CHAPTER 15—INTERNATIONAL HUMAN RESOURCES MANAGEMENT
TRUE/FALSE
1. A multinational corporation is essentially a domestic firm that builds on its existing capabilities to
penetrate overseas markets.
2. In some countries, night shifts are taboo.
3. Subsidiaries of multinational corporations are run as independent companies.
4. A global corporation has fully autonomous units operating in multiple countries.
5. U.S. companies have been conducting business on an international basis longer than anyone else.
6. The European Union (EU) was established to facilitate free trade with the United States.
7. NAFTA has resulted in net job increases in the United States.
8. The host country is the country in which an international business operates.
9. Different cultural environments require different organizational behaviors.
10. A global HR information system facilitates coordination between world units but is difficult to put in
place.
11. Because of low labor costs and language similarities, many Indian companies are finding the United
States an attractive place to locate their facilities, particularly call centers.
12. Third-country nationals are dual citizenship individuals working in another (third) country.
13. At early stages of international expansion, many organizations prefer to use host-country nationals.
14. Hiring local citizens is generally less costly than relocating expatriates.
15. One reason to employ host-country nationals is that local governments want good jobs for their
citizens.
16. Essentially, the United States has a monopoly on international business.
17. A work permit or work certificate allows a foreign individual to seek employment in a government’s
country.
18. A work permit, or work certificate, is a document issued to students abroad that permits them to work
up to 20 hours per week for an organization that is headquartered in their home country.
19. Foreign workers invited to come to perform needed labor are usually referred to as guest workers.
20. Apprenticeship training in the United States is far superior to that in Europe.
21. Transnational team consists of people working on different international projects.
22. For most companies, the transnational form represents an ideal, rather than a reality.
23. Women expatriates are thought to succeed in part because they are visible and distinctive.
24. The first step in selecting expatriates should be self-selection, where employees who volunteer to go
abroad are given the chance to do so.
25. The failure of expatriate assignments is most often due to lack of technical and managerial ability.
26. Recently, companies from Japan and China have proven to be some of the most powerful companies in
the world.
27. English is almost universally accepted as the language for international business.
28. Tax incentives, tariffs, and quotas are frequently implemented by the host country to encourage local
hiring.
29. In recent years, there has also been a trend to send expatriates on longer, less-project based
assignments.
30. Managers in Latin American countries can encourage performance by using personal influence and
working through individual members of a group.
31. Personal relationships are everything in Asia, and business there can only be conducted after
relationships have been established.
32. Despite improved telecommunications and travel, it is more difficult than ever to match up employers
and employees worldwide.
33. Culture shock refers to the disorientation people receive adjusting a new culture or readjusting to their
native culture.
34. Repatriation refers to the training a manager receives before taking an international assignment.
35. Nearly all companies have career development programs designed for repatriating employees.
36. The financial crisis beginning in 2008 only made international business matters worse, as companies
were even less likely to offer jobs to foreigners who might be seen as taking jobs from national
citizens.
37. Pay plans in Japan tend to focus on individual performance and achievement.
38. Foreign workers with H2B visas can come to the United States for a maximum of six months to
perform temporary, nonagricultural seasonal work that is one-time only.
39. Employee benefits in the United States are among the highest in the world.
40. The demand for expatriate employees is growing rapidly.
41. The balance-sheet approach to compensation refers to designing pay systems that equalize the
purchasing power of employees at comparable position levels living overseas and in the home country.
42. A compensation method used to correct for the higher costs of goods and services overseas is the
balance-sheet approach.
43. Host-based pay is compensation that is equivalent to that earned by employees in the country where
the expatriate is assigned.
44. Local managers may not have sufficient perspective on the entire organization to effectively appraise
an expatriate’s performance.
45. Poor cultural fit is a major reason why international job assignments fail.
46. China has only one union.
47. In some countries, unions have alliances with other organizations like political parties, the church, and
the government.
48. English is almost universally accepted as the primary language for international business.
49. The International Labour Organization enforces international labor standards.
50. Only 20 percent of people globally are covered by any sort of social insurance programs.
51. Codetermination refers to the training an expatriate manager receives before an international
assignment.
