing, supporting, and
defending organizational objectives
We can understand individual performance through the AMO
model, where A is ability, M is motivation and O is opportunity.
Boxall and Purcell (2016) state that how much an individual
will perform depends upon their ability to do the job
(experience, education, skills, knowledge), how motivated they
are to perform (intrinsically and/or extrinsically), and the
opportunities that they perceive in the environment (e.g., degree
of autonomy, freedom to be part of cross-functional teams) in
order to enable them to give performance. How much ability,
motivation and opportunity an individual enjoys depends upon
both a) individual (e.g., experience, health) and b) situational
(e.g., organisational policies and practices, type of
organisation) factors. Hence, depending on their own individual
and situational factors, individuals display varying levels of
ability and motivation and enjoy different opportunities, and
this then ultimately has an impact on their performance levels.
Organisational Goal Setting…
Balanced Scorecard (BSC)
Triple Bottom Line
Goals are set at the organisational level and then distributed at
the individual/team level. It is important to remember that
performance may also occur outside the goals set by the
organisation. For example, favourable tax incentives may
enhance the bottom line of an organisation.
At the organisational level, a balanced way of looking at
performance would be to achieve on outcomes related to
financials, customers, internal business processes and learning
and growth.
However, organisations are also increasingly focusing on the
triple bottom line with focus on people, planet and profitability.

Click on the link provided on the slide to read more on this
example.
Performance management is a process for strategy
implementation, a vehicle for culture change, and it provides
input to other HR systems such as development and
remuneration.
1. Job analysis and design
2. Performance goal setting
Performance (mutual)communicate mutual expectations
management 3. Performance appraisal process 4. Feedback
5. Feeding into a) rewards, b) training and development, c)
work redesign
The performance management process can be broken down into
four key activities that, in practice, tend to overlap. These are
illustrated in Figure 10.1 (textbook page 317). The key
categories are:
· Performance planning
· Performance coaching and mentoring
· Performance appraisal
· Performance feedback.
Figure 6.1 from your textbook illustrates the major issues,
actions and decision processes related to performance
management in the international context. This model allows us
to investigate the complex interaction between local and global
contexts for performance and the tasks of the actors,
performance criteria, purposes for and timing of performance
management as these elements relate to individual and firm
outcomes. It provides a convenient starting point for our
exploration of the link between the MNEs internationalisation
strategies, its goals for individual units in terms of contribution
to global profitability, and the performance management of
individual employees, whether PCN, TCN, or HCN. The aspects
of these relationships are critical as an individual’s performance
is appraised (or evaluated) according to expectations of

appropriate outcomes and behaviour that contribute to
organisational goal attainment.
A Model of
MNE
Performance
Management
Goal:
contribution
to
global
profitability
&
wellbeing
Outcomes
and
behaviors
(
Figure
6.1)
There are five constraints to evaluating subsidiary performance
against an MNE’s expectations for it:
Whole vs. part – the performance of a subsidiary may look poor
taken alone, but good in the context of what it is expected of it
for the MNE; for example, if it’s purpose is to undercut a
competitor’s prices.
Non-comparable data – is a key constraint that affects goal
attainment for an MNE subsidiary. Non-comparable data is not
easily interpretable or reliable. For example, a subsidiary may
register skyrocketing sales, but accounting rules in the host
country may be over-counting sales compared to how they
would be measured in the MNE parent country. In terms of the
performance appraisal, non-comparable data can’t just be
plugged into a general rewards system algorithm to determine
rewards or punishment.
MNE

performance
management
constraints
•
Whole vs. part
•
Non
-
comparable data
•
Volatility in the global business
environment
•
Separation by time and distance
•
Variable levels of maturity
across markets:
the need for relevant
comparative data
Volatility in the global business environment – the approach
must be flexible so that subsidiary is always pursuing strategies
that fit the current environment.
Separation by time and distance – video conferencing, chats,
and emails are not full
1
1
1
replacement for regular and frequent face to face contact
between subsidiary managers and corporate staff.
The variable levels of maturity across markets – without the
supporting infrastructure of the parent, market development may
take longer at the subsidiary.
See pp. 151-153.

Control and performance m
ana
g
e
m
en
t
14
(
Figure
6.2)
Monitoring performance allows an MNE to ensure conformity to
agreed-upon standards.
Performance management enables the MNE to evaluate and
continuously improve individual, subsidiary, and corporate
performance against pre-defined pre-set goals and targets which
take the MNE in the direction it wants to go.
See p. 156.
https://www.payscale.com/compensation
-
today/2018/08/performance
-
management
-
techniques
example.
Variables affecting
IA
performance
See more

in
chapter
8
(
Figure
6.3)
Technical competence is a necessary but insufficient condition
for successful international performance. Cross-cultural
interpersonal skills, sensitivity to foreign norms and values, and
ease of adaptation to unfamiliar environments are just a few of
the managerial characteristics most multinationals seek when
selecting international managers.
Figure 6.3 (p. 155) lists five factors related to expatriate
performance:
Compensation package: important for motivation and
commitment.
Task performance: various tasks include chief executive officer,
structure reproducer, troubleshooter, and operative. These
different tasks can be linked to four types of assignment
(technical, developmental, strategic, and functional).
Furthermore, role clarity, and job similarity (abroad vs.
domestically) may have an impact on the performance of an
expatriate.
Level of HQ support that is provided to the individual and the
family.
Host environment: the type of operation is important (wholly
owned subsidiary vs.
13
13
13
IJV) as well as the stage of international business.
Cultural adjustment—self and family: difficulties in adjustment
impact on performance and are often the cause of expatriate
‘failure’.

