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International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 14
1 Instructor’s Manual – Module 14 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
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
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 14
2 Instructor’s Manual – Module 14 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
CONNECT TOOLS FOR ASSESSEM ENT OF LEARNING
Interactive Applications
Assigning Interactives
Time-Saving Hints:
Connect Content Matrix
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 14
3 Instructor’s Manual – Module 14 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
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
4 Instructor’s Manual – Module 14 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
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.
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Geringer, McNett, Minor, Ball
Instructor Guide to Module 14
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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
Geringer, McNett, Minor, Ball
Instructor Guide to Module 14
6 Instructor’s Manual – Module 14 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
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
Geringer, McNett, Minor, Ball
Instructor Guide to Module 14
7 Instructor’s Manual – Module 14 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
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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Geringer, McNett, Minor, Ball
Instructor Guide to Module 14
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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
9 Instructor’s Manual – Module 14 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
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
International Business
Geringer, McNett, Minor, Ball
Instructor Guide to Module 14
10 Instructor’s Manual – Module 14 | Geringer, McNett, Minor, Ball © 2016 by McGraw-Hill Education.
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
