Ch 9 Staffing to Control Flashcards
why hire from country where IJV is located
NEED skills/economic price
useful in BRIDGING cultures and as informal mediators
why not just staff from one company pool? (pros? cons?)
Pros
- Avoid cultural conflict
- Great if one partner cannot spare staff from its routine operations.
Cons
- Eliminate learning by cooperation
- Think about other ways to control
- Requires considerable trust.
Imbalances in skill levels can often be corrected by transferring skills technologies. This arrangement works well, so long as all parties (the partners, the IJV management, and the staff concerned)
–adequately PLAN how the technology transfer and training activities should be IMPLEMENTED;
–are SATISFIED with the implementation process;
–are MOTIVATED to participate.
motivating staff to work in IJV may be especially difficult in _____ cultures
collectivist
Staff transferred from a parent are motivated when
–are given a free CHOICE
–recognize that working for the IJV is in their career INTEREST;
–are adequately COMPENSATED . Resentment over inequalities in pay is damaging. Two possible solutions are that expatriates are paid on a separate basis, which avoids putting them on the IJV payroll; or having the foreign partner pay their benefits and bonuses;
–are TRAINED. But training can be a sensitive issue. Staff from the weaker parent are NOT motivated if trainee status is perceived to diminish their status, and if they have no professional reasons for making the commitment.
with bureaucratic control, HQ tries to control
behavior (monitors activities)
output (developing reporting and monitoring systems)
with successful bureaucratic control, subsidiary grows into efficient operating unit and can create its own culture, but the weaknesses…
weak LOYALTIES to HQ (esp in collectivist cultures)
HQ may be UNAWARE of organizational DEVELOPMENTS that may threaten company interests
with cultural control, HQ aims to
develop a culture of LOYALTY to HQ and managers so subsidiary culture REPLICATES HQ eventually
strengths: powerful COMMITMENT to HQ
weaknesses: high COSTS, potential psychological CONSTRAINT in the event of CONFLICT between HQ and society interests
techniques for cultural control
- staffing with large numbers of EXPATRIATES who act as role-models
- employee SOCIALIZATION programs
- frequent VISITS between the subsidiary and HQ
- Company SEMINARS; visits to HQ
- social EVENTS
advantages of expatriate staffing
greater CONTROL, greater spread of CULTUREe, HQ staff gains EXPERIENCE abroad, PROTECTS technology, greater INFLUENCE in critical times, CLOSER links made with OTHER subsidiaries
disadvantages of expatriate staffing
–local staff get FEWER opportunities to manage;
–POLITICAL RISK is increased when the expatriate does not understand the local political situation;
–the expatriate TAKES TIME to develop local connections;
–the expatriate has less SENSITIVITY to local market demands;
–the expatriate may not know the local LANGUAGE;
–the expatriate has less experience of MANAGING LOCAL staff;
–TRAINING for the expatriate assignment has to be provided;
–expatriation COSTS are incurred;
–the expatriate may COST MORE to reward;
–DISPARITIES in rewards between the expatriate and local staff create ill-feeling among local staff.
advantages of a local manager
- the multinational is “internationalized”
- the subsidiary is EMPOWERED
- the local manager is DEVELOPED
- the local manager is better CONNECTED in local markets
- POLITICAL RISK is reduced
- the local manager can BETTER MANAGE local staff
NO NEED/AVOID…
- there is no need for expatriate TRAINING (none)
- expatriation COSTS are avoided
- the local manager COSTS LESS to reward
- ill-feeling arising from DISPARITIES in rewards are avoided.
factors that determine if local or expatriate manager is better
●(a) STRUCTURE OF THE MNC. ●(b) INDUSTRY. ●(c) STRATEGY. ●(d) TECHNOLOGY. ●(e) AGE AND CONDITION. ●(f) HEADQUARTERS AVAILABILITY ●(g) LOCAL AVAILABILITY. ●(h) FEAR OF LOSING LOCAL MANAGERS. ●(i) QUALITY OF LOCAL STAFF. ●(j) NATIONAL CULTURE
