International Business Ch.19 Vocab/Ideas

Question 1

What is Human Resource Management?

Answer 1

Activities that utilize Human Resources Effectively:

• determining HR strategy
• staffing
• performance evals
• mgmt development
• compensation
• labor relations

Question 2

What is the Strategic Role of HRM in International Firms?

Answer 2

It helps reduce cost of value creation and adds value by better serving customer needs.
(more complex in international business)
-Must also determine when to use expatriate mgrs.

Question 3

What is a Staffing Policy?

Answer 3

Selection of employees who have the required skills for a particular job.
(can be used to base corporate culture)
3 Approaches

Question 4

3 Staffing Policy Approaches?

Answer 4

1) Ethnocentric: fill mgmt positions with parent country nationals
2) Polycentric: recruit host cntry nationals to manage subsidiaries in their cntry and hire Parent Cntry Nationals for positions in Headquarters
3) Geocentric: Seek the best regardless of nationality for key jobs

Question 5

Why Ethonocentric Staffing?

Answer 5

-Lack of qualified individuals in host cntry to fill Sr. mgmt positions
-best to maintain unified corp culture
-value created by transfer of core competencies to foreign operation by Parent Cntry nationals
-makes sense with an international strategy
BUT
-limits advancement for host cntry natn’ls
-can lead to “cultural myopia”

Question 6

Why Polycentric Staffing?

Answer 6

-makes sense for firms pursuing localization strategy
-minimizes “cultulral myopia”
-may be less expensive to implement than ethonocentric
BUT
-host cntry natn’ls get limited opp to gain exp outside their cntry and can’t progress beyond Senior Mgmt in their own subsidiaries
-gap can form between host cntry mgrs and Parent country Mgrs

Question 7

Why Geocentric Staffing?

Answer 7

-helps build strong unifying culture and informal mgmt network
-makes sense for firms pursuing global or transnational strategy
-lets the firm make best use of its HR
-builds cadre of Intnat’l Execs who feel at home working in #’s of diff cultures
BUT
-can be limited by immigration laws
-is costly to implement

Question 8

What is Expatriate Failure?

Answer 8

Firms using Etho or Geo Staffing will have expatriate mgrs.

-it is PREMATURE RETURN of an Expatriate Mgr to the home country

Question 9

Why do Expatriate Mgrs fail?

Answer 9

Main reason for US expatriate failure

• inability of spouse to adapt
• inability of mgr to adapt
• other family-related reasons
• Mgrs personal or emotional maturity
• Mgrs inability to cope with larger overseas responsibilities

Question 10

How can Firms reduce Expatriate Failure?

Answer 10

Improved Selection Procedures
Expatriate Succes based on:
1) Sef Orientation self-esteem, self-confidence, mental well being
2) Others-Orientation ability to interact effectively w/host cntry natn’ls
3) Perceptual ability- ability to understand why people behave the way they do in other countries
4) Cultural toughness-ability to adjust

Question 11

Why is a Global MIndset Important?

Answer 11

The fundamental attribute of a global mgr

• acquired in early life
• bicultural family
• living in foreign countries
• learning foreign languages as a regular part of family life

Question 12

What is Training and Mgmt development?

Answer 12

After Mgr selection,Trning and Dvlpmt pgms should be implemented.

• Trning focuses upon preparing the mgr for specific job.
• Mgmt development helps develop skills of mgr over time
• Most firms focus more on trning than on Mgmt development

Question 13

Why is Training Important for Expatriate Mgrs?

Answer 13

Can reduce expatriate failure

• cultural tning forces appreciation for host country culture
• Lang Training: an exclusive reliance on english diminishes an expatriates ability to interact with host cntry natn’ls
• Practical Training-helps the expatriate and family ease themselves into the day to day life in that countr

Question 14

What happens when expatriates return home?

Answer 14

Trning and Dvlpment should include preparing and dvlpment expatriate mgrs into their home country organization

Question 15

Why is Mgmt Development Important to firm strategy?

Answer 15

Increases overall skill of mgrs through:
-ongoing mgmt education
-rotation of jobs to give them varied experience
It can be strategic tool to build a strong unifying culture and informal mgmt network.

Question 16

How should Expatriates be evaluated?

Answer 16

Can be complex
-both host nation and home office evaluate the performance
Both are subject to unintentional bias
-home country rely on data upon evaluation
-host country biased towards their own frame of reference

Question 17

How can performance appraisal bias be reduced?

Answer 17

• More weight on an on-site mgr than off-site mgr’s appraisal
• a former expatriate should be involved in the process thatt served in the same location
• home office managers should be consulted before a formal termination eval is completed by on-site mgr.

Question 18

What are the key issues in compensating Expatriates?

Answer 18

Two key issues:

1) how to adjust compensation to reflect differences in economic circumstances and compensation practices
2) how to pay expatriate managers

Question 19

How should national diff in compensation be treated?

Answer 19

Currently, there are substantial diffrences in executive compensation across countries

Question 20

Should pay be equalized across countries?

Answer 20

Many firms moved to a pay structure that is basedon global standards
-but most still set pay according to prevailing standards

Question 21

How should expatriates be paid?

Answer 21

Pay Package has 5 components:

1) Base salary: same range as base salary for similar position in home country
2) Foreign service premium: extra pay for working outiside of home country
3) Various allowances: hardship, housing, cost of living, education
4) Tax diffrentials: to pay home country tax along with host country tax no tax treaty currently exists
5) Benefits: many firms provide the same benefits abroad that employees receive at hom

Question 22

Can organized labor limit the choices available to an international business?

Answer 22

Labor unions can limit a firms ability to pursue a transnational or global strategy

Question 23

What are the concerns of organized labor?

Answer 23

• Union bargaining power threatened by moving production to another cntry
• Mulitnationals will farm out only low-skilled jobs to foreign plants making it easier to switch production locations
• multinationals will import employment practices and contractual agreements and reduce influence of unions

Question 24

How does Organized labor respond to MNC?

Answer 24

By trying to set-up their own international organizations
By lobbying for national legislation to restrict multinationals
By trying to achieve regulation of MNC through international organizations such as the united nations.

Question 25

How are MNC’s responding to organized labor?

Answer 25

• Many firms are centralizing labor relations to enchance bargaining power of the multinational vis-a-vis organized labor
• the way in which work is organized within a plant can be a major source of competitive advantage so it is important for mgmt to have a good relationship with labor.