978-1259317224 Chapter 14 Part 1

International Business

Geringer, McNett, Minor, Ball

Instructor Guide to Module 14

Module 14: Managing Human Resources in an

International Context

Use this Instructor Guide to incorporate the unique content of this product and facilitate your

Face-to-Face, Online, and Hybrid classes. This guide has been designed to be interactive and links

have been created within each title in the Table of Contents to guide you to each section. You

can also link back to the main page by clicking at the button at the bottom of each page.

Here is the Table of Contents highlighting what you’ll be able to find to support you in teaching

this module:

YOUR CONTENT

Summary

Learning Objectives

Key Terms & Key Terms with Definitions

Content Outline

CONNECT TOOLS FOR CLASS PREPARATION

SmartBook

What is SmartBook?

How Does SmartBook Help You/Students?

How to assign SmartBook to ensure students come to class prepared?

ENGAGEMENT & APPLICAT ION (FACE TO FACE & ONLINE & HYBRID)

BOXED TEXT DISCUSSION QUESTIONS WITH SUGGESTED ANSWERS

IB IN PRACTICE

GLOBAL DEBATE

GET THAT JOB! FROM BACKPACK TO BRIEFCASE

Critical Thinking Questions

Global Edge Research Task

MiniCase

Bonus Activities

Video Suggestions

Team Exercises

Supplemental Lecture

Tools & Tricks

Controversial Issues

Teaching Suggestions

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Instructor Guide to Module 14

CONNECT TOOLS FOR ASSESSEM ENT OF LEARNING

Interactive Applications

Assigning Interactives

Time-Saving Hints:

Connect Content Matrix

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Geringer, McNett, Minor, Ball

Instructor Guide to Module 14

YOUR CONTENT

SUMMARY

This module examines how human resource management and worldwide labor conditions

impact businesses operating in the international environment. Effective managers for

international companies are in high demand but short supply. One expert on China says sending

someone to China with Chinese language capability but without “Chinese values” can be worse

than sending a Westerner without those values.

International companies without effective human resource policies will find themselves failing to

execute in the international marketplace. Complicating issues that human resource managers

face is the trailing spouse who may also have a career and a family whose members are leaving

their friends. Compensation, support, and repatriation are among the expatriate issues

addressed in international human resource management (IHRM).

LEARNING OBJECTIVES

LO 14-1 Identify several of the major factors that may affect the quantity and quality of

labor in a nation.

LO 14-2 Explain the relationship between competitive strategies (international,

multidomestic, global, and transnational) and international human resource

management approaches (ethnocentric, polycentric, regiocentric, and global).

LO 14-3 Compare recruitment and selection considerations for home-country, host-

country, and third-country nationals as international company executives.

LO 14-4 Distinguish among the training and development considerations for home-

country, host-country, and third-country nationals as international company

executives.

LO 14-5 Identify some of the challenges and opportunities of an expat position.

LO 14-6 Describe some of the complications of compensation packages for expatriate

executives.

KEY TERMS AND DEFINITIONS

Allowances (p. 377)

Employee compensation payments added to base salaries of

expatriates because of higher expenses encountered when

living abroad.

Bonuses (p. 379)

Expatriate employee compensation payments in addition to

base salaries and allowances because of hardship,

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Geringer, McNett, Minor, Ball

Instructor Guide to Module 14

inconvenience, or danger.

Brain drain (p. 361)

The loss by a country of its most intelligent and best-educated

people.

Collective bargaining (p. 361)

The process in which a union represents the interests of

workers bargaining in negotiations with management.

Compensation packages (p.

381)

For expatriate employees, packages that can incorporate many

types of payments or reimbursements and must take into

consideration exchange rates and inflation.

Culture shock (p. 371)

The anxiety people often experience when they move from a

culture that they are familiar with to one that is entirely

different.

Ethnocentric policy (p. 363)

A policy of hiring and promoting based on the parent

company’s home-country frame of reference.

Expatriate (p. 355)

A person living outside his or her country of citizenship.

Geocentric policy (p. 363)

A policy of hiring and promoting based on ability and

experience without considering race or citizenship.

Guest worker (p. 360)

Person who goes to a foreign country legally to perform certain

types of jobs, on a temporary basis.

Home-country national (p.

363)

Same as parent company national.

Host-country national (HCN)

(p. 356)

Employee who is a citizen of the nation in which the subsidiary

is operating, which is different from the parent company’s

home nation.

International status (p. 382)

Entitles the expatriate employee to all the allowances and

bonuses applicable to the place of residence and employment.

Labor market (p. 356)

The pool of available potential employees with the necessary

skills within commuting distance from an employer.

Labor mobility (p. 358)

The movement of people from country to country or area to

area seeking jobs.

International Business

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Instructor Guide to Module 14

Labor union (p. 361)

An organization of workers, formed to advance the interest of

its members.

Parent-country national (PCN)

(p. 356)

Employee who is a citizen of the nation in which the parent

company is headquartered; also called home-country national.

