Chapter 14 – Human Resource Selection and Development Across Cultures
i) Conducting a technical skills match to ensure that one’s skills are in line with those
iv) Making one’s superior aware of this interest in an international assignment
c) Phase three consists of activities to be completed after being selected for an overseas
assignment. They include:
i) Attending training sessions provided by the company
Economic Pressures and Trends in Expat Assignments
1) Despite the economic recession of 2008–2010, most MNCs continue to make overseas
assignments.
2) Driving this trend is a feeling of optimism about the continued growth of emerging
markets like China, and the further integration of the European Union.
3) Family concerns are the most common reason to refuse an expat assignment.
a) This was followed by:spousal career concerns and family related concerns.
b) Family-related concerns also were important in the duration of international
assignments and were the main driver of early returns from assignments.
4) Other issues:
a) The lack of relevance of assignments to one’s career progress
b) The general inconveniences caused by assignments
turnover within one year of completing assignments.
5) Other findings:
a) 19 percent of expatriates were women.
b) 50 percent of expatriates were 20 to 39 years old.
c) 60 percent of expatriates were married.
i) China, India, and Russia were the primary emerging destinations.
14-11
Chapter 14 – Human Resource Selection and Development Across Cultures
j) China, India, and Russia also were cited as the most challenging locations for
administrators overseeing employee relocations.
International Human Resource Selection Procedures
1) The two most common selection procedures used by MNCs are tests and interviews.
Testing and Interviewing Procedures
1) Some evidence suggests that although some firms use testing, it is not extremely popular.
a) An early study found that almost 80 percent of the 127 surveyed foreign operations
managers reported that their companies used no tests in the selection process.
b) Many MNCs report that the costs, questionable accuracy, and poor predictive record
make testing of limited value. Many firms use interviews to screen people for overseas
assignments.
2) Many firms do use interviews to screen people for overseas assignments. Even for
technically oriented positions, a sizable proportion of the firms did conduct interviews
with both candidate and spouse.
The Adjustment Process
1) In recent years, international human resource management scholars have developed
theoretical models that help to explain the factors involved in effectively adjusting to
overseas assignments.
2) There are two major types of adjustments that an expatriate must make when going on an
overseas assignment.
a) The anticipatory adjustment: This is carried out before the expat leaves for the
assignment. Factors:
i) Pre-departure training: cross-cultural seminars or workshops
ii) Previous experience
b) The in-country adjustment, which takes place on-site. Factors:
i) The expat’s ability to maintain a positive outlook in the face of a high-pressure
situation, to interact well with host nationals, and to perceive and evaluate the host
country’s cultural values and norms correctly
v) The expat’s ability to develop effective socialization tactics and to understand
“what’s what” and “who’s who” in the host organization
14-12
Chapter 14 – Human Resource Selection and Development Across Cultures
3) Process model of five stages that delineates how expatriates form adjustment facilitating
support ties in a culturally unfamiliar context: Factors influencing:
a) Stage 1: expatriates’ motivation to seek support from actors in the host country
4) Additionally, one of the ways in which MNCs often try to put potential expats at ease
about their new assignment is by presenting an attractive compensation package.
Compensation
1) One of the reasons why there has been a decline in the number of expats in recent years is
that MNCs have found that the expense can be prohibitive.
2) Mercer reported in 2009 that nearly 40 percent of MNCs were planning on revising their
current international assignment policy in the face of declining corporate growth and
profitability, as well as an uncertain economic environment.
3) The increasing trend toward localization reflects companies’ efforts to either tap into the
local talents or to offer less generous packages to locally hired foreign workers. The
elements that are least likely to be eliminated for localized employees are housing
allowances and education benefits.
Common Elements of Compensation Packages
1) The overall compensation package often will vary from country to country.
2) There are, however, five common elements in the typical compensation package.
a) Base Salary: Base salary is the amount of money that an expatriate normally receives
in the home-country.
b) Benefits: Approximately one-third of compensation for regular employees is benefits.
These benefits compose a similar, or even larger, portion of expat compensation.
Issues:
i) Whether MNCs should maintain expatriates in home-country benefit programs
ii) Whether MNCs have the option of enrolling expatriates in host-country benefit
country
vi) Which country should pay for the benefits
vii)Whether other benefits should be used to offset any shortfall in coverage
14-13
Chapter 14 – Human Resource Selection and Development Across Cultures
viii)Whether home-country benefits programs should be available to local nationals
c) Allowances: Allowances are an expensive feature of expatriate compensation
packages.
i) One of the most common parts is a cost-of-living allowance―a payment for
differences between the home-country and the overseas assignment
ii) Relocation expenses typically involve moving, shipping, and storage charges that
in an area with a poor quality of life. The lump-sum payment has a number of
benefits: incentive, costs the company less, readily available for saving or
spending
e) Taxes: The other major component of expatriate compensation is tax equalization.