In summary, expatriate performance management is much more
complex than performance management on a national level, as
more influence factors need to be considered in an international
environment.
16
16
16Types of assignments
Direct Control
· Position filling of managerial and/or technical roles
· Trouble-shooters
Strategic Knowledge Transfer
•Reasons for Communicate and adopt strategic mission (and
policies & procedures)
•International Facilitators and consultants Organisational
Development Assignments
· Socialization of locals into corporate values via informal co -
ordination and informal communication networks
PCN role conception
Figure 6.4
Source: Adapted
from
Torbiörn,
I.
The
structure
of managerial
roles
in
cross
-
cultural settings.
International
Studies
of
Management

and Organization 15
(1)
,
p.
60
· Network building and boundary spanning
Management Development
· Developing global mindset in high-potential future leaders
Performance
Management process should reflect the goals of the assignment
16
16
16
Expatriates are assigned to foreign operations to fulfil specific
tasks and performance objectives for each individual should
reflect these tasks.
Communication of role conception from the multinational to the
expatriate is indicated by the straight arrows. Role conception is
also communicated to the role recipient by host-country
stakeholders (e.g., subsidiary employees, host government
officials, customer, suppliers, etc.) as shown in the dashed
arrows. This, however, crosses a cultural boundary. Role
behaviour provides the feedback loop, again at two levels: the
MNE and the host-country stakeholders. Trying to perform to
differing expectations may cause role conflict.
If PCN managers adapt their role behaviour according to the
role conception communicated in the host environment, it may
conflict with that predetermined at headquarters. From the
perspective of headquarters, commitment to the parent is
perceived as important, given the part that the PCN plays in
transferring know-how and the ‘preferred way of doing things’
into the subsidiary. This helps to explain the preference for
using headquarters’ standards in expatriate performance
appraisal as a control mechanism.

Communication of role conception from the multinational to the
expatriate is indicated by the straight arrows. Role conception is
also communicated to the role recipient by host-country
stakeholders (e.g., subsidiary employees, host government
officials, customer, suppliers, etc.) as shown in the dashed
arrows.
Role expectations are likely to be more complex for the TCN
than the PCN, as the role is defined by and performed in two
different countries. That is, role conception crosses two cultural
boundaries, as shown in Figure 6.5. Parent and host country role
senders may have differing expectations of role behaviour, that,
in turn, are different to the accepted managerial behaviour
defined by the prevailing norms in the TCN’s own country. For
example, a US manager working for a Dutch multinational
posted as a TCN in Indonesia may face added difficulties. The
American’s role behaviour may be deemed inappropriate by
both the parent (Dutch multinational) and the host nationals
(Indonesians).
H
CN role conception
Figure 6.6
In terms of task performance and potential role conflict, as can
be seen from Figure 6.6, HCN managers face particular role
concerns that are different from those of PCN and TCN
managers. The HCN manager is expected to perform a role that
is conceptualised by a psychologically and physically distant
parent company but enacted in an environment with other role
senders who are both psychologically and physically close.
Parent company role conception is communicated to the HCN,
but it crosses the cultural boundary, as does feedback expressed,
as the HCN’s role behaviour (the straight arrows in Figure 6.6).
Input from host country role senders, though, does not cross a
cultural boundary. The HCN receives role expectations and
encacts role behaviours in his or her own cultural environment.

The performance management process of international assignees
typically follows three steps: goal setting, performance
appraisal, and feedback.
Performance
management
of
IA’s…
P
er
f
or
m
an
c
e
appraisal
22
Feedback
–
pay
&
promotion
–
training
and
development
Goal
setting
(
tasks
)
–
negotiated
or
assigned

Goal setting includes details of the goals, and this depends on
the type of assignment that the IA is on.
Performance
management
of
IA’s…
23
Which performance
criteria?
•
Hard
goals (Task)
–
objective, quantifiable
results
•
Soft
goals
–
interpersonal
skills; how results
are achieved, incl.
ethics
•
Contextual
goals
–
activities that
contribute
to
the
social
and
psychological
core
of the

organization
•
Head Office or subsidiary specific goals?
Goal
setting
)
tasks
(
–
negotiated
or
assigned
Appraising performance is a complex task as there are lot of
variables to be considered. For example, who will conduct the
appraisal, what would the setting be, how frequently does it
need to happen.
Performance
management
of
IA’s…
24
Standard or customized??
•
Standard form allows for cross
-
employee
comparisons
•
Performance
context
requires customisation
Who
conducts
the
appraisal?

•
Immediate
supervisor
(
near
or
far)
•
Multiple
raters
•
360
0
Frequency of
appraisal?
•
Annual? Bi
-
Annual?
•
Formal v informal setting?
P
er
f
or
m
an
c
e
appraisal
The performance appraisal needs to feed into other areas such
as reward, training, job design etc.
Performance
management
of

IA’s…
25
Timeliness?
•
Difficult to provide to expatriates
if conducted from head office
Medium / Channel?
•
Zoom (now we’re all experts)
Feedback
–
pay
&
promotion
–
training
and
development
· Performance criteria and goals for nonstandard work
· Criteria for performance is subject to cultural differences
Non-• Isolating international dimensions of job
performance is not as straightforward as for
expatriate traditional expatriate jobs performance •
Outstanding/under-performance and
failures will challenge performance
management appraisal process
· Performance appraisals are complicated
challenges by international context, outside
appraisers
· Ways to improve and what to reward is unclear
· Impact of non-standard work on HCN coworkers
Non-expatriates, such as, international business travellers or
frequent flyers also face performance management issues and

there is lot of complexity inherent in the system.
Aligning
individual and company goals
Rewarding
performance
Identifying
poor performers
Avoiding
legal troubles
Performance Appraisal: Current challenges
Performance appraisal is fraught with challenges. Aligning
individual and company goals may not always be easy. Linking
rewards to performance may be tricky, especially if the
performance criteria are not objective. It may be difficult to
identify poor performance of individuals as the subsidiary
performance may be positively impacted by factors beyond the
individual control of the expatriates, even though such
expatriates may be poor performers. Managing performance is
another slippery area; if not done correctly could land the
company into lawsuits and legal problems.
Post Covid-19, more and more companies are using ‘digital’
rather than ‘physical’ workplaces. We use technology to interact
with business processes, collect and analyse data, and draft
reports; to communicate, collaborate, and knit teams together
across spatial and organisational boundaries. Work is now
digital and mobile.
Working in digital spaces creates a challenge for organisations.
Practices and norms that derive productivity in the physical
workplace don’t necessarily work as well in the digital one, and
may even be counterproductive. You can’t encourage remote
workers to connect with each other by putting board games in
the office lounge or providing a catered lunch.
https://www.top
-
employers.com/en/insights/performance
-

management/webinar
-
takeaways
-
your
-
people
-
are
-
greater
-
than
-
number/
Deloitte Insights, 2021
Their study identifies three attributes common to productive
digital teams: psychological safety, digital competence, and
management support for experimentation and flexibility.
Organisations all over the world are redesigning their
performance management systems to keep up with the times.
The traditional methods alone may not be as effective.
Current Trend: Redesigning PM
•
Continuous feedback utilising
online tools focused on
improving current
performance
•
Expectations of continuous
learning and developing skills
required for the future
•
Big data driven decisions
–

limiting bias
•
Team based PM reflecting
team based working
https://www2.deloitte.com/insights/us/en/focus/human
-
capital
-
trends/2017/redesigning
-
performance
-
management.html
example.
https://qz.com/428813/ge
-
performance
-
review
-
strategy
-
shift/
https://www.clearreview.com/top
-
5
-
performance
-
management
-
case
-
studies/

