91.
What is cultural toughness?
Mendenhall and Oddou identified four dimensions that seem to predict
success in a foreign posting: self-orientation, others-orientation, perceptual
ability, and cultural toughness. Cultural toughness refers to the relationship
between the country of assignment and how well an expatriate adjusts to a
particular posting. Some countries are much tougher postings than others
because their cultures are more unfamiliar and uncomfortable.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-03 Explain why managers may fail to thrive in foreign postings.
Topic: Staffing Policy
92.
What are the three types of training for expatriate managers?
Training can help a manager and spouse cope with issues of adjusting to
the foreign environment. Three types of training are important. Cultural
training seeks to foster an appreciation for the host country’s culture. The
belief is that understanding a host country’s culture will help the manager
empathize with the culture, which will enhance his/her effectiveness in
dealing with host-country nationals. Language training is vital to an
expatriate’s ability to interact with host-country nationals. Finally, practical
training is aimed at helping the expatriate manager and family ease
themselves into day-to-day life in the host country.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-04 Recognize how management development and training programs can increase the value of
human capital in international business firms.
Topic: Training and Management Development
93.
Discuss why the repatriation process is so difficult for so many expatriates.
Preparing expatriates for reentry into their home-country organization is
generally overlooked, yet represents a huge challenge for firms. Often when
expatriates return home after a stint abroad they face an organization that
doesn’t know what they have done for the last few years, doesn’t know how
to use their new knowledge, and doesn’t particularly care. In the worst
cases, reentering employees have to scrounge for jobs, or firms create
standby positions that don’t use the expatriate’s skills and capabilities and
fail to make the most of the business investment the firm has made in that
individual.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-04 Recognize how management development and training programs can increase the value of
human capital in international business firms.
Topic: Training and Management Development
94.
Describe the notion of management development programs as a tool for
increasing the overall skill levels of managers. What is the goal of this type
of program?
Management development programs are designed to increase the overall
skill levels of managers through a mix of ongoing management education
and rotations of managers through a number of jobs within the firm to give
them a broad range of experience. The goal of this type of program is to
improve overall productivity and quality of the firm’s management
resources. As a strategic tool, management development programs can play
an important role in international businesses. These programs can help a
firm build a corporate culture that is sensitive to international business
issues. Moreover, by rotating managers, firms can build informal
management networks, networks that can then be used as a conduit for
exchanging information within an organization.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
95.
How can firms reduce the bias in performance appraisals of expatriate
managers?
Unintentional bias makes it difficult to evaluate the performance of
expatriate managers objectively. This bias can be reduced in several ways.
First, most expatriates believe that more weight should be given to an on–
site manager’s appraisal than to an off-site manager’s appraisal. If the on-
site manager is of the same nationality as the expatriate manager, cultural
bias can also be reduced. Finally, when the policy is for foreign on-site
managers to write performance evaluations, home-office managers, in an
effort to avoid cultural misunderstandings, should be consulted before an
on-site manager completes a formal termination evaluation.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-05 Explain how and why performance appraisal systems might vary across nations.
Topic: Performance Appraisal
96.
Should a firm pay executives in different countries according to the
prevailing standards in each country, or should it equalize pay on a global
basis?
Substantial differences exist in the compensation of executives at the same
level in various countries. These differences raise the question of whether a
firm should pay its expatriate managers the prevailing wage rate in the
country that they are working in, or whether the firm should pay all of its
expatriate managers at the same level of responsibility a similar amount of
pay? For a U.S. firm, this could mean raising the compensation of foreign
nationals to U.S. levels, a policy that could prove to be very expensive. Yet,
if a firm does not equalize pay, it could cause considerable resentment
among foreign nationals who work with U.S. managers.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-06 Explain how and why compensation systems might vary across nations.
Topic: Compensation
97.
What is the most common approach to expatriate pay? Explain what
comprises this form of compensation. What is the advantage of this
approach?
The most common approach to expatriate pay is the balance sheet
approach. This approach has the advantage of equalizing purchasing power
across countries so that employees can enjoy the same living standard in
their foreign posting as they enjoyed at home. In addition, the approach
provides financial incentives to offset qualitative differences between
assignment locations. The typical expatriate compensation package is
comprised of a base salary, a foreign-service premium, allowances of
various types, tax differentials, and benefits.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 19-06 Explain how and why compensation systems might vary across nations.
Topic: Compensation
98.
Consider the allowance component of a typical expatriate compensation
package. What types of allowance are included in this component?
There are four types of allowances that are usually included in an
expatriate’s compensation package. A hardship allowance is paid when the
expatriate is being sent to a location where basic amenities are grossly
deficient as compared to the home country. A housing allowance may be
included to ensure that the expatriate can afford the same quality of
housing in the foreign country as in the home country. A cost-of-living
allowance may be paid to ensure that the expatriate enjoys the same
standard of living in the foreign location as at home. Finally, education
allowances may be included to ensure that an expatriate’s children receive
adequate schooling.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-06 Explain how and why compensation systems might vary across nations.
Topic: Compensation
99.
Discuss the concerns of organized labor.
A principle concern of domestic unions about multinational firms is that a
company can counter its bargaining power with the power to move
production to another country. Another concern is that an international
business will keep highly skilled tasks in its home country and farm out only
low-skilled tasks to foreign plants. A final concern arises when an
international business attempts to import employment practices and
contractual agreements from its home country. When these practices are
alien to the host country, organized labor fears the change will reduce its
influence and power.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-07 Understand how organized labor can influence strategic choices in international business firms.
Topic: International Labor Relations
100.
What are the three actions taken by organized labor to respond to the
increased bargaining power of multinationals? How successful have these
efforts been?
Organized labor has responded to the increased bargaining power of
multinationals by taking three actions. First, organized labor is trying to
establish international labor organizations. Second, labor is lobbying for
national legislation to restrict multinationals. Finally, organized labor is
trying to achieve international regulations on multinationals through
organizations such as the UN. To date, success in these efforts has been
limited.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 19-07 Understand how organized labor can influence strategic choices in international business firms.
Topic: International Labor Relations