MULTIPLE CHOICE
1. A domestic firm that has leveraged its existing capabilities to penetrate overseas markets is a/an ____
corporation.
a.
transnational
b.
international
c.
multinational
d.
global
2. An organizational firm that has fully autonomous units operating in multiple countries is:
a.
an international corporation
b.
a multinational corporation
c.
a transnational corporation
d.
a global enterprise
3. A multinational firm that has pulled control of operations back into the home office is a/an ____
corporation.
a.
transnational
b.
international
c.
multinational
d.
global
4. A corporation that treats the world market as a whole and tries to combine activities in countries to
maximize efficiency is a/an ____ corporation.
a.
transnational
b.
international
c.
multinational
d.
global
5. Matsushita is a/an ____ corporation.
a.
transnational
b.
international
c.
multinational
d.
global
6. A corporation that attempts to simultaneously achieve local responsiveness and global efficiency is
a/an ____ corporation.
a.
transnational
b.
international
c.
multinational
d.
global
7. Unilever is an example of a/an ____ corporation.
a.
transnational
b.
international
c.
multinational
d.
global
8. Which of the following is NOT a frequent criticism of NAFTA and its impact on the American job
market?
a.
loss of jobs to Mexico
b.
too many foreign companies coming into the United States
c.
lower salaries for manufacturing jobs
d.
increased illegal migration from Mexico
9. The close proximity of European countries makes them:
a.
likely candidates for international trade
b.
the European Union
c.
less competitive
d.
less likely to need to conduct business internationally
10. The European Union consists of ____ countries.
a.
16
b.
20
c.
23
d.
27
11. Cultural environment includes all of the following components except:
a.
education/human capital.
b.
values/ideologies.
c.
corporate structure.
d.
religious beliefs.
12. The term used to refer to the religion, values and attitudes, politics, technology, education, and social
organization of a nation is:
a.
ritual environment
b.
general environment
c.
cultural environment
d.
task environment
13. The country in which an international business operates is a/an:
a.
receptive country.
b.
adaptive country.
c.
resource country.
d.
host country.
14. Because cultural environments differ across the world:
a.
management styles must remain consistent
b.
U.S. corporations have an advantage over firms from other nations
c.
strategies, structures, and management styles that work in one area of the world may be
inappropriate in another
d.
the culture must adapt to the goods and services offered by transnational corporations
15. WTO member countries represent approximately ____ of all international trade.
a.
37 percent
b.
57 percent
c.
77 percent
d.
97 percent
16. In 2011 the U.S. entered a free trade agreement with the country of _____.
a.
Venezuela
b.
Columbia
c.
Cuba
d.
South Africa
17. Home-country nationals can also be called:
a.
host-country nationals.
b.
third-country nationals.
c.
international managers.
d.
expatriates.
18. U.S. citizens sent by a U.S. company to work abroad are called:
a.
host-country nationals.
b.
third-country nationals.
c.
international managers.
d.
expatriates.
19. When an American MNC hires an employee from Italy to work in its office in Rome, this employee is
referred to as a/an:
a.
expatriate.
b.
international manager.
c.
host-country national.
d.
third-country national.
20. When an American MNC hires an employee from Italy to work in its office in Bombay, this employee
is referred to as a/an:
a.
expatriate.
b.
international manager.
c.
host-country national.
d.
third-country national.
21. The source of overseas employees that provides the advantages of less cost and greater facility in the
language is:
a.
host-country nationals.
b.
home-country nationals.
c.
third-country nationals.
d.
expatriates.
22. If GM transferred Karl Hammer, a native German, away from his assignment in Bonn to a new
assignment in Paris, Karl would then be considered a:
a.
home-country national.
b.
host-country national.
c.
third-country national.
d.
home-host-country national.
23. Rolls-Royce, headquartered in the United Kingdom, hires over _____ of its 38,900 employees abroad.
a.
10 percent
b.
25 percent
c.
34 percent
d.
51 percent
24. Annually, foreigners residing in the United States file about _____ of international patent applications.
a.
15 percent
b.
25 percent
c.
35 percent
d.
45 percent
25. A document issued by a government granting authority to a foreign individual to seek employment in
that government’s country is a/an:
a.
visa card.
b.
allowance permit.
c.
work permit.
d.
passport.
26. Guest workers:
a.
are another name for home-country nationals
b.
may involve substantial indirect costs
c.
are not required to obtain a work permit
d.
are used when adequate numbers of skilled workers are available
27. Apprenticeship training in Europe directs a large number of youths into:
a.
managerial training.
b.
white-collar training.
c.
supervisory training.
d.
vocational training.
28. The ____ system of apprenticeship is one of the best in Europe.
a.
British
b.
Irish
c.
Dutch
d.
