Competing Through Sustainability:
The Potential for Electric Cars
This vignette explains the dilemma faced by electric car producer Fisker Automotive. Although
clean vehicle development has been high on the list for the Obama administration, problems with
development, production, and supply chain issues continue to hinder full-scale success of
projects like electric cars.
Discussion Question
1. How could expanding globally impact Fisker’s ability to succeed?
As explained in the vignette, Fisker’s primary issue at this time is sourcing batteries for
1. International – International participation occurs as companies seek new
2. Multinational – Whereas international companies build one or a few
3. Global – Global organizations compete on state-of-the-art, top-quality
a. Transnational scope refers to the fact that HR decisions must be
b. Transnational representation reflects the multinational
c. Transnational process refers to the extent to which the company’s
C. Managing Expatriates in Global Markets—As companies internationalize, the use
of expatriates becomes more frequent. Issues of selection, training, compensating,
and reacculturation of expatriates are discussed in this section.
1. Selection of Expatriate Managers – Successful expatriates have the
following skills or abilities:
a. Technical competence
b. Ability to adjust to, and be sensitive to, a new culture (see Table
15.3 in the text for selection criteria). Three dimensions include:
– the self dimension
– the relationship dimension
– the perception dimension
c. Use of women in expatriate assignments has proven beneficial for
companies; recent evidence disproves the notion that women are
not successful managers in foreign countries.
2. Training and Development of Expatriates—Expatriates must understand
their own culture and how it is perceived by others. Particular aspects of
culture in the new work environment must be learned (see text Table 15.4
for international body language). Expatriates must learn to communicate
accurately in the new culture/language (see Table 15.5 in the text for tips
on communicating across language barriers).
3. Compensation of Expatriates—Careful balancing must occur to assure that
expatriates are rewarded in an equitable manner. Allowances for housing,
taxes, moving costs, and children’s schooling are part of the package. A
typical balance sheet is shown in Figure 15.4. Table 15.6 provides an idea
of how much add-ons can cost for an expatriate.
Total pay packages have four components:
a. Base Salary—Annual salary, unadjusted.
b. Tax Equalization allowances—Payments for higher tax rates of
other countries.
c. Benefits—Continuation of, or substitute for, home benefits
package.
d. Allowances—Cost-of-living, housing, education, and relocation
payments to make the assignment more attractive (Table 15.7
shows the differences in the cost of living among larger
international cities and Figure 15.6 shows a typical summary sheet
for an expatriate manager’s compensation package).
4. Reacculturation of Expatriates—Reentry to the home organization may
result in culture shock. Transition process necessitates communication of
corporate changes while the expatriate is overseas and validation of the
importance of the expatriate’s international work (Table 15.7).
A Look Back
Having discussed the various differences in cultures, economic systems, human capital
and political-legal systems, one would not expect Smithfield Foods takeover by
Shuanghui to be an easy transition. A company built in an individualistic culture with free
market capitalism and the rule of law may find difficulties in being managed by leaders
from a collectivist culture functioning in a relatively controlled economy and a political
system characterized as not the rule of law, but the law of rulers.
Certainly the merging of these two food giants makes sense from a supply chain
standpoint, but executing the merger strategy may not be easy.
Questions
1. What do you think will be the biggest areas of conflict between the U.S. and Chinese
operations?
Student answers may vary, but one definitive area of potential conflict will revolve
2. Do you think the people at Smithfield will be managed differently once they are
employed by a Chinese company even though they are still working in the United States?
Why or why not?
Again student responses will likely vary, but it is important to bring up the discussion
Chapter Vocabulary
These terms are defined in “The Extended Chapter Outline” section.
Individualism/Collectivism
Power Distance
Uncertainty Avoidance
Masculinity-Femininity Dimension
Long-Term/Short-Term Orientation
Parent Country
Host Country
Third Country
Expatriate
Parent-Country Nationals (PCN)
Host-Country Nationals (HCN)
Third-Country Nationals (TCN)
Transnational Scope
Transnational Representation
Transnational Process
Discussion Questions
1. What current trends and/or events (besides those mentioned at the outset of the chapter) are
responsible for the increased internationalization of the marketplace?
