978-1259317224 Chapter 14 Part 2

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International Business

Geringer, McNett, Minor, Ball

Instructor Guide to Module 14

a. Career implications significant to both expat and spouse

b. Dissatisfied spouse may affect expat performance, marriage, etc.

c. IHRM addressing spousal issues more closely

3. Challenges for Expatriate Children

a. Expatriate children may suffer the most

b. Children have challenges as well as benefits

c. Children sometimes referred to as third-culture kids (TCKs)

d. Preparation for the Transition: Language Training

1. English is lingua franca of the world

2. Goal is to establish goodwill and show interest in host country

3. Fluency not needed, but day–to-day communication helpful

C. Expatriate Services: banking, tax, family-assistance programs

D. Repatriation – The Shock of Returning Home

1. Often re-entry and feeling a part of home office is difficult

2. IHRM needs to offer career counseling and reorientation

LO 14-6

Describe some of the complications of compensation

packages for expatriate executives

• Compensation for international assignments

o salaries

o allowances

o housing allowances

o cost-of-living allowances

o allowances for tax differentials

o education allowances

o moving and orientation allowances

• bonuses

o overseas premiums

o contract termination payments

o home leave

• compensation packages can be complicated

o what percentage of the base salary?

o What exchange rate?

• Compensation of third-country nationals

• International status

• Perks

• What’s important to you?

Key Terms:

• allowances

• bonuses

• compensation

packages

• international

status

Lecture Outline and Notes:

I. Compensation for international assignments

International Business

Geringer, McNett, Minor, Ball

Instructor Guide to Module 14

A. Expatriate compensation programs must be managed proactively to keep them fair and

attractive and able to attract the quantity and quality of potential expats needed by the

1. Traditional method for American ICs is balance sheet approach, with base salary

equal to domestic counterpart, supplemented by allowances and bonuses

2. Can be complex and expensive to administer, especial for IC in broad range of

nations and regions (Table 14. 2)

3. Some ICs attempt to localize workforce or phase out expat package over time

4. Some ICs provide a lump-sum approach, with a home-country-based salary plus

addition that can be allocated on individual preference basis

B. B. Salaries

1. usually standard for each level of the management hierarchy throughout the IC.

2. If in a nation with high tax on personal income, common to pay lower salary but

provide expensive perks

C. Allowances

1. payments to compensate expatriates for extra costs of living abroad, such as:

a. Housing Allowances

b. Cost-of–living Allowances (Table 14.3)

c. Allowances for Tax Differentials

d. Education Allowances

e. Moving and Orientation Allowances

D. Bonuses (or premiums)

1. paid in recognition that expatriates and their families undergo hardships and

inconveniences and make sacrifices living abroad. They include:

a. Overseas Premiums (Table 14.4)

b. Contract Termination Payments

c. Home Leave

E. Compensation Packages Can Be Complicated

1. What Percentage of the base salary?

a. What to pay in host country currency?

b. Home country currency?

c. Other country currency?

2. What Exchange Rate?

a. Inflation and exchange rates change

b. Differ from country to country

International Business

Geringer, McNett, Minor, Ball

Instructor Guide to Module 14

F. Compensation of Third-Country Nationals

1. Trend is to treat them the same as HCN expats

G. International Status

1. Given to the top people whom the IC wants to retain.

H. Perks

1. Given to a manager with international status

2. much variety on what it may include

I. What’s important to you?

1. Relative priority of different items is influenced by personal and family

considerations

International Business

Geringer, McNett, Minor, Ball

Instructor Guide to Module 14

CONNECT TOOLS FOR CLASS PREPARATION

SmartBook

What is SmartBook?

SmartBook is a digital version of your course textbook. It contains the same content within the

textbook, but unlike a typical eBook, SmartBook actively tailors that content to your individual

needs as a student. SmartBook can be accessed online through your laptop, tablet or

smartphone and is also accessible when you’re offline!

How Does SmartBook Help You/Students?

• Assignable – assigning students their reading and studying their textbook content

ensures they are coming to class prepared.

• Proven to help students get a better grade. Studies show SmartBook technology can help

increase grades by a full letter.

• Save time. Study smarter. SmartBook makes sure students focus on the things you don’t

know so they can prioritize your study time wisely.

• No more cramming. SmartBook helps learners retain key concepts so you can learn—not

memorize.

• Accessible on the go. Use SmartBook on your laptop, tablet or smartphone–online or

offline–via your browser or mobile app.

• Results in real time. Track student progress–and prevents them from wait for midterms

or finals. Know how well you understand the material now.

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

• On the Connect course homepage click “add assignment” > LearnSmart > Select the

chapter

• Decide what content you’d like your students to study, and how much time you’d like

students to spend on their work. Start by narrowing down the content prior adjusting the

slider bar. – Many instructors find it useful to limit the assignment to a maximum of 45

minutes.

• Assign points to the assignment. Instructors have found that if they give the

LearnSmart/SmartBook assignment a minimum of 10% of the course grade that students

are more likely to complete the assignment.

• The entire LearnSmart/SmartBook module is available to your student at all times,

however, assigning it will prompt students to try it. You are required to select a due date

for this assignment, however, this will not prevent the student from access to the tool; it

is designed to show you that the student has taken the LearnSmart/SmartBook

International Business

Geringer, McNett, Minor, Ball

Instructor Guide to Module 14

assignment. LearnSmart/ SmartBook is an adaptive study tool designed for students. It

can also show you where students are struggling to understand specific concepts.

• The student’s LearnSmart/SmartBook score in the Connect reports is based on their

mastery of the material at the time the assignment is due. Mastery is an evaluation of

the number of learning objectives they completed via performance on answering

questions.