In
2015
, under
CEO
Jeff Immelt,
GE
announced it was replac
ing this approach
with
fre
quent feed
back
and reg
u
lar con
ver
sa
tions called”
touch
points
” to
review progress against agreed near
-
term goals. This new approach was sup
-
port
ed by an online and mobile app, which enables employ
ees to cap
ture
progress against their goals, give their peers feed
back
and also
request
feedback. The new app is called “[email protected]” for
“performance development at
GE”.

example.
Adobe replaced annu
al appraisals with reg
u
lar one
-
on
-
one
check
-
ins
, sup
port
ed by
fre
quent feed
-
back
—
both pos
i
tive and con
struc
tive. There are
no per
for
mance rat
ings
or rank
ings and they
allow dif
fer
ent parts of the organ

i
sa
tion to deter
mine how fre
quent
ly they should hold check
-
in
con
ver
sa
tions, based on their work cycles. Now that forced rank
ing has been abol
ished, employ
ees
at Adobe are assessed based on
how well they meet their goals
. Man
agers are also trained on the
nuances of giv
ing and receiv
ing feedback.
The result has been a
marked increase in employ
ee engage
ment, with
vol
un
tary turnover decreas
-
ing by
30
%
since check
-
ins were intro

duced.
https://www.forbes.com/sites/davidburkus/2016/06/01/how
-
adobe
-
scrapped
-
its
-
performance
-
review
-
system
-
and
-
why
-
it
-
worked/#fe0fe585
5
e8f
https://www.clearreview.com/top
-
5
-
performance
-
management
-
case
-
studies/

example.
Broadening out the discussion to the multinational level and
addressing performance management and appraisal concerns
related to non-expatriates and those on nonstandard
assignments, has been useful in reminding us that there are
many dimensions to international business operations that need
to be considered when designing an effective performance
management system in the multinational context.
Summary
Definition
and types of performance of individual
employees
The
basic components
of performance
management system for international employees
Factors associated with
International Assignee
performance
Trends
in performance appraisal
These are some lecture notes that may be helpful for your
revision.
International Human
Resource
Management:
BUSMGT 761
I always encourage students to study course content not only to
get good grades, which are important, but also to derive life

lessons. So, when you study this paper, think about what you
would learn about people management that could help you in
navigating your personal life and relationships. I believe that
our identity shapes our work and studies and at the same time
our work/studies also shape who we are and what we are
becoming.
This course will help you to understand the core concepts of
human resource management and practical realities of managing
employees across national boundaries in multinational
enterprises and in different cultural contexts. This course will
facilitate development of a broad understanding of the core
functions of HRM in any organisation, and the additional
challenges a global, culturally diverse organisation faces.
Each week will focus on one main functional area of IHRM.
These will be discussed in detail during Week 1 TBL
The purpose of this week is to provide an overview of the
emerging field of international HRM by:
1) Defining key terms in IHRM and considering several
definitions of IHRM.
2) Introducing the historically significant issue of expatriate
assignment management and reviewing the evolution of these
assignments to reflect increasing diversity regarding what
constitutes international work and the type and length of
international assignments.
3) Outlining the differences between domestic and IHRM by
looking at six factors: more HR activities
the need for a broader perspective more involvement in
employees’ personal lives
changes in emphasis based on variances in the workforce mix of
expatriates and locals risk exposure more external influences
and detailing a model which summarizes the variables that
moderate
these differences.
1
1

1
4) Presenting the complexity of IHRM, the increasing potential
for challenges to existing IHRM practices and current models
and developing an increasing awareness of the wide number of
choices within IHRM practices due to increased transparency
and the faster and more detailed diffusion of these practices
across organizational units and firms.
We will conclude that the complexity from operating in
different countries and employing different national categories
of employees is a key variable in differentiating between
domestic and IHRM, rather than any major differences between
the HR activities performed.
6
What is HRM?
HRM refers to those activities (policies and
practices) undertaken by an organisation to
effectively utilise its
human resources (HR) (to achieve the organisation goals).
Human Resource Management or People Management is about
hiring the right people, at the right time, and right cost to
achieve organisational objectives.
HRM policies and practices influence the relationship between
an employer and an employee. That’s why you read in news how
some organisations are great places to work, whereas some are
toxic workplaces.
Policies and practices in managing employees are important.
Happy employees make productive workplaces.
HRM is essential for:
· HR professionals (to understand fundamentals of people
management)
· Line managers (who directly manage employees and are quite
responsible for their development and retention)
7
· Entrepreneurs (when organisations are small, entrepreneurs
are quite involved in hiring, developing, and compensating

employees. When organisations grow in size, entrepreneurs stay
involved with key HRM functions related to their talent
pipeline/top leadership team).
· Lastly, study of HRM teaches us a lot about managing people
in our personal lives.
7
HRM Processes/Activities
Performance
Ability
Motivation
Environment
•
Human
resource/manpower
planning
•
Sourcing/Staffing: recruitment &
selection
•
Performance
management
•
Training
&
development
•
Compensation
&
benefits
•
Industrial
(

employment)
relations
One way of looking at HRM is a series of different functions
that are concerned with different aspect of workforce
management. There are connections between each of these
functions and increasingly, the practice of HRM is seen as being
holistic, that is, it is about connecting functions in a way that
produces systems and processes that are consistent and
complementary.
AND for anyone who has ever HAD a job (even flipping
burgers) you have been at the receiving end of those HRM
processes.
What is IHRM?
Concerned with the human resource problems of multinational
firms in foreign subsidiaries (such as expatriate
management) or, more broadly, with the
unfolding HR issues that are associated with the various stages
of the internationalisation
process (Boxall, 1995)
How MNCs manage their geographically dispersed workforce in
order to leverage
their HR resources for both local and global
competitive advantage (Scullion, 2005)
IHRM applies an international lens to HRM. It’s about
managing people who work in organisations that have
offices/presence in more than one country.
https://www.glassdoor.com/Award/Best-Places-to-Work-
LST_KQ0,19.htm
Why is people management important?
It’s people who achieve individual and organisational goals, and
thus provide companies sustained competitive advantage.
https://www.glassdoor.com/Award/Best
-

