W6: Hill & Hult (2022). Chapter 19

Question 1

Human resource management (HRM)

Answer 1

Refers to the activities an organisation carries out to use its human resources effectively. It includes determining the firm’s human resource strategy, staffing, performance evaluation, management development, compensation, and labour relations. It has an important strategic component, as it can help reduce the cost of value creation and add value by better serving customers. They also must deal with expatriate managers and e.g. determine when and why to use expatriates

Question 2

Expatriate managers

Answer 2

People who are working abroad in one of the firm’s subsidiaries, and determine

Question 3

Staffing policy

Answer 3

Concerned with the selection of employees for particular jobs. This involves selecting the right skills for the job, but also for the development and promotion of the corporate culture

Question 4

Corporate culture

Answer 4

The organisation’s norms and value systems. A strong corporate culture can help the firm implement its strategy

Question 5

Ethnocentric staffing policy

Answer 5

One in which all key management positions are filled by parent-country nationals

Question 6

Polycentric staffing policy

Answer 6

Requires host-country nationals to be recruited to manage subsidiaries, while parent-country nationals occupy key positions at corporate headquarters

Question 7

Geocentric staffing policy

Answer 7

Seeks the best people for key jobs throughout the organisation, regardless of nationality

Question 8

Inpatriates

Answer 8

A subset of expatriates. They are citizens of a foreign country working in the home country of their multinational employer

Question 9

Expatriates

Answer 9

Citizens of one country working in another country

Question 10

Expatriate failure

Answer 10

The premature return of expatriate managers to their home country. It represents a failure of the firm’s selection policies. The costs are high, somewhere between $40,000 and a million

Question 11

Self-orientation

Answer 11

This strenghtens the expatriate’s self-esteem, self-confidence, and mental well-being

Question 12

Others-orientation

Answer 12

The ability to interact effectively with host-country nationals. Relationship development and willingness to communicate are particularly important

Question 13

Relationship development

Answer 13

The ability to develop long-lasting relationships

Question 14

Willingness to communicate

Answer 14

Willingness to use the host-country language

Question 15

Perceptual ability

Answer 15

The ability to understand why people of other countries behave the way they do. The ability to empathise. Expatriate managers who lack this tend to treat foreign nationals as if they were home-country nationals, and thus they may experience significant management problems and considerable frustration

Question 16

Cultural toughness

Answer 16

The relationship between the country of assignment and how well an expatriate adjusts to a particular posting. E.g., many Americans find postings in non-Western cultures to be much tougher, probably for reasons such as poor health care and housing standards, inhospitable climate, lack of Western entertainment, and language difficulties

Question 17

Global mindset

Answer 17

Research suggests that it is fundamental to a global manager. Such managers can deal with high levels of complexity and ambiguity and are open to the world. This mindset can come from a bicultural family, living in foreign countries, and learning foreign languages. These, together with comparisons of cultures and domestic performance, should be considered when selecting a manager for a foreign position. However, employees are still selected on the basis of technical expertise, not cross-cultural fluency

Question 18

Training

Answer 18

Intended to develop the manager’s skills over their career with the firm

Question 19

Cultural training

Answer 19

Seeks to foster an appreciation for the host country’s culture. It will help the manager empathise, which will enhance effectiveness in dealing with host-country nationals. It has been suggested that expatriates should receive training in the history, politics, economy, religion, and social and business practices of the host country

Question 20

Familiarisation trip

Answer 20

Early visit that eases the culture shock

Question 21

Practical training

Answer 21

Aimed at helping the manager and family ease themselves into day-to-day life in the host country. The sooner a routine is established, the better the prospects

Question 22

Repatriation

Answer 22

Training and development of expatriate managers for reentry into their home-country organisation is also important. Often, an organisation does not know what they have done in the past years, does not know how to use their new knowledge, and does not really care. The firm could also not use the expatriate’s acquired skills and capabilities. The key solution is good human resource planning by developing good programs for reintegrating expatriates back into work life within their home country, preparing them for changes in their physical and professional landscape, and utilising the knowledge they acquire abroad

Question 23

Management development programs

Answer 23

Designed to increase the overall skill levels of managers through a mix of ongoing management education and rotations of managers through a number of jobs within the firm to give them varied experiences. International businesses are increasingly using management development as a strategic tool, particularly firms pursuing a transnational strategy, which need a strong unifying corporate culture and informal management networks. They need to detect pressures for local responsiveness

Question 24

Performance appraisal systems

Answer 24

Used to evaluate the performance of managers against some criteria that the firm judges to be important for the implementation of strategy and attainment of a competitive advantage

Question 25

Unintentional bias

Answer 25

Makes it difficult to evaluate the performance of expatriate managers objectively

Question 26

Balance sheet approach

Answer 26

The most common approach for expatriate pay. It equalises purchasing power across countries so employees can enjoy the same living standards. It provides financial incentives to offset qualitative differences between assignment locations. The components of the typical expatriate compensation package are a base salary, a foreign service premium, allowances of various types, taxation, and benefits

Question 26

Foreign service premium

Answer 26

An extra pay that the expatriate receives for working outside their country of origin

Question 27

Allowances

Answer 27

Hardship when the host country is fundamentally different, housing, cost of living and education

Question 28

Taxation

Answer 28

Preventing double taxation

Question 29

Benefits

Answer 29

E.g. medical and pension

Question 30

Diverse workforce

Answer 30

Can be a source of competitive advantage and is linked to superior financial performance

Question 31

Labour unions

Answer 31

Strive for better pay, greater job security, and better working conditions for their members through collective bargaining with management. They derive their bargaining power from their ability to threaten to disrupt production (through strikes/protests)

Question 32

Cultural myopia

Answer 32

The firm's failure to understand host-country cultural differences that require different approaches to marketing and management

Question 33

Selection

Answer 33

The first step in matching managers with a job

Question 34

Informal management network

Answer 34

Can be built by brining managers together in one location for extended periods and rotating them through different jobs in several countries. It can be used as a conduit for exchanging valuable performance-enhancing knowledge

Question 35

National differences in compensation

Answer 35

Should the firm pay executives in different countries according to the prevailing standards in each country, or should it equalise pay on a global basis? This question does not arise in firms pursuing ethnocentric or polycentric staffing policies. However, it does arise for a geocentric staffing polic that is consistent with transnational strategy. Should all managers abroad be paid the same? For the U.S., e.g. this could be expensive. However, not equalising pay could cause resentment. Thus, a global compensation system is on the rise

Question 36

HRM function of an international business

Answer 36

Typically responsible for international labour relations. The key issue is the degree to which organised labour can limit the choices of an international business (e.g. through labour unions). These typically try to get better pay, greater job security, and better working conditions. The firm can counter possible strikes by threatening to move production to another country. One task of the HRM function is also to foster harmony and minimise conflict between the firm and organised labour

Question 37

International trade secretariats (ITSs)

Answer 37

Began to be established by organised labour in the 1960s to provide worldwide links for national unions in particular industries, with a long-term goal of being able to bargain transnationally with multinational firms. However, they were not successful

Question 38

Trade unions

Answer 38

Developed independently in each country. As a result, the structure and ideology of unions tend to vary significantly from country to country, as does the nature of collective bargaining. In countries such as France and itally, left-wing socialists control unions, while in countries like Germany and the Netherlands, they are far more politically moderate

Question 39

Organised labour

Answer 39

Has had limited success in its efforts to get national and international bodies to regulate multinations. However, these guidelines are not as far-reaching as many unions would like and do not provide any enforcement mechanisms