Usually, MNCs pay the extra tax burden.
Tailoring the Package
1) Working within the five common elements just described, MNCs will tailor-make
compensation packages to fit the specific situation.
2) A number of approaches can be used.
a) The balance sheet approach is the most common and is based on ensuring the expat is
“made whole” and does not lose money by taking the assignment.
person decide how to spend the available funds.
f) The regional system involves setting a compensation system for all expats who are
assigned to a particular region and paying everyone in accord with that system.
3) As a result of the 2008–2010 recession, many companies are making changes to their
expatriate staffing and compensation practices.
14-14
Chapter 14 – Human Resource Selection and Development Across Cultures
Individual and Host-Country Viewpoints
1) It is important to consider (1) the perspective of the individual who is being selected and
(2) the perspective of the target host country when making decisions about filling
subsidiary positions.
Candidate Motivations
1) Why do individuals accept foreign assignments? One answer is a greater demand for their
talents abroad than at home.
2) Major motivational differences:
a) Anglo cluster: more interested in individual achievement, less interested in the desire
for security
and earnings
f) Japanese: unique in their mix of desires―high on earnings but low on advancement,
high on challenge but low on autonomy, strong on friendly and efficient work with
good physical working conditions
3) Countries that are attractive to candidates tend to have a higher quality of life. A survey of
Swedish managers revealed that top tier countries included Switzerland, Belgium,
England, the United States, and Portugal.
Host-Country Desires
1) Although many MNCs try to choose people who fit in well, little attention has been paid
to the host-country’s point of view. Whom would it like to see put in managerial
positions?
2) Research shows that host countries typically prefer a managerial style similar to that of
their country. Comparative positive and negative managerial behaviors by country are
outlined in Table 14–5 in the text.
Repatriation of Expatriates
1) Repatriation refers to the return to one’s home-country from an overseas management
assignment.
2) Few expatriates remain overseas for the duration of their stay with the firm.
14-15
Chapter 14 – Human Resource Selection and Development Across Cultures
Reasons for Returning
1) The most common reason that expatriates return home from overseas assignments is that
their formally agreed-on tour of duty is over.
2) Another common reason is that expatriates want their children educated in a home-
country school.
3) A third common reason is that the expatriate or family is not happy in the assignment.
4) A fourth reason for early return of the expatriate is poor performance.
Readjustment Problems
1) After returning home, some expatriates have readjustment problems.
2) The reasons for readjustment difficulties vary, but many managers feel they have been
demoted when they return. Some feel that they are unable to put their foreign experience
to good use, others feel that they were not properly informed of what would happen when
they returned. Some feel their standard of living is lower after they return from a foreign
assignment.
3) Black’s research found the following:
a) Individuals whose expectations were met generally had the most positive levels of
repatriation adjustment and job performance.
b) Expatriates whose job demands were greater than expected reported high levels of
e) If general expectations were met or overmet, job evaluations were higher.
Transition Strategies
1) Transition strategies are used to help smooth the adjustment from an overseas to a
stateside assignment.
2) Repatriation agreements tell the individual how long she or he will be posted overseas and
promises to give the individuals, on return, a job that is mutually acceptable.
3) Main problems of repatriation:
14-16
Chapter 14 – Human Resource Selection and Development Across Cultures
d) not receiving any career counseling from the company
4) Some additional steps suggested:
a) Arrange an event to welcome and recognize the employee and family, either formally
or informally.
b) Establish support to facilitate family reintegration.
h) Arrange a postassignment interview with the expatriate and spouse to review their
view of the assignment and address any repatriation issues.
5) To the degree that corporate communication and reentry training activities help the
returning executive and spouse in expectation alignment, the executive’s level of reentry
satisfaction should be higher and the degree of reentry difficulties less.
Teaching Tip: There are a number of private HRM firms that provide selection, training, and
repatriation services for expatriate managers. An example of one of these companies can be
found at {http://www.global-dynamics.com/}.
Training in International Management
1) Training is the process of altering employee behavior and attitudes in a way that increases
the probability of goal attainment.
2) Times of training:
a) By providing training prior to a foreign assignment, companies can ensure that an
employee’s full potential is tapped.
b) The simplest training, in terms of preparation time, is to place a cultural integrator in
each foreign operation; The integrator advises, guides, and recommends actions
needed to ensure this synchronization.
