80.
What are the four strategies pursued by international companies, and what
is the role of HRM in these?
The four strategies pursued by international businesses are localization,
where value is created by emphasizing local responsiveness; international,
where value is created by transferring products and competencies overseas;
global standardization, where value is created by realizing experience curve
and location economies; and transnational, where value is created by doing
all of these things simultaneously. HRM policies must be congruent with the
firm’s strategy.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-01 Summarize the strategic role of human resource management in international business firms.
Topic: The Strategic Role of International HRM
81.
Discuss corporate culture. How is corporate culture related to a firm’s
performance?
Corporate culture refers to the organization’s norms and value systems. A
strong corporate culture can help a firm to implement its strategy. If
employees are predisposed toward the organization’s norms and value
systems by their personality type, the firm will be able to attain higher
performance.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business
firms.
Topic: Staffing Policy
82.
What are the three types of staffing policies in international business?
Briefly describe each one. Which is the most attractive approach and why?
There are three types of staffing approaches in international business. First,
the ethnocentric approach is one in which all key management positions are
filled by parent-country nationals. Second, the polycentric approach
involves recruiting host-country nationals to manage subsidiaries while
parent-country nationals occupy key positions at corporate headquarters.
Third, the geocentric policy seeks the best people for key jobs throughout
the organization, regardless of nationality. This approach is probably the
most attractive because it enables the firm to make the best use of its
human resources, and it allows the firm to build a cadre of international
executives who feel at home working in a number of cultures.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business
firms.
Topic: Staffing Policy
83.
Why should a firm pursue an ethnocentric approach to staffing? What are
the disadvantages of this approach?
Firms pursue an ethnocentric staffing policy for three reasons. First, the
firm may believe there is a lack of qualified individuals in the host country to
fill senior management positions. Second, the firm may see an ethnocentric
staffing policy as the best way to maintain a unified corporate culture.
Third, if the firm is trying to create value by transferring core competencies
to a foreign operation, it may feel that the best way to do this is to transfer
parent-country nationals who have knowledge of that competency to the
foreign operation.
The disadvantages of ethnocentric approach to staffing is that the policy
limits advancement opportunities for host-country nationals, which can lead
to resentment, lower productivity, and increased turnover among that group.
The policy can also lead to cultural myopia.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business
firms.
Topic: Staffing Policy
84.
Discuss the advantages and disadvantages of a polycentric approach to
staffing.
A polycentric staffing policy requires host-country nationals to be recruited
to manage subsidiaries, while parent-country nationals occupy key
positions at corporate headquarters. One advantage of adopting a
polycentric approach is that the firm is less likely to suffer from cultural
myopia. Host-country managers are unlikely to make the mistakes arising
from cultural misunderstandings that expatriate managers are subject to.
Another advantage of the polycentric approach is that it may be less
expensive than other approaches to implement.
However, because host-country nationals have limited opportunities for
advancement, resentment may arise. Furthermore, a gap may form between
host-country managers and parent-country managers leading to a lack of
integration between corporate headquarters and foreign subsidiaries.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-02 Identify the pros and cons of different approaches to staffing policy in international business
firms.
Topic: Staffing Policy
85.
How can polycentric approach to staffing result in the creation of a
“federation” within the firm? Why is this a disadvantage for the firm?
A polycentric approach can lead to a gap between host-country managers
and parent-country managers. Language barriers, national loyalties, and a
range of cultural differences may isolate the corporate headquarters staff
from the various foreign subsidiaries. The lack of management transfers
from home to host countries, and vice versa, can exacerbate this isolation
and lead to a lack of integration between corporate headquarters and
foreign subsidiaries. The result can be a “federation” of largely independent
national units with only nominal links to the corporate headquarters.
Within such a federation, the coordination required to transfer core
competencies or to pursue experience curve and location economies may
be difficult to achieve. The federation that may result from a polycentric
approach can also be a force for inertia within the firm.
AACSB: Analytic
Blooms: Understand
86.
What are the advantages of the geocentric staffing policy?
A geocentric staffing policy has a number of advantages. First, it enables
the firm to make the best use of its human resources. Second, a geocentric
policy enables the firm to build a cadre of international executives who feel
at home working in a number of cultures. Creation of such a cadre may be a
critical first step toward building a strong unifying corporate culture and an
informal management network, both of which are required for global
standardization and transnational strategies. Firms pursuing a geocentric
staffing policy may be better able to create value from the pursuit of
experience curve and location economies and from the multidirectional
transfer of core competencies than firms pursuing other staffing policies. In
addition, the multinational composition of the management team that
results from geocentric staffing tends to reduce cultural myopia and to
enhance local responsiveness.
87.
What is expatriate failure?
A prominent issue in the international staffing literature is expatriate failure
—the premature return of an expatriate manager to his or her home country.
Expatriate failure represents a failure of the firm’s selection policies to
identify individuals who will not thrive abroad. The consequences include
premature return from a foreign posting and high resignation rates.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-03 Explain why managers may fail to thrive in foreign postings.
Topic: Staffing Policy
88.
Discuss the reasons why expatriate managers fail to complete their foreign
assignment. Do
The question of why expatriates fail to complete their foreign assignments
was studied by R. L. Tung who found that U.S. firms experienced a
significantly higher failure rate than either European or Japanese firms. For
American firms, the reasons for expatriate failure, in order of importance,
were: (1) inability of spouse to adjust, (2) manager’s inability to adjust, (3)
other family problems, (4) the manager’s personal or emotional maturity,
and (5) inability to cope with larger overseas responsibilities. However, for
Topic: Staffing Policy
89.
A number of other studies have consistently confirmed that the inability of a
spouse to adjust remains a major reason for continuing high levels of
expatriate failure. Discuss the reasons behind the difficulties a spouse
faces in adapting to a new country.
The failure of spouse to adjust appears to be related to a several factors.
Often spouses find themselves in a foreign country without the familiar
network of family and friends. Language differences make it difficult for
them to make new friends, making the spouse feel trapped at home. If
immigration rules prohibit employment, the spouse may find it even more
difficult to adapt. Research suggests that a main reason managers now turn
down international assignments is concern over the impact the assignment
might have on their spouse’s career.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-03 Explain why managers may fail to thrive in foreign postings.
Topic: Staffing Policy
90.
Discuss Mendenhall and Oddou’s assertion that an executive who performs
well in a domestic setting may not adapt to a different cultural setting.
According to Mendenhall and Oddou, many managers tend to equate
domestic performance with overseas performance potential. However, the
researchers suggest that success in a foreign job posting depends not on
domestic performance, but instead on four dimensions. First, an expatriate’s
self-orientation will affect performance. Expatriates with high self-esteem,
self-confidence, and mental well-being are more likely to succeed in foreign
jobs. Second is others-orientation. The more effectively an expatriate
interacts with host-country nationals, the more likely he/she is to succeed.
Third, an expatriate’s perceptual abilities are important to success.
Managers need to be able to understand why people of other countries
behave the way they do. Finally, cultural toughness is a measure of how
well an expatriate adjusts to a particular situation, especially when the