Places
-
to
-
Work
-
LST_KQ0,19.htm
Glassdoor best places to work.
Glassdoor is an American website where current and former
employees anonymously review companies. Glassdoor also
allows users to anonymously submit and view salaries as well as
search and apply for jobs on its platform. In 2018, the company
was acquired by the Japanese firm, Recruit Holdings, for
US$1.2 billion.
Each year Glassdoor ranks overall company ratings to determine
its annual Employees’ Choice Awards, also known as the Best
Places to Work Awards
Interrelationships Between Approaches in
the Field
Textbook Figure 1.1
Lecture 2
Lecture 3, 4, 5 & 6
Lecture 7 & 8
3 broad approaches in the field of IHRM:
1. First approach emphasises cross-cultural management i.e.,
examining human behaviour within organisations but from an
international perspective.
2. Second approach focuses on comparing and analysing HRM
approaches in various countries.
3. Third approach focuses on HRM in multinational firms and
would be the main focus of this course.
As Figure 1.1 demonstrates, there are overlaps between the
three approaches.

IHRM is more
Complex
than HRM
•
International HR activities
•
A need for a broader perspective
•
More involvement in employees’
personal lives
•
Changes of emphasis as
the mix of expatriates and locals varies
•
More risk exposure
•
Broader external influences
Domestic HRM involves employees working within only one
national boundary whereas IHRM involves employees working
across national boundaries.
IHRM also includes aspects pertaining to the national or
country categories involved in international HRM activities (the
host country where a subsidiary may be located, the parent
country where the firm is headquartered, and
‘other’ countries that may be the source of labor, finance, and
other inputs), as well as the three categories of employees of an
international firm (host country nationals, parent country
nationals, and third country nationals).
In IHRM, staff are moved across national boundaries into
various roles within the international firm’s foreign operations
(expatriates/international assignees).
In IHRM, the complexity of operating in different countries and
employing different national categories of workers is a key
variable that distinguishes domestic and international firms.

This complexity is due to six factors: more HR activities, the
need for a broader perspective, more involvement in employees’
personal lives, changes in
7
7
7
emphasis because of variances in the workforce mix of
expatriates and locals, risk exposure, and broader external
influences.
Let’s look at each one of these activities in more detail.
13
International HR Activities
· International taxation
· International relocation & orientation
· Administrative services for expatriates
· Host-government relations
· Language translation services
To operate in an international environment, a HR department
must engage in a number of activities that would not be
necessary in a domestic environment.
Expatriates are subject to international taxation, and often have
both domestic (i.e their home country) and host country tax
liabilities. Therefore, tax equalisation policies must be designed
to ensure that there is no tax incentive or disincentive
associated with any particular international assignment.
International relocation and orientation may involve activities,
such as, arranging for pre-departure training, handling
immigration details, providing housing, medical care, shopping,
finalising compensation details.
Providing administrative services may be a time consuming and
complex activity because policies and procedures are not always
clear cut and may conflict with local conditions.
Host government relations ma6 be particularly important in
developing countries where work permits and other important

certificates are often easily obtained when a personal
14
relationship exists between the relevant government offi cials
and multinational managers.
Provision of language translation services for internal and
external correspondence is an additional international activity
for the HR department.
14
Need for a Broader Perspective
· Designing and administering programs for more than one
national group of employees • ‘Contemporary Global Mobility’
includes:
➢Expatriates (Long term assignments)
➢Short-term Assignees
➢FIBT
➢Fly-In-Fly-Out
· Employees can be:
➢Host Country Nationals (HCNs)
➢Parent Country Nationals (PCNs) ➢Third Country Nationals
(TCNs)
Because HR managers working in an international environment
face the problem of designing and administering programs for
more than one national group of employees, they need to take a
broader view of issues.
These are the three categories of employees in an international
firm:
PCN – parent country national HCN – host country national
TCN – third country national
For example, the US multinational IBM employs British citizens
in its British operations (HCNs), often sends US citizens
(PCNs) to Asia-Pacific countries on assignment and may send
some of its Singaporean employees on assignments to its
Chinese operations (as TCNs). The nationality of the employee
is a major factor in determining the person’s ‘category', which
in turn is frequently a major driver of the employee’s
employment contract and compensation.

Using global virtual teams
Advances in telecommunications make it far easier today to
carry out international
15
projects and operations using global virtual teams. Global
virtual teams are groups of geographically dispersed and
generally same-level coworkers who meet and interact using
information technologies to accomplish an organisational task.
For example, two multinational pharmaceutical companies used
a multinational team with members from four continents to
address detailed postmerger operational integration problems.
Collaborative software, such as Zoom and Microsoft Teams,
enable teams to hold live project reviews and discussions, share
documents and exhibits. The main challenges virtual teams face
are people related. Challenges include building trust, cohesion,
team identity and overcoming isolation among team members.
Similarly, if most team members reside in one country, the
others assume that the real power also lays in that country. Here
the solution is to stress that the team has a unified goal and a
common purpose (Dessler, 2020).
More Involvement in
Employees’ Personal Lives
· Selection, training and effective management of PCN, HCN
and TCN
· Housing
· Health care
· Compensation package
· Schooling & family members
· Annual home visits
More involvement in employees’ personal lives is necessary to
select, train, and effectively manage both PCN and TCN

employees. The HR department or HR professional needs to
ensure that the expatriate employee understands housing
arrangements, health care, and all aspects of the compensation
package provided for the assignment such as cost-of-living
allowances, premiums, and taxes.
In the international setting, the HR department must be much
more involved in order to provide the level of support required.
Consequently, it will need to know more about the employee’s
personal life. For example, some national governments require
the presentation of a marriage certificate before granting a visa
for an accompanying spouse. Thus, marital status could become
an aspect of the selection process, regardless of the best
intentions of the MNE to avoid using a potentially
discriminatory selection criterion.
Changes
in
Emphasis
As
the
foreign
operation matures,
HR activities
change
.
Common stages of MNC development typically progress from
contract
to
ownership
As foreign operations mature, the emphasis put on various HR
activities change. For example, as the need for PCNs and TCNs
declines and more trained locals become available, resources
previously allocated to areas such as expatriate taxation,
relocation, and orientation are transferred to activities such as
local staff selection, training, and management development.