German
29. Foreign workers with H2B visas can come to the United States for a maximum of _____ months to
perform temporary, nonagricultural seasonal work that is one-time only.
a.
six
b.
nine
c.
twelve
d.
eighteen
30. Transnational teams tend to be:
a.
focused on projects that span multiple countries.
b.
comprised of members with generalized skills.
c.
homogenous.
d.
comprised of members from the same region.
31. Levi Strauss has identified all of the following as attributes of successful global managers except:
a.
ability to seize strategic opportunities.
b.
sensitivity to issues of diversity.
c.
interpersonal competency.
d.
capability to manage a highly centralized organization.
32. Today women comprise around _____ of expatriates.
a.
20 percent
b.
30 percent
c.
40 percent
d.
50 percent
33. Which of the following is the first step when selecting an individual for an international assignment?
a.
self-selection
b.
create a candidate pool
c.
assess candidates’ core skills
d.
assess candidates’ augmented skills and attributes
34. Which of the following is NOT a major component of expatriate adjustment?
a.
Economic alignment
b.
Family alignment
c.
Company alignment
d.
Country alignment
35. The first step in selecting individuals for an international assignment is:
a.
self-selection
b.
assess core skills
c.
assess augmented skills
d.
create candidate pool
36. Which of the following is the major reason for failure among expatriates?
a.
A spouse’s inability to adapt.
b.
A manager’s personality.
c.
Inability to cope with larger responsibilities.
d.
Distaste for travel.
37. In Japan, scratching your head is a sign of:
a.
non-comprehension
b.
a lack of understanding
c.
excitement
d.
anger
38. Which country is more focused upon competition, and less on cooperation?
a.
The United States
b.
Japan
c.
Taiwan
d.
China
39. Individuals working internationally need to know as much as possible about all of the following
host-country characteristics except:
a.
social and business etiquette.
b.
cultural values and priorities.
c.
political structure and current players.
d.
popular fashion trends.
40. Among the biggest problems for expatriates and foreign business travelers is:
a.
foreign exchange conversion
b.
scheduling time off
c.
driving on the “wrong” side of the road
d.
communication
41. Melanie Fitzpatrick is an American expatriate assigned to England. During a business meeting in
London with important local customers, one customer tells her that he wants to “table” the discussion
on price. He probably means that:
a.
He wants to put off discussing price until later.
b.
He wants to discuss other items before discussing the price.
c.
He wants to discuss the price immediately.
d.
He never wants to discuss price openly.
42. When something is “inconvenient” to the ____, it is most likely downright impossible.
a.
Arabs
b.
French
c.
Chinese
d.
Indians
43. According to cross-cultural studies, nations tend to cluster according to similarities in all of the
following cultural dimensions except:
a.
laws.
b.
work goals.
c.
values.
d.
job attitudes.
44. According to cross-cultural studies, ____ is/are more likely to encourage competition among
employees.
a.
Japan
b.
the United States
c.
Taiwan
d.
Asian countries (other than Japan or Taiwan)
45. The process of transition for an employee home from an international assignment is known as:
a.
expatriation
b.
repatriation
c.
magnetic travel
d.
the Boomerang effect
46. European managers, especially those in France, Germany, and Italy, tend to be ____ in their
decision-making style when compared with managers in the United States.
a.
more participatory
b.
more likely to involve others
c.
about the same
d.
more autocratic
47. Japanese managers tend to be ____ in their decision-making style when compared with U.S. managers.
a.
more participatory
b.
about the same
c.
more autocratic
d.
more likely to involve very few people
48. Which of the following questions would be the most important to ask if you were concerned about
maximizing your career benefits with a foreign assignment?
a.
How much will the assignment increase my salary?
b.
Will the assignment afford me the opportunity to learn a new language?
c.
How many executives within my organization have a foreign-service assignment in their
background?
d.
How long will the assignment last?
49. Disorientation that causes perpetual stress in people who settle overseas for lengthy periods of time is
commonly referred to as:
a.
future shock.
b.
culture shock.
c.
international disorientation.
d.
eustress.
50. Some studies show that ____ of employees leave their organizations with one or two years of returning
from an international assignment.
a.
5 percent
b.
20 percent
c.
35 percent
d.