• Students may, and are encouraged, to continue to use LearnSmart/SmartBook

throughout the semester. After the assignment due date, they can continue to access

this tool. Continued use of LearnSmart will not affect their LearnSmart/SmartBook

assignment results in the Connect reports, but has shown to improve test scores by as

much as a full letter grade.

International Business

Geringer, McNett, Minor, Ball

Instructor Guide to Module 14

ENGAGEMENT & APPLICATION (FACE TO FACE & ONLINE & HYBRID)

BOXED TEXT DISCUSSION QUESTIONS WITH SUGGESTED ANSWERS

IB IN PRACTICE: Executives with a Global Skill Set Are in Big Demand

The focus of this IB in Practice explores “Executives with a Global Skill Set Are in Big Demand.”

The importance of finding executives with a global skill set is particularly critical in developing

economies and examples from Latin America and China are presented. Some of the challenging

differences between a domestic and a foreign, emerging market context are identified. It is

relatively easy to stimulate discussion of this topic in a classroom context, particularly if the

discussion is initiated through probing questions such as those listed in the IB in Practice box.

Online and Hybrid: Assign questions to be prepared in virtual teams and submitted as a

team assignment, or submitted individually and then discussed in a blog or group discussion site.

Face-to–Face: Students develop responses to the questions in class in teams/groups

1. What kinds of skills or experience are needed in order to succeed in a foreign

assignment?

2. How might a company go about assessing whether or not a candidate has the proper

GLOBAL DEBATE: Why Aren’t More Women Selected for International Assignments?

The focus of this Global Debate explores “Why Aren’t More Women Selected for International

Assignments?” The question alone will present controversy in your class, as women will

answer with a resounding and emphatic, “YES!” Once past that, the question serves well as a

starting point for a stimulating class discussion on such topics as:

International Business

Geringer, McNett, Minor, Ball

Instructor Guide to Module 14

• Is there a glass ceiling for women in IB management?

• What education and training do women need in order to be strong candidates for

global assignments?

• What personal characteristics do women need to be successful in global

assignments?

• Do women on international assignments need different support than men?

• Are women in your class interested in an IB career? Why and/or why not?

Online and Hybrid: A classroom discussion option is to assign individuals, groups, or the

class as a whole to examine the issue of gender in selecting personnel for international

assignments. The students’ findings can provide a strong basis for discussion or debate on these

emerging issues. Virtual teams can be assigned questions and submit their work as a group.

Alternatively, virtual teams can be assigned to take different roles or perspectives to argue for

(or against) and these assignments can be submitted as a group and then opened up to

discussion and debate on an online class discussion site or blog, or presented and debated in a

Face-to-Face setting.

Face-to–Face: Students develop responses to the questions in class in teams/groups, or

else assign perspectives and conduct an in-class debate and discussion.

1. Should ICs select more women for expatriate assignments? Why or why not?

2. Are there circumstances in which you believe female expatriates should be most

strongly considered, or in which they should not be considered at all? Why?

International Business

Geringer, McNett, Minor, Ball

Instructor Guide to Module 14

3. How can companies help ensure that more high-potential women are encouraged to pursue

international assignments, and that their expat experiences will be supported and leveraged

effectively?

GET THAT JOB! FROM BACKPACK TO BRIEFCASE Laura Gunderson

The focus of this Get that Job! From Backpack to Briefcase box explores Laura Gunderson’s

experiences in preparing for and entering a career in international human resource

management. Her interest in international issues was sparked by her own international

upbringing, which included a broad variety of living and travel experiences. These experiences

clarified the challenges of doing business internationally, and piqued her interest in human

resource management aspects of international business. She discusses her experiences going to

work immediately after graduation in the international human resources group of a Fortune 100

company, providing an insightful overview for students interested in careers in this area. She

provides several salient recommendations for how students might better prepare themselves for

finding and exploiting opportunities in IHRM.

Online and Hybrid: Virtual teams evaluate Gunderson’s advice for their own career

development and their ability to understand the challenges for effective IHRM. Share

conclusions with the class, either online or in a Face-to-Face setting.

Face-to–Face: Students evaluate their own career strategy in light of Gunderson’s advice,

both in terms of careers in IHRM as well as careers where IHRM professionals will have an

important role in the students’ personal and professional performance.

1. How would you evaluate the list of challenges that Gunderson identifies regarding IHRM

support for business success, such as relocation, talent management, recruitment, employee

development, compensation, labor relations, and information systems? Which of these do you

think are most important and why? Which ones might become even more important in coming

International Business

Geringer, McNett, Minor, Ball

Instructor Guide to Module 14

2. Gunderson emphasizes the importance of being prepared, search widely for positions,

expand one’s network, communicate interest, and volunteer for new challenges. Do you agree

with these recommendations? Why or why not? How can you incorporate them within your

END OF MODULE EXERCISES

CRITICAL THINKING QUESTIONS

1. What are the implications for international companies of trends toward aging

populations in many developed countries and rapid urbanization in many emerging nations?

What changes are ICs likely to make to successfully respond to these trends? 

International Business

Geringer, McNett, Minor, Ball

Instructor Guide to Module 14

2. Explain arguments against allowing immigrant labor into nations. Who would benefit

most from limiting the number of immigrants into a country? What are the primary

arguments associated with allowing immigrant labor into a nation? 

3. Why might brain drain be beneficial for a country whose skilled people move to other

nations? How might a country maximize the benefits from brain drain, while reducing the

potential damage from this mobility of labor? 