More Risk Exposure
· Expatriate failure
· Under-performance while on assignment
· Political risk and terrorism
· Emergency evacuation procedures
Frequently the human and financial consequences of failure in
the international arena are more sever than in domestic
business. For example, expatriate failure and underperformance
while on international assignment is a potentially high cost
problem for MNEs. The direct costs of failure to the parent firm
may be as high as three times the domestic salary plus
relocation expenses. Indirect costs such as loss of foreign
market share and damage to key host-country relationships may
also be considerable.
Most major MNEs must now consider political risk and
terrorism when planning international meetings and
assignments.
Emergency Evacuation Procedures
· Pre crisis
· Planning
· Screening & Training
· Housing
· During the crisis
· Decision making, managing processes and logistics
· Initiation of the CMT (Crisis Management Team) ➢
Communication!
· Post crisis
· Individual support
· Organisational learning
Source: Human resource and expatriate evacuation: a conceptual
model (Fee, McGrath-Chamo & Liu, 2013)
These are some of the activities that HR department needs to
take into consideration for emergencies.
Security firm International SOS provides its clients with online
and smart phone tools. These let client quickly notify

employees travelling abroad of potential problems and what to
do about them.
Many employers use intelligence services for monitoring
potential terrorist threats abroad. Hiring crisis teams and paying
ransoms can be expensive for all but the largest firms, so many
employers buy kidnapping and ransom insurance (Dessler,
2020).
Broader External Influences
· Government • Local ways of
· State of economy doing business
· Local affirmative • Codes of conduct action rules •
Housing
· Labor relations • Education
The major external factors that influence IHRM are the type of
government, the state of the economy and the generally
accepted practices of doing business in each of the various host
countries in which MNEs operate. A host government can, for
example, dictate hiring procedures, as has been the case until
recently in Malaysia.
In developed countries, labour is more expensive and better
organised than in lessdeveloped countries and national and/or
state governments require compliance with legal requirements
on issues such as labour relations, taxation, and health and
safety.
Differences in economic systems translate into differences in
intercountry practices. In market economies (such as United
States), governments play a relatively restrained role in
deciding what will be produced and sold at what prices. In
planned economies (such as North Korea), the government
decides and plans what to produce and sell at what price. In
mixed economies (such as China), many companies are still
state owned, while others make decisions based on demand.
Differences in economic systems tend to translate into
differences in human resource management policies. For
instance, dismissing employees in China or Europe is more

difficult than in the United States.
The Variables that Moderate the Differences
between HRM & IHRM
Textbook Figure 1.3
The textbook names five variables that act as “moderators”; i.e,
that diminish or accentuate the differences between domestic
and international HRM: complexity, the cultural environment,
industry type, extent of reliance of the multinational on its
home country domestic market, and the attitudes of senior
management to international operations.
Many firms from advanced economies, with limited experience
in international business, underestimate the complexities
involved in successful international operations—particularly in
emerging economies. There is considerable evidence to suggest
that business failures in the international arena are often linked
to the poor management of human resources.
Role of the HR department:
an explicit recognition by the parent organization that its own
peculiar ways of managing human resources reflect some
assumptions and values of its home culture; an explicit
recognition by the parent organization that its peculiar ways are
neither
15
15
15
universally better nor worse than others, but are different and
likely to exhibit strengths and weaknesses, particularly abroad;
an explicit recognition by the parent organization that its
foreign subsidiaries may have other preferred ways of managing
people that are neither intrinsically better nor worse, but could
possibly be more effective locally;

a willingness from headquarters to not only acknowledge
cultural differences, but also to take active steps in order to
make them discussable and therefore usable; and building a
genuine belief by all parties involved that more creative and
effective ways of managing people could be developed as a
result of cross-cultural learning.
→ Changes that are required to internationalize the HR function
have more to do with mindsets than with behaviors.
Pages 8-14 of your textbook consider these five aspects in
detail.
The Cultural Environment
What is culture?
A shared and sustained set of understandings, values, and
beliefs that
influence behaviour
An important characteristic of culture is that it is so subtle a
process that one is not always conscious of its relationship to
values, attitudes, and behaviours. One usually has to be
confronted with a different culture in order to fully appreciate
this effect. The new environment requires many adjustments in
a relatively short period of time, challenging people’s frames of
reference to such an extent that their sense of self, especially in
terms of nationality, comes into question. People, in effect,
experience a shock reaction to new cultural experiences that
cause psychological orientation because they misunderstand or
do not recognise important cues. Culture shock can lead to
negative feelings about the host country and its people and a
longing to return home.
Cultural awareness is essential for the HR manager at corporate
headquarters as well as in the host location. Coping with
cultural differences, and recognizing how and when these
differences are relevant, is a constant challenge for
international firms.
The Industry Continuum

Internationals
Multi-
Domestic
Transnational
Global
Limited overseas presence and export driven.
MNCs
compete in different national markets; decentralized to respond
to national differences
Products and processes adapted locally; Integrated operations
with a flow of products, people and information across
subsidiaries as well as vertically
Companies seek economies of scale to realise cost advantages;
control is centralized to transfer expertise and knowledge
where needed
Barlett & Ghoshal
(1998) Typology of MNCs
At one end of the continuum of international competition is the
multidomestic industry, one in which competition in each
country is essentially independent of competition on other
countries. E.g., retailing, distribution, and insurance. At the
other end of the continuum is the global industry, one in which
a firm’s competitive position in one country is significantly
influenced by its position in other countries. E.g., commercial
aircraft, semiconductors, and copies.
The role of the HRM function in multidomestic and global
industries can be analysed using Porter’s value chain model. In
Porter’s model, HRM is seen as one of four support activities
for the five primary activities of the firm. Since HR are
involved in each of the primary and support activities, the HRM