50 percent
51. Repatriation is a process designed to:
a.
train expatriates prior to their first international assignment
b.
help employees make the transition back home
c.
adapt leadership and decision-making styles to the host country
d.
reduce communication errors in foreign assignments
52. Pay based on an expatriate’s home country’s compensation practices is known as:
a.
home based pay
b.
balance sheet scheduling
c.
cost of living pay scaling
d.
myopic earning
53. The process of repatriation begins:
a.
with the notification that the foreign assignment is over and the expatriate will return
home
b.
when the employee returns home
c.
before the employee leaves for an international assignment
d.
when the employee requests it
54. In collectivist societies such as Japan and Taiwan, pay plans focus on:
a.
individual performance
b.
internal equity and personal needs
c.
weekly or monthly salary guarantees
d.
non-financial incentives
55. In designing compensation systems, the philosophy of “thinking globally and acting locally” means
that:
a.
pay plans should be designed to support the overall strategic intent of the organization and
also provide enough flexibility to customize certain policies to meet the needs of
employees in specific locations.
b.
pay plans should be originated at the local level but global organizational issues should be
considered in pay plan development.
c.
expatriates should be rewarded only for their local actions.
d.
expatriates should be rewarded for their local actions as well as their performance that
impacts the entire organization.
56. A system whereby expatriates are given a portion of their pay in the local currency to cover their
day-to-day expenses and a portion of their pay in their home currency to safeguard their earnings from
changes in inflation or foreign exchange rates is known as:
a.
host based pay
b.
localization
c.
split pay
d.
home based pay
57. Among the following countries, which has the highest hourly wages?
a.
the United States
b.
Japan
c.
Germany
d.
Sweden
58. Adapting pay and other compensation benefits to match that of a particular country is known as:
a.
localization
b.
split pay
c.
host based pay
d.
home based pay
59. In using the balance-sheet approach to compensating expatriate managers, the term “incentives” refers
to the concept of:
a.
paying essentially the same as home-country counterparts are paid in similar jobs.
b.
compensating the managers for separation from family and friends.
c.
covering moving, storage, and educational expenses.
d.
offsetting the higher costs of overseas goods, services, and housing.
60. In using the balance-sheet approach to compensating expatriate managers, the term “differentials”
refers to the concept of:
a.
paying essentially the same as to home-country counterparts in similar jobs.
b.
compensating the person for separation from family and friends.
c.
covering moving, storage, and educational expenses.
d.
offsetting the higher costs of overseas goods, services, and housing.
61. Which of the following is NOT one of the five steps related to calculating the ROI of an international
assignment?
a.
Defining the assignment’s objectives
b.
Developing an equation that converts qualitative behavior into quantifiable
measurements
c.
Prioritizing qualitative mechanisms and aspects
d.
Calculating the return on investment
62. The most active of the international union organizations has been the:
a.
European Labour Organization
b.
International Labour Organization
c.
European Trade Union Confederation
d.
International Trade Union Confederation
63. Which of the following groups of individuals tends to be in the best position to evaluate their own
performance?
a.
expatriates
b.
chief executive officers
c.
middle-level managers
d.
technicians
64. China has:
a.
one union
b.
two unions
c.
three unions
d.
four unions
65. A specialized agency of the United Nations that researches and endorses labor standards is called:
a.
the World Trade Organization
b.
the International Labour Organization
c.
the Congress of Industrial Organizations
d.
the Center for Collective Bargaining
66. Only ____ percent of people globally are covered by any sort of social programs.
a.
five
b.
ten
c.
fifteen
d.
twenty
67. A very high level of worker participation in management is found in Germany, where national law
requires that labor be part of the boards of directors of companies. This participative arrangement is
called:
a.
German unionization.
b.
worker councils.
c.
shop steward movement.
d.
codetermination.
68. Overseas-based companies have experienced _________________ in the U.S.
a.
little or no success despite enormous capital investment
b.
dominance, like Toyota Motor Corporation
c.
overwhelming rejection by consumers
d.
hostile government regulation
69. A domestic firm, like Honda, General Electric, and Procter &Gamble, that builds on existing
capabilities to penetrate overseas markets is an example of a(n) ________________ corporation.
a.
transnational
b.
international
c.
multinational
d.
global
ESSAY
1. What are the primary differences among international, multinational, global, and transnational
corporations?
2. A company has three basic sources to use when staffing its foreign operation. Name the three sources
of overseas managers and state advantages and disadvantages of each.
3. What are the steps involved in selecting individuals for an international assignment?
4. Discuss the five essential elements of training and development programs and how they prepare
employees for working internationally.
ANS:
5. Describe helpful guidelines in repatriating employees from an overseas assignment.
6. Define and describe the balance-sheet approach used by many MNCs to calculate the compensation
they wish to offer to their expatriates.