Polycentric policy (p. 363)

A policy of hiring and promoting based on the specific local

context in which the subsidiary operates.

Regiocentric policy (p. 363)

A policy of hiring and promoting based on the specific regional

context in which the subsidiary operates.

Reverse brain drain (p. 361)

The return home of highly skilled immigrants who have made a

contribution in their adopted country.

Third-country national (TCN)

(p. 363)

Employee who is a citizen of neither the parent company

nation nor the host country.

CONTENT OUTLINE

The following section provides the flow of information using the LEARNING OBJECTIVES as a

guide, KEY TERMS learners will need to take away from the course and a notation of when to use

POWERPOINT SLIDES with LECTURE NOTES to drive home teaching points.

LO 14-1

Identify several of the major factors that may affect the

quantity and quality of labor in a nation

• Introduction

• Overall size of the workforce

• Aging of populations

• Urbanization of workforce

• Immigrant labor

• Guest workers

• Brain drain

• Labor unions

Key Terms:

• Labor market

• Labor mobility

• Guest worker

• Brain drain

• Reverse brain drain

• Labor union

• Collective bargaining

Lecture Outline and Notes:

I. Introduction

A. Worldwide Labor Conditions

1. Overall size of the workforce

a. Populations in developing nations tend to be growing and becoming younger

International Business

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Instructor Guide to Module 14

b. Over one-third of the world’s 15– to 24-year-olds live in India and China

c. Populations in many developed nations are projected to decline due to low

birthrates and low levels of immigration

2. Aging of populations

a. An aging population is a trend affecting the workforce of many nations

b. Aging of populations is more pronounced for the developed countries (Figure

14.1)

c. An aging population has implications for labor force size and skill; policies

regarding immigration; economic growth; and a range of political issues

3. Urbanization of workforce

4. The population and labor force worldwide have been shifting dramatically from rural to

urban

a. More than half of the world’s population now lives in urban areas (Figure 14.2)

b. Urbanization is higher in developed countries

c. The rate of urbanization has been nearly 6 times faster in developing countries,

from 1975 to 2014

d. Urbanization often creates a pool of low-cost, low-skill workers

5. Immigrant labor

a. Labor mobility is the movement of people from country to country or area to

area to get jobs

b. People often move to secure better economic situations (Figure 14.3)

c. 60% of the world’s migrants live in developed countries

d. The U.S. has 5% of the world’s population but 20% of the world’s migrants

e. Migrant labor ranges from highly skilled jobs to lower-skilled positions in

agriculture, cleaning, and domestic service

f. Immigration may result in depressed wages for a nation’s workers

6. Guest workers

a. Countries with low birthrates may encounter labor shortages

b. Guest workers perform certain types of jobs, usually in service, factory, or

construction work

c. When economies slow, fewer workers are needed, unemployment increases

among the nation’s citizens, and guest workers are either not renewed or are

deported

7. Brain drain

a. Brain drain is the loss by a country of its most intelligent and best-educated

people

b. It is a serious problem for developing countries (Figure 14.4)

c. Reverse brain drain is the return home of highly skilled immigrants who have

International Business

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Instructor Guide to Module 14

made a contribution in their adopted country

d. New economic opportunities in their home countries, as well as political barriers

and challenges in host developed nations, have encouraged reverse brain drain

8. Labor unions

a. labor unionization varies significantly across nations (Figure 14.5)

b. Union activity in the U.S. and Europe tends to be adversarial with management,

while in Japan the unions tend to identify strongly with the interests of the

company

c. There is a trend of declining numbers of union members in most developed

nations, especially within industrial sectors

d. International developments such as offshoring of production activities have

been perceived as a threat by some national unions, promoting some

multinational labor activity

LO 14-2

Explain the relationship between competitive strategies

(international, multidomestic, global, and transnational) and

international human resource management approaches

(ethnocentric, polycentric, regiocentric, and global)

A. The strategic approach to international human

resource management

Key Terms:

• Ethnocentric policy

• Polycentric policy

• Regiocentric policy

• Geocentric policy

• Home-country national

• Parent-country national

(PCN)

• Host-country national (HCN)

• Third-country national (TCN)

Lecture Outline and Notes:

I. The strategic approach to international human resource management

A. Companies confront two competing forces – pressure to achieve global integration and

reduce costs, and pressure to respond to local differentiation – that determine which of

four alternative competitive strategies a firm should adopt (home replication,

multidomestic, global, transnational)

B. A company’s competitive strategy should drive the organization’s approach to

international human resource management (IHRM).