function is seen as cutting across the entire value chain of a
firm. For instance, if the firm is a multidomestic industry, the
role of the HR department will most likely be more domestic in
structure and orientation.
The Global Complexities
· Wider and potentially more strategic remit
· Due diligence in M&As/ FDI decisions
· Co-ordinating CSR initiatives and compliance
· International management development
· Convergence v Divergence
· Global ‘War-for-Talent’
· Need to recruit, select, develop, retain workforce talent to
achieve global competitiveness’
Many firms from advanced economies, with limited experience
in international business, underestimate the complexities
involved in successful international operations—particularly in
emerging economies. There is considerable evidence to suggest
that business failures in the international arena are often linked
to the poor management of human resources.
The Attitudes of Senior Management
HR
has
to
help senior
managers
in
developing
this
mindset
It is likely that, if senior management does not have a strong
international orientation, the importance of international
operations may be underemphasised (or possibly even ignored)
in terms of corporate goals and objectives. In such situations,

managers may tend to focus on domestic issues and minimise
differences between international and domestic environments.
Reliance on the Home
-
Country
Domestic Market
Size is not the only key variable when looking at a
multinational; the extent of reliance of the multinational on its
home-country domestic market may also be very important. In
fact, for many firms, a small home market is one of the key
drivers for seeking new international markets.
A very large domestic market influences all aspects of how a
multinational organises its activities. For example, it will be
more likely to use an international division as the way it
organises its international activities and, even if it uses a global
product structure, the importance of the domestic market may be
pervasive.
· Parent organization explicitly recognizes that its HRM reflects
some assumptions and values of own home culture.
· Parent organization explicitly recognizes that its own peculiar
ways are neither universally better nor worse than others –
just different and likely to exhibit strengths and weaknesses,
particularly abroad.
Laurent’s steps • Parent organization explicitly
recognizes that its
foreign subsidiaries may prefer other ways to manage
for true IHRM: people – ways that are neither intrinsically
better nor
worse, but possibly more effective locally.
· Headquarters is willing to acknowledge cultural differences
and take steps to make them discussable & therefore usable.
· All parties build belief that cross-cultural learning invites
more creative and effective ways of managing people.
Laurent’s 5 steps for true IHRM?

MNE recognizes its HRM reflects assumptions & values of its
own home culture. MNE recognizes its own ways are not
inherently better or worse than others’ ways abroad.
MNE recognizes its foreign subsidiaries may prefer other ways
to manage people. Headquarters is willing to discuss cultural
differences and take steps to make them more usable.
All parties believe that cross-cultural learning invites more
creative and effective HRM.
See p. 12.
Applying
a
strategic
view
of
IHRM
A
framework
of
strategic
HRM in
MNEs, Figure 1.4
S
ource:
De
Cieri
and
Dowling
, 2012
This is a theoretical framework, designed by De Cieri and
Dowling, that has been derived from a strategic approach using
a multiple methodological approach. Their framework assumes
that MNEs operate in the context of worldwide conditions,
including the influences of industry (global or multidomestic)
and regional, national, and local markets that include

geopolitical, legal, socio-cultural, and economic characteristics.
They propose that external factors have direct influence on both
internal/organisation factors and strategic human resource
management strategy and practices, and that external factors
have a direct influence on MNE performance.
Summary
Definition
of HRM and IHRM
Complexity
involved in operating in different
countries and employing different national
categories of employees is a key variable
differentiating domestic and IHRM
Other
variables that moderate differences
between domestic and IHRM
:
overall global
complexity; the cultural environment; the
industries; the extent of reliance of the
multinational on its home
-
country domestic
market; and the attitudes of senior management
A
model of SHRM
in multinational enterprises
Read Chapter 1 and the ‘essential resource’ on Canvas.
23
23
23

International Human Resource Management: BUSMGT 761
Week 2: 28
th
June 2021
The cultural context
of IHRM
Week 1 observed that international HRM differs from
nationally-oriented HRM predominantly in the complexities that
result from employees of various national origins working in
different countries. People who work in internationally
operating companies, as well as customers, suppliers, or
representatives of government institutions in the host country,
often face very different cultural and institutional environments
due to differing socialization experiences.
Week
1
recap
Definition
of HRM and IHRM
Complexity
involved in operating in different
countries and employing different national
categories of employees is a key variable
differentiating domestic and IHRM
Other
variables that moderate differences
between domestic and IHRM
:
overall global
complexity; the cultural environment; the
industries; the extent of reliance of the
multinational on its home
-
country domestic

market; and the attitudes of senior management
A
model of SHRM
in multinational enterprises
This week focuses the role of culture in IHRM.
What do you understand from this picture?
Countries differ widely in their culture – in other words, in the
basic values and assumptions. Peoples’ values and assumptions
tend to drive what they do, and so cultural differences manifest
themselves in how people in different countries think and act.
For example, in France, employees don’t think it is necessary to
mention what’s right because they know what they have done
right. Whereas there is a tendency for U.S managers to
sugercoat what’s wrong. In China, heads of companies are
inclined to see employees as members of their family, but in
turn demand much of them.
What is Culture?
‘Culture’ refers to a shared and sustained set of
understandings, values, and beliefs that influence behaviour…
the characteristic way of
behaving and believing that a group of people have
developed over time and
share
Workers around the world tend to have differing attitudes
toward authority. With respect to authority, countries range
from egalitarian to hierarchical. For example, in the more
egalitarian United States and Canada, managers emphasise
worker empowerment and soliciting input, while hierarchical
countries like Saudi Arabia and Russia authority clearly resides
in top managers. Similarly, differences in how they make
decisions characterise cultures around the world. Thus, in the
United States, top-down decision-making tends to be the rule,
while in Sweden and Japan the emphasis is on consensus
decisions. Such differences can cause problems for

multinational employers. For example, employees in
hierarchical countries like
Indonesia might react negatively to a manager from the U.S.
soliciting their opinions.
1
1
1
Similarly, employees in egalitarian countries like Sweden might
react negatively to a boss from abroad who emphasises their
bossiness.
(Dessler, 2020)
Kluckhohn & Kroeber’s
concept of culture
•
The essential core of culture consists of traditional ideas
and their attached values
•
Culture consists of patterned ways of:
•
Thinking
•
Feeling
•
Reacting
"By culture we mean all those historically created designs for
living, explicit and implicit, rational, irrational, and
nonrational, which exist at any given time as potential guides
for the behaviour of men. “
Kluckhohn, C., & Kelly, W.H. (1945). The concept of culture.
In R. Linton (Ed.). The Science of Man in the World Culture.
New York. (pp. 78-105).