As communication and transportation have become widely available and less expensive,
the ability to take advantage of a larger, worldwide market has increased. Companies that
In addition to these basic issues, students may mention various events, such as the
2. According to Hofstede (Table 15.2 in the text), the United States is low on power
distance, high on individuality, high on masculinity, low on uncertainty avoidance, and
low on long-term orientation. Russia, on the other hand, is high on power distance,
moderate on individuality, low on masculinity, high on uncertainty avoidance, and low on
long-term orientation. Many American managers are transplanting their own HRM
practices into Russia while companies seek to develop operations there. How
acceptable/effective do you think the following practices will be and why? (a) extensive
assessments of individual abilities for selection, (b) individually based appraisal systems,
(c) suggestion systems, (d) self-managing work teams.
Students may comment on any of the related cultural dimensions relative to these HRM
practices.
Examples are given below:
(a) Selection Assessments: Many Russians may find the emphasis on
individual skills and selection a change from government provided jobs,
(b) Individually Based Appraisal Systems: Again, once the newness of this
(c) and (d) Suggestion systems and self-managed work teams may have more
difficulty in achieving effectiveness. The high-power distance more than
3. The chapter notes that political/legal and economic systems can reflect a country’s
culture. The former Eastern Bloc countries seem to be changing their political/legal and
economic systems. Is this change brought on by their cultures, or will culture have an
impact on the ability to change these systems? Why?
Students may express many different opinions on this question. However, it seems fairly
clear that economic underdevelopment and a scarcity of products and employment
4. Think of the different levels of global participation. What companies that you are familiar
with exhibit the different levels of participation?
Again, students should have a large number of possible examples here. Nike makes
5. Think of a time when you had to function in another culture (e.g., on vacation, at your
job, etc.). What were the major obstacles you faced, and how did you deal with them?
Was this a stressful experience? Why? How can companies help expatriate employees
deal with the stress?
Various answers students might suggest include problems of not being understood in a
foreign language, inability to get needed information, and a feeling of being isolated by
In general, these difficulties are stressful, depending on the individual’s attitudes. If a
Companies can help expatriates deal with this type of stress by providing intensive
6. What types of skills do you need to be able to manage in today’s global marketplace?
Where do you expect to get those skills? What classes/experiences will you need?
Any new experiences that build on our abilities to adjust and be flexible help in
Foreign language training can be obtained in high school and college, as well as in
Self-Assessment Exercise
Refer to the self-assessment exercise in the text.
Exercising Strategy:
Terrorism and Global Human Resource Management
This case discusses the new issues companies face when expanding globally such as terrorism.
The issue here is not only the potential for hostile situations for expatriate workers, but also the
divergent perceptions across the globe about terrorism and the U.S.’s recent military responses to
acts of terrorism.
Questions
1. How can a global company manage the inevitable conflicts that will arise among
individuals from different religious, racial, ethnic, and national groups who must work
together within firms? How can these conflicts be overcome to create a productive work
environment?
Answers will vary, but may include that global companies need HRM systems that
The companies also need to have an on-going cultural training to make all employees
2. What will firms have to do differently in managing expatriates, particularly U.S. or
British citizens who are asked to take assignments in predominatly Muslims countries?
Students will have different responses, but may include that firms could offer paid
Managing People
The Toyota Way to No. 1
This vignette is an overview of responses to a discussion with Toyota’s top U.S. executive
concerning how Toyota recently surpassed General Motors in worldwide sales globally.
Questions
1. As you look at how Toyota has surpassed GM and the other U.S. automakers, in what
ways do you think its workforce has provided a competitive advantage?
Student answers will vary. The Toyota Way is about constant improvement. Toyota pulls
2. What do you think are the major HR issues that Toyota will face in the future?
Student answers may vary. Toyota has always been the chaser, not being chased. Will
HR in Small Business:
Is Translating a Global Business?
This vignette discusses the recent increase in attention to translation services that runs concurrent
with increases in global expansion.
Questions
1. What kinds of challenges would be involved in recruiting and selecting people to
translate documents from Spanish, Polish, and French into English?
Student answers will vary. One big issue here that should be touched on would be the
skill level of potential new hires. While often the translation services may be for routine
2. Would those challenges be easier to meet by recruiting within the United States or by looking
for talent overseas? Explain.
Students will likely have differing views here as well. While some students may argue
3. Suppose a small translation business asked you to advise the company on how to
overcome cultural barriers among a staff drawn from three countries. Suggest a few ways
the company could use training and performance management to achieve this goal.