978-1473758438 Chapter 16

subject Type Homework Help
subject Pages 9
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subject Authors Klaus Meyer, Mike Peng

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Instructor Manual
Chapter 16: People in the MNE
(Prepared by Klaus E. Meyer, March 2019)
Introduction to the Topic
Learning Objectives
1. Distinguish ethnocentric, polycentric and geocentric management practices
2. Explain how MNEs manage expatriates
3. Explain how MNEs manage their employees in subsidiaries abroad
4. Discuss how the institution-based views shed additional light on HRM
5. Discuss how the resource-based views shed additional light on HRM
6. Participate in two leading debates concerning people in the MNE
7. Draw implications for action
General Teaching Suggestions
This chapter is about human resource management from the perspective of both the company
and of potential expatriates (a role that many students in your class may aspire to).
To launch your discussion of this chapter, you could ask a student who has lived abroad (or
originates from another country) to describe life in the country and what a person should
know about its culture and other aspects of its environment before leaving this country so as
to survive and be successful. On this basis, ask them whom they would select for an expat
job in that country, what would they look for in determining whether that person would be
ideal?
Opening Case Discussion Guide
The opening case describes human resource challenges faced by EADS, a company with a
mixed French-German-Spanish ownership and workforce. The case outlines some of the
challenges identified by two scholars who interviewed French and German employees in the
company. To stimulate a discussion, you may ask, “what would it be like to work in a team
of French/Germans?” and after gathering some ideas, you might ask, “do you think you could
lead a French/German team?” If you are an expat, you will need to lead people who are
different than your mates back home!
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Chapter Outline, Section by Section
Section 1: Approaches to Managing People
Key Ideas
This short section introduces the traditional distinction based on Perlmutter of ethnocentric,
polycentric and geocentric management, and relates these concepts to the provenance of
nationals from different countries in subsidiaries’ top management team.
Key Concepts
human resource management (HRM)
Activities that attract, select, and manage employees.
ethnocentric approach
An emphasis on the norms and practices of the parent company (and the parent country of the MNE)
by relying on PCNs.
expatriate (expat)
A non-native employee who works in a foreign country.
parent (home) country national (PCN)
An employee who comes from the parent country of the MNE and works at its local subsidiary.
host country national (HCN)
An individual from the host country who works for an MNE.
polycentric approach
An emphasis on the norms and practices of the host country.
geocentric approach
A focus on finding the most suitable managers, who can be PCNs, HCNs, or TCNs.
third country national (TCN)
An employee who comes from neither the parent country nor the host country.
global talent management
The attraction, selection, development and retention of talented employees in the most strategic roles
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within an MNE
global talent pool
Employees that are systematically prepared to assume leadership.
Section 2: Expatriates
Key Ideas
Expatriates play an important role in multinational enterprises, and many students may have
the ambition to work as an expatriate either because they are attracted by the financial
perks, or because they love the engagement with foreign cultures.
Teaching this subject is often a great joy because students (at least the ones I meet in my own
class) can engage with the subject on a very personal level. Exchange students may be going
through the culture shock experience as they are taking this class, while other students can
relate their own experiences, or learn to better understand their foreign classmates. Building
on this personal experience, usually generates very attentive and engaged course participants.
This section has been substantially revised in the second edition, notably by including a
discussion of expatriate spouses (In Focus 16.1), of the culture shock phenomenon (p. p. 459-
461), and returnee expatriate experiences.
Key Concepts
training
The specific preparation to do a particular job.
full immersion training
Intensive exposure to a foreign culture and language by living within that culture.
culture shock
An expatriate’s reaction to a new, unpredictable, and therefore uncertain environment
expatriate stress
stress caused by an imbalance between expectations and abilities affected by culture shock
returnee
Returning expatriate.
repatriation
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For use with Peng and Meyer, International Business 3e, 9781473758438, © Cengage Learning
EMEA 2019
The process of facilitating the return of expatriates.
psychological contract
An informal understanding of expected delivery of benefits in the future for current services.
reverse culture shock
Culture shock experience by persons returning to their country of origin
Section 3: Managing People Abroad
Key Ideas
This section takes the perspective of the MNE and its management of local employees around
the world. It introduces some of the basic concepts that students are likely to encounter and
further deepen in an HR class.
Key Concepts
recruitment
The identification, selection and hiring of staff
headhunter company
A company specializing on finding suitable people for senior positions
compensation
The determination of salary and benefits.
migrant workers
Workers from rural areas temporarily working in factories in the cities.
performance appraisal
The evaluation of employee performance for promotion, retention, or termination purposes.
Section 4: Institutions and Human Resource Management
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This section discusses how formal and informal institutions in host countries influence the
HR practices that MNEs can implement, and how effective they are in achieving the desired
organizational outcomes.
Key Concepts
No new concepts
Section 5: People as Resources
Key Ideas
This section briefly discusses how HR management contributes to the development and
exploitation of broader categories of resources and capabilities.
Key Concepts
No new concepts
Section 6: Debates and Extensions
Key Ideas
The first debate concerns multi-cultural teams, which are an important reality not only in
MNEs, but in many business classrooms around the world.
The second debate focuses on non-traditional assignments that would take employees to
workplaces outside their own country, yet without the traditional commitment to stay at that
place for three to five years.
Key Concepts
multi-cultural teams
A work team with members representing multiple cultures
contract work
A short assignment for a specific project or contract
commuter assignment
Assignments that involve regular stays abroad but with the main base remaining back home
virtual teams
Teams that are geographically dispersed and interact primarily through electronic communication
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inpatriation
Relocating employees of a foreign subsidiary to the MNE’s headquarters for the purposes of (1) filling
skill shortages at headquarters and (2) developing a global mindset for such inpatriates.
Section 7: Implications for Practice
Key Ideas
This concluding section draws on Susan Meisinger’s work to summarize the challenges for
both HR managers, and for individual employees seeking a career in an internationally
oriented company (Table 16.5). HR managers need to have the four Cs: being curious,
competent, courageous, and caring about people. Non-HR managers need to proactively
develop an international career mind-set.
Key Concepts
No new concepts.
Review Questions
Review questions are provided to students on the website accompanying the book. They
directly ask to summarize the material provided in the text. Instructors may also use the
questions to structure their lectures or review sessions.
Review Questions
(as provided to students on the website)
Material in the Book
1. What are the three main approaches to managing
people in multinational enterprises?
2. Why do many MNEs consider global talent
management an important part of their long-term
strategy?
3. What is the role of expatriates in MNE
subsidiaries?
4. How do MNEs select individuals for expatriate
assignments?
5. How should MNEs prepare expatriates for their
assignments?
Page 447-478
Page 449
Page 449-450
Page 450-452
Page 452
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6. What is culture shock and how can expatriates (and
exchange students) manage it?
7. What challenges do expatriates face when returning
to their country of origin?
8. How does an expatriate experience contribute or
not to an individual’s career development?
9. What are the key challenges for MNEs in
managing their local workforces?
10. How do formal and informal institutions shape
human resource management practices in
subsidiaries abroad?
11. How do human resources contribute to an
organization’s resource and capability profile?
12. What challenges arise when working in
multicultural team, and how can team members
best handle a multicultural context?
13. How effective are non-traditional international
assignments in substituting for the use of
expatriates?
14. What challenges arise for MNEs when assigning
human resource manager?
Page 453-454, incl Fig. 16.3
& 16.4, Table 16.2
Page 456-457 incl Table 16.3
Page 456-460
Page 458-460
Page 460-462
Page 462-463
Page 463
Page 464
Page 464-465
Critical Discussion Questions
At the end the chapter, we provide discussion questions that aim to stimulate students
thinking beyond memorizing the material learned in the chapter. They are designed to be
used at a basis for in-class discussions, group work, or individual assignments. Below,
provide some indicative answers of issues that may be raised in response to these questions.
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Discussion Questions
(as provided in the book)
Indicative Responses
1. You have been offered a
reasonably lucrative
opportunity for an expatriate
assignment for the next three
years, and your boss will have
a meeting with you next
go to work in Iraq. However,
you are personally concerned
about their safety there. How
engineers has been poached
by one of your competitors.
prevent further departures of
key people?
1. This is a question in which the answer is
not as important as the thought process and
the ability to clearly articulate. However,
students’ answers should probably include
such issues as preparation, support during
the assignment, support for the family,
benefits to attract such volunteers. To deal
with safety, firms that provide safety
training for contractors working in Iraq
may be hired to provide similar training for
3. Different answers are possible here. The
first step has to focus on clarifying the
through exit interviews, or discussion with
current and former employees. The
company may then want to change its
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a report on environmental
pollution in the Mekong river
delta in Southeast Asia.
Experts joining the team are
based in the Stockholm, Paris,
Singapore and Sydney offices
of your company. How are
you going to make this team
work effectively?
of belonging and focus on individuals
career development.
4. Different answers are possible here. My
own experience suggests that an initial
meeting involving all the key players (and
at least one person from each location)
should be present, and such a meeting
should best be conducted where
participants can get a first-hand impression
of the challenges they have to address, here
in the Mekong River Delta.
Closing Case
The closing case provides further opportunities to apply ideas and concepts learned in this
chapter in a real world setting. The Closing Case for this Chapter is “Dallas versus Delhi” and
focuses on remuneration packages for in-patriates. Below are some indicative responses to the
case discussion questions.
Case Discussion Questions
(as provided in the book)
Indicative Responses
1. Going from Dallas to New Delhi, Sarkar,
with his Indian passport, would be an
HCN. With his green card, he could also
be considered a US national and thus an
expatriate. Now if he goes from New
Delhi to Dallas, would he be an expatriate
These question concern decision of a
very personal nature, where personal
values play an important role. Thus,
different conclusions are likely.
However, essential here is for students
to demonstrate their ability to
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this move? Why?
4. Should Sarkar accept or decline this
opportunity? Why?
Further Learning Activities
In addition to the cases and discussion questions provided in the book, instructors may want
to use any of the following activities to further engage students with the material.
1. The Integrative Case ‘Just Another Move to China?’ has been written to discuss the
challenges faced by expatriates and their families as they cope with unfamiliar
environments, and have to make decisions over their international careers (Chapter
16). It also allows to further deepen the discussion on how and why differences in
formal and informal institutions (Chapters 2 and 3) matter for international business.
2. The Opening Case to Chapter 3 (Parties in Saudi Arabia and China) also provides a
very vivid illustration of the cross-cultural challenges of expatriate life (especially
project managers). If you have not discussed the case earlier, you may want to
introduce it now.
2. You work at a large MNE that operates in every one of the top 100 metropolitan areas
worldwide. One of the most pressing concerns in your