C. Heenan & Perlmutter developed a model linking competitive strategy with an

organization’s IHRM approach

1. Hiring approach: ethnocentric, polycentric, regiocentric, or geocentric

2. Employee classifications: home-country national or parent-country national (PCN);

host-country national (HCN), or third-country national (TCN)

3. Relationships are illustrated in (Table 14.1)

LO 14-3

Compare recruitment and selection considerations for

home-country, host-country, and third-country nationals

Key Terms:

•

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Instructor Guide to Module 14

as international company executives

• recruitment and selection of employees

• ethnocentric staffing policy

• polycentric staffing policy

• regiocentric staffing policy

• geocentric staffing policy

Lecture Outline and Notes:

II. Recruitment and selection of employees

A. Ethnocentric staffing policy.

1. Companies with primarily international strategic orientation use home-country

citizens (PCNs) for key posts.

2. Decisions made at HQ, using home country’s frame of reference

3. PCNs usually not knowledgeable about host-country culture and language, but

experience abroad gives a worldwide perspective and prepares them for becoming

high-level managers at headquarters

4. Can be expensive to staff with PCNs

B. Polycentric staffing policy

1. Companies with primary multidomestic strategy orientation use host-country

nationals (HCNs) in subsidiaries and PCNs at HQ

2. Human resource policies created at local level for specific context of the local

operations

3. HCNs have no problem with unfamiliarity of local customs, culture, and language

and costs are usually lower than PCNs

4. HCNs may need considerable training to understand the IC and its way of doing

things, and may cause HCNs to act in ways that surprise or displease HQ

5. Many of the best HCNs get hired away due to a shortage of talented, experienced

personnel

6. Can be a conflict of loyalty by HCN between host country and IC

C. Regiocentric staffing policy

1. Companies with primary regional strategy orientation use regional-area nationals

for subsidiary staffing, meaning a mix of HCNs and third-country nationals (TCNs)

2. Should not count on cost savings when using TCNs

D. Geocentric staffing policy

1. Companies with primary transnational strategy orientation staff globally, using

worldwide staffing pools

2. HRM strategy tends to be consistent across all subsidiaries

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Geringer, McNett, Minor, Ball

Instructor Guide to Module 14

3. Employees with the strongest set of skills tend to be more difficult to hire and

retain, due to their value and relative scarcity of their skill sets

LO 14-4

Distinguish among the training and development

considerations for home-country, host-country, and

third-country nationals as international company

executives

• Training and development of employees

o Home- or Parent-country national

o Host-country national

• HCNs hired in the home

country

• HCNs hired in the host country

o Third-country national

Key Terms:

Lecture Outline and Notes:

I. Training and development of employees

A. Home- or parent-country national (PCN)

1. Due to the difficulty of an overseas assignment, few recent college graduates are

hired for an overseas assignment.

2. New hires need time to adjust to the workplace and learn the business.

3. Preparation for international assignment includes language training and special

assignments to overseas locations.

4. Overseas assignments are difficult for families

B. Host-country national (HCN)

a. The same criteria for selecting PCNs apply to HCNs

b. HCNs hired in the home country

i. having studies in the parent company’s country may help

ii. sent to IC HQ to be indoctrinated in firm’s policies and procedures

iii. may become distanced from developments and relationships in host country

while in home country

c. HCNs hired in the host country

i. May set up in-house training programs in host-country subsidiary

ii. May use business courses in host-country universities

iii. May send to home-country business schools or training programs

iv. May be sent repeatedly to parent-company HQ, divisions, other subsidiaries to

gain skills and network

C. Third-country national (TCN)

1. May be advantageous in terms of costs, culture knowledge

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Instructor Guide to Module 14

2. Host-Country Attitudes: Some host country governments may prefer hiring of

their citizens

3. Prevalent in developing countries due to lack of skilled employees

4. Generalizations about TCNs are Difficult

a. Wide range of multi-country experience

b. Various routes to professional TCN status

5. As ICs take a geocentric view to staffing, likely to see greater use of TCNs

LO 14-5

Identify some of the challenges and opportunities of an

expat position

• Expatriates

• The Expatriate’s family

o Trailing spouses in two-career families

o Challenges for expatriate children

• Preparation for the transition: Language training

• Expatriate services

• Repatriation—The shock of returning home

Key Terms:

• Culture shock

•

Lecture Outline and Notes:

I. Expatriates

A. Different types of expats:

1. HCN hires are sometimes called inpatriates

2. HCNs or TCNs given short-term assignment abroad are called flexpatriates

3. Expatriates being sent to broader range of countries than ever before, and average

age is declining and higher proportion are women

4. Expats can bring scarce technical or managerial skills to host country

5. Expat experience helps employee develop skills for promotion to leadership

positions of greater scope and responsibility

6. Costs of expatriates are substantial and failure rates are high

7. Culture shock affects ALL expatriates regardless of international experience

a. 3 dimensions: work context, general environment, interactions with local

nationals

8. to enhance expat performance, ICs should consider what support is provided pre–

assignment and during assignment

9. Reverse culture shock happens when expat returns home

B. The Expatriate’s Family

1. as many as 90% of expatriate failures are family related, particularly difficult for

spouses

2. Trailing Spouses in Two-Career Families