3) Cross-cultural training is becoming increasingly popular.
4) Cultural training usually covers topics like social etiquette, customs, economics, history,
politics, and business etiquette.
5) Sparrow and Budhwar study of human resource management (HRM) factors:
a) Structural empowerment: flat organization designs, wide spans of control, the use of
flexible cross-functional teams, and rewarding of individuals for productivity gains
b) Accelerated resource development: early identification of high-potential employees,
establishment of both multiple and parallel career paths, rewarding of personnel for
14-17
Chapter 14 – Human Resource Selection and Development Across Cultures
enhancing their skills and knowledge, and offering of continuous training and
and monthly short-term productivity
6) MNCs will have to focus increasingly on HRM programs designed to meet the needs of
local personnel.
a) Training programs
b) A good social working environment
Teaching Tip: A forum for international trade training is available online at
{http://www.fitt.ca/}. Established in 1992, the Forum for International Trade Training
(FITT) is a not-for-profit organization mandated by the Canadian government in
partnership with private industry to remedy the shortage of people with the skills
necessary to succeed in overseas markets.
The Impact of Overall Management Philosophy on Training
1) The type of training that is required of expatriates is influenced by the firm’s overall
philosophy of international management.
2) Four basic philosophic positions of multinational corporations (MNCs) can influence the
training program.
a) An ethnocentric MNC stresses nationalism and often puts home office people in
charge of key international management positions.
handle operation in and around that area.
d) A geocentric MNC seeks to integrate diverse regions of the world through a global
approach to decision-making.
3) All four of these philosophical positions can be found in the multinational arena, and each
puts a different type of training demand on the MNC.
The Impact of Different Learning Styles on Training and Development
1) Learning is the acquisition of skills, knowledge, and abilities that results in a relatively
permanent change in behavior.
14-18
2) Over the last decade, many multinationals have tried to become “learning organizations.”
Now some MNCs are becoming “teaching organizations.” Conclusions from the
experience:
a) In teaching organizations, leaders see it as their responsibility to teach.
e) People with different learning styles prefer different learning environments.
Reasons for Training
1) Training programs are useful in preparing people for overseas assignments for many
reasons.
2) Two general categories among the reasons:
a) Organizational Reasons: Organizational reasons for training relate to the enterprise
at large and its efforts to manage overseas operations more effectively.
i) Primary reason: To overcome ethnocentrism which is the belief that one’s own way
of doing things is superior to that of others
(a) Training can help home-office managers understand the values and customs of
ii) Second reason: To improve the flow of communication between the home office
and the international subsidiaries and branches
iii) Another reason: To increase overall efficiency and profitability
b) Personal Reasons
i) To help overseas managers improve their ability to interact effectively with local
people and their personnel
ii) To dispell myths and stereotypes by replacing them with facts about the culture
iii) To help minimize personal problems caused by the belief that foreign language
skills are not really essential to doing business overseas
vi) To avoid open criticism by expatriate managers of their own country or the host
country
3) Training can be useful in improving overall management style.
a) Many host-country nationals would like to see changes in some of the styles of
expatriate managers, including their leadership, decision making, communication, and
group work.
b) Locals would like to see:
i) Their expatriate managers be more friendly, accessible, receptive to subordinate
suggestions, and encouraging to subordinates to make their best efforts
14-19
Chapter 14 – Human Resource Selection and Development Across Cultures
ii) Clearer definition of goals, more involvement in the process by those employees
iv) More group problem solving and teamwork
4) The specific training approach used must reflect both the industrial and the cultural
environment.
Types of Training Programs
1) There are many different types of multinational management training programs.
a) Some last only a few hours; others last for months.
b) Some are very superficial; others are extensive in coverage.
2) Organizations can decide what training program works best by determining the
effectiveness of the program, and altering it accordingly.
Standardized vs. Tailor-Made
1) Some management training is standard, or generic. In contrast, tailor–made training
programs are created for the specific needs of the participants.
2) Postdeparture training programs are conducted on-site. These often take the form of
systematically familiarizing the individual with the country through steps such as:
a) Meeting with government officials and other key personnel in the community
d) Taking on-site language training
3) Training approaches that are successful in one geographic region of the world may need to
be heavily modified if they are to be as effective elsewhere.
4) In addition to training expats and their families, effective MNCs also are developing
carefully crafted programs for training personnel from other cultures who are coming into
their culture. Specific steps:
a) Local instructors and a translator observe the pilot training program or examine
written training materials.
b) Educational designer debriefs the observation with the translator, curriculum writer,
and local instructors.
14-20