Week 4 - International Assignments & Staffing Flashcards
What are the different staffing policies available to MNCs?
- Parent country national: nationality of employee is the same as that of the headquarters of the multinational firm
e. g. a German employee working at a Chinese subsidiary of Volkswagen - Host country national: nationality of employee is the same as that of the local subsidiary
e. g. a Chinese employee working at the Chinese subsidiary of Volkswagen - Third country national: nationality of employee is neither that of the headquarters nor the local subsidiary
e. g. an Indian employee working at the Chinese subsidiary of Volkswagen
What is the data regarding PCNs from Harzing (2001)?
- PCNs = managing directors in over 40% of the subsidiaries
- Higher % of PCNs in Latin America, Africa, Asia & Middle East (issues of resources/cultural influences & norms)
- Lower expatriate presence in Canada, Western Europe & Scandinavia (Western management models)
- Higher PCN presence in banking services and motor sector, lower in food sector (food sector more culturally sensitive/ rely on local aspect)
Give some features of the current expatriate profile?
- Greater % = male
- 30-49 = largest age group
- Greater % = married (families targeted because moving to foreign countries with people you know is nicer)
- Primary reason = fill a position
Align MNC business strategies with staffing strategies
ETHNOCENTRIC MNCs: PCNs for top positions abroad
POLYCENTRIC MNCs: mostly HCNs for top positions
REGIOCENTRIC MNCs: managers are transferred on a regional basis
GEOCENTRIC MNCs: TCNs for top positions
Can a company be labelled as one specific type of business strategy?
No - hard to label a company as one single strategy; sometimes combination of two or more
Define the ethnocentric approach
Objective is to establish the parent company’s corporate culture in the subsidiary
- More common in the early stages of internationalization
Explain some of the positives and negatives associated with the ethnocentric approach
- Reduces the communication between headquarters and the subsidiary and increases control by the headquarters
- However, expatriates may not be able to cope with cultural differences and environmental differences thus resulting in costly management mistakes (e.g. Hyundai, Samsung)
- Can alienate HCN employees - ‘not given chance’
- Differences in PCN expatriate pay could anger HCNs
Define the polycentric approach
Appointment of a host country executive along with a home country executive to support and vice versa
Explain some of the positives and negatives associated with the polycentric approach
- Addresses the problems associated with the ethnocentric approach, while reaps the benefit of local management (e.g. Pepsi, Coca-Cola)
- Might be issues with control and communications between home and host countries
- Lack of opportunities for local nationals
Define the geocentric approach
Appointment of the best person for the job irrespective of the nationality
Explain some of the problems associated with the geocentric approach
- Suffers from similar problems to the ethnocentric approach (e.g. Nestle, Unilever, HP)
What are the 4 factors that influence MNC staffing decisions? Particularly between choosing HCNs or PCNs
Likelihood of PCN in managing director position at foreign subsidiaries
PARENT COUNTRY/COMPANY CHARACTERISTICS
+ level of uncertainty avoidance
+ cultural distance between parent and host country
+ size of the company
- R&D intensity (knowledge transferred by technical specialists)
HOST COUNTRY ENVIRONMENT
- education level
+ political risk
- cost of living higher than parent company
SUBSIDIARY CHARACTERISTICS - age - acquisition \+ majority ownership - reporting distance from HQ \+ size - performance
INDUSTRY
More PCNs in services than manufacturing and electronics
Why do companies assign employees abroad?
Edstrom and Galbraith (1977):
Position filling: transfer of technical and managerial knowledge
Management development: expatriates acquire international experience
Organisational development: direct and indirect coordination and control
(socialization of both expatriate and local managers into corporate culture and verbal information network that provides links between subsidiaries and HQ)
Explain what ‘assignees as knowledge agents’ means
- Assignees acquire an understanding of the company’s global organisation and the corporate culture at the HQ, factual knowledge about the assignment culture, and culture- specific repertoires
- Assignees also share relevant knowledge that helps to streamline cross-unit processes, creates common corporate practices and routines, or increases the chances of subsidiary survival
- Large part of the knowledge transferred across MNC units is highly context-specific and tacit in nature, meaning it cannot be codified in written documents.
- Requires knowledge sender and recipient to interact directly
What are the expatriate selection criteria, based on the individual?
- Technical ability (must have skills to do the job)
- Cross-cultural suitability (have they had international exposure before, not necessarily related to the host country they’re going to)
- Family requirement (less relevant, families often targeted)