Schein’s concept of culture
A Culture has 3 levels:
•
Artefacts
–
visible
•
Values
–
intermediate level of
consciousness
•
Underlying assumptions
–
invisible,
unconscious
In the 1980s, psychologist Edgar Schein of the Sloan School of
Management developed a model for understanding and
analysing organizational culture. Schein divided an
organization’s culture into three distinct levels: artifacts,
values, and assumptions.
Artifacts are the overt and obvious elements of an organization.
They’re typically the things even an outsider can see, such as
furniture and office layout, dress norms, inside jokes, and
mantras. Yes, football and free food are also artifacts. Artifacts
can be easy to observe but sometimes difficult to understand,
especially if your analysis of a culture never goes any deeper.
Espoused values are the company’s declared set of values and
norms. Values affect how members interact and represent the
organization. Most often, values are reinforced in public
declarations, like the aptly named list of core values, but also in
the common phrases and norms individuals repeat often. Herb
Kelleher was famous for responding to a variety of proposals
from Southwest colleagues with the phrase “low-cost airline,”
reaffirming the espoused value of affordability.

Shared basic assumptions are the bedrock of organizational
culture. They are the
5
5
5
beliefs and behaviors so deeply embedded that they can
sometimes go unnoticed. But basic assumptions are the essence
of culture. Zappos call center employees share a strong belief
that providing outstanding service will result in loyal
customers, so much so that employees send potential customers
to other retailers if Zappos doesn’t have the item in stock. Basic
assumptions manifest themselves in a variety of ways.
Sometimes they’re reflected in the espoused values and in
artifacts, sometimes not. But when basic organizational
assumptions don’t align with espoused values, trouble arises.
Enron produced a 64-page manual outlining the company’s
mission and espousing its core values but judging by their very
“creative” accounting practices, it’s questionable if the
executives at the top had ever read it.
https://hbr.org/2014/12/how-to-tell-if-your-company-has-a-
creative-culture
Schein’s Iceberg
Artefacts
Values
Assumptions
Visible
Invisible
Basic assumptions are the hardest to see, but it’s the basic
assumptions of an organization’s culture that produce a real
affect on the creativity of its members. Creative organizations
have basic assumptions about creativity being a process,rather
than a eureka moment, or that not all conflict needs to be

resolved because sometimes it can yield more innovative
thinking. They share beliefs that creativity thrives under
constraints, or that the best work is done using
constantlyevolving teams. Sharing ideas openly, allowing for
limited risk taking, and celebrating failures as learning
opportunities are all basic beliefs of creative organizations. You
may recognize a creative culture when you see it, but you won’t
truly understand it until you dig below the surface.
https://hbr.org/2014/12/how-to-tell-if-your-company-has-a-
creative-culture
Schein’s 6 underlying
assumptions
•
Nature of reality & truth
•
Time dimension
•
Effect of spatial proximity and distance
•
Nature of being human
•
Type of human activity
•
Nature of human relationships
1. Nature of reality and truth: What is real and what is not? Do
members of a culture assume more of an experimental position,
where decisions about true and false depend upon experiment,
or do they follow more traditional convictions?
2. The time dimension: How is the time dimension defined and
calculated? How important is time? Do members of a culture
live more in relation to the past or to the future? Are they
oriented more to the long-term or the short-term?
3. The effect of spatial proximity and distance: How is space
attributed to members of a society? What objects and locations

are private and what are public? What role does spatial distance
play in evaluating relationships e.g., in regard to level of
intimacy?
4. The nature of being human: What does it mean to be human?
Is human nature marked more by good or bad intentions? Can
people change and develop, even as adults?
5. The type of human activity: How is the relationship to the
environment evaluated? Is the environment considered more
compelling or overpowering? Are
7
7
7
the members of a society more passive in their fate or do they
try to actively change it?
6. The nature of human relationships: What ideas about criteria
of social order dominate in a society (e.g., age, origins,
success)? What characterises relationships between people? Is
team success or individual success important?
Introduction to cross-cultural management
· Research began in the early 1960s
· Increasing international complexity of the global economy
· Problems experienced by managers
· Conflicts and low performance
· Insight that management knowledge is not easily transferable
Goals of cross-cultural management studies
working behavior in various cultures

Describe and compare
interaction between employees, customers, suppliers or
businesses in different countries and cultures
Explain and improve
The common features of these studies are:
· Basic assumption that there are differences
between management practices in various countries and;
· That the respective environment is of particular significance in
explaining these differences;
· This perspective rejects the universalistic, culture-free
approach to management
· Critique focused on the absence of a common theoretical
foundation and methodological weakness
Although these studies have come up with different dimensions,
there are many similarities too.
Hofstede’s study
· Initial study conducted at IBM between 1967 and 1973
· Across 74 countries / 116,000 participants
· Culture is the “collective programming of the mind that
distinguishes one category of people from another”
· Six dimensions in total:
· Four cultural dimensions produced in the initial study
· The last two dimensions (long-term vs short-term orientation
and indulgence v/s restraint) were identified in subsequent
studies
Geert Hofstede Interview 2011
Geert Hofstede, assisted by others, came up with six basic
issues that society needs to come to term with in order to
organize itself. These are called dimensions of culture. Each of
them has been expressed on a scale that runs roughly from 0 to

100.
Hofstede’s study: Power Distance
· People in societies exhibiting a large degree of Power
Distance accept a hierarchical order in which everybody has a
place, and which needs no further justification.
Philippines / India / France
· In societies with low Power Distance, people strive to equalise
the distribution of power and demand justification for
inequalities of power.
USA / Sweden / NZ
Power distance represents the degree to which less-powerful
people accept the unequal distribution of power in society. He
concluded that acceptance of such inequality was higher in
some countries (such as Mexico) than in others (such as
Sweden). In turn, such differences manifest themselves in
different behaviours. This dimension is thought to date from the
advent of agriculture, and with it, of largescale societies. Until
that time, a person would know their group members and
leaders personally. This is not possible where tens of thousands
and more have to coordinate their lives. Without acceptance of
leadership by powerful entities, none of today's societies could
run.
https://geerthofstede.com/culture
-
geert
-
hofstede
-
gert
-
jan
-
hofstede/6d
-

model
-
of
-
national
-
culture/
Light shade denotes less power distance and dark shade denotes
more power distance.
Hofstede’s study: Individualism v Collectivism
•
Individualism can be defined as a preference for a loosely-knit
social framework in which individuals are expected to take care
of only themselves and their immediate families.
USA / United Kingdom / Australia
•
Collectivism represents a preference for a tightly-knit
framework in society in which individuals can expect their
relatives or members of a particular in group to look after them
in exchange for unquestioning loyalty.
Japan / China / Germany
Individualism is the extent to which people feel independent, as
opposed to being interdependent as members of larger wholes.
Individualism does not mean egoism. It means that individual
choices and decisions are expected. Collectivism does not mean
closeness. It means that one "knows one's place" in life, which
is determined socially. With a metaphor from physics, people in
an individualistic society are more like atoms flying around in a
gas while those in collectivist societies are more like atoms
fixed in a crystal.
-
geert

-
hofstede
-
gert
-
jan
-
hofstede/6d
-
model
-
of
-
national
-
culture/
Light shade denotes collectivist cultures and dark shade denotes
individualist cultures.
Hofstede’s study: Masculinity v Femininity
· Masculine cultures have stronger gender roles and femininity,
stands for a preference for cooperation, modesty, caring for the
weak and quality of life. Society at large is more consensus-
oriented, value assertiveness in work and are more materialistic
Japan/ Austria/ Germany
· Femininity, stands for a preference for cooperation, modesty,
caring for the weak and quality of life.
Society at large is more consensus-oriented
Sweden/ Denmark
Masculinity is the extent to which the use of force is endorsed
socially. In a masculine society, men are supposed to be tough.
Men are supposed to be from Mars, women from Venus.
Winning is important for both genders. Quantity is important
and big is beautiful. In a feminine society, the genders are
emotionally closer. Competing is not so openly endorsed, and

there is sympathy for the underdog.
This is NOT about individuals, but about expected emotional
gender roles. Masculine societies are much more openly
gendered than feminine societies.
-
geert
-
hofstede
-
gert
-
jan
-
hofstede/6d
-
model
-
of
-
national
-
culture/
Light shade denotes feminine cultures and dark shade denotes
masculine cultures.
Hofstede’s study: Uncertainty Avoidance
· Countries exhibiting strong UA maintain rigid codes of belief
and behaviour and are intolerant of unorthodox behaviour and
ideas. They favour bureaucracy, hierarchy, organisational and
career stability
France/ Spain
· Weak UAI societies maintain a more relaxed attitude in which
practice counts more than principles. Open to diverse views,
delegation and

more flexible organisational structures
Sweden/ Norway/ USA
Uncertainty avoidance deals with a society’s tolerance for
uncertainty and ambiguity. Uncertainty avoidance has nothing
to do with risk avoidance, nor with following rules. It has to do
with anxiety and distrust in the face of the unknown, and
conversely, with a wish to have fixed habits and rituals, and to
know the truth.
-
geert
-
hofstede
-
gert
-
jan
-
hofstede/6d
-
model
-
of
-
national
-
culture/
Light shade denotes uncertainty tolerant cultures and dark shade
denotes uncertainty avoiding cultures.
Hofstede’s study: Long-term Orientation
· Societies who score low on this dimension, for example,
prefer to maintain time-honoured traditions and norms while
viewing societal change with suspicion. US/UK
· Those with a culture which scores high take a more pragmatic

approach: they encourage thrift, persistence and an emphasis on
long-term goals as a way to prepare for the future.
China / South Korea
Confucian Values - Managing in the Chinese Culture
Long-term orientation deals with change.
In a long-time-oriented culture, the basic notion about the world
is that it is in flux and preparing for the future is always
needed. In a short-time-oriented culture, the world is essentially
as it was created, so that the past provides a moral compass, and
adhering to it is morally good. As you can imagine, this
dimension predicts life philosophies, religiosity, and
educational achievement.
-
geert
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hofstede
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gert
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jan
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hofstede/6d
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model
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of
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national
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culture/

Low ranges denote long-term orientation cultures and high
ranges denote short-term orientation cultures.
Hofstede’s study: Long-term Orientation
Long-term cultures characterized by: Short-term cultures
characterized by:
· Great endurance, persistence in ❑ Personal candor & stability
pursuing goals
· Position of ranking based on status ❑ Avoiding loss of face
· Adaptation of traditions to ❑ Respect of social without
consideration & status of costs obligations modern conditions
· Respect of social & status obligations ❑ Low activity savings
rates & low investment within limits
· High savings rates & high ❑ Expectations of quick profit
investment activity ❑ Respect for traditions
· Readiness to subordinate oneself ❑ Greetings, presents &
courtesies to a purpose based on reciprocity
· The feeling of shame
When Coca-Cola entered the Chinese market in 1927, they
sought a spelling for the brand whose characters sounded
phonetically similar to ‘’Coca Cola’’. The characters chosen
however, ended up reading “Bite the Wax Tadpole” in
Mandarin. Learning of the blunder, the soda-giants managed to
quickly choose a new set of characters, which read as
“Happiness in the Mouth”- a much more fitting depiction of the
popular drink.
https://www.edology.com/blog/marketing/cross-cultural-
marketing-blunders/
Rivals Pepsi followed in similar vein. They launched their
brand into the Chinese market wielding the slogan, "Pepsi
brings you back to life." A clumsy, literal translation led to the

phrase being translated to “Pepsi brings your ancestors back
from the grave.” A bold claim indeed for a beverage company.
https://www.edology.com/blog/marketing/cross-cultural-
marketing-blunders/
Hofstede’s study: Indulgence v Restraint
· Societies with higher indulgence scores facilitate the pursuit
of pleasurable activities and experiences manifesting in a
perception of personal control Venezuela
· A restrained society sees the value in curbing ones' desires
where leisure is not given the same importance. Restraint
requires one to alignbehaviour with societal norms.
Russia
Indulgence is about the good things in life.
In an indulgent culture it is good to be free. Doing what your
impulses want you to do, is good. Friends are important and life
makes sense. In a restrained culture, the feeling is that life is
hard, and duty, not freedom, is the normal state of being.
-
geert
-
hofstede
-
gert
-
jan
-
hofstede/6d
-
model
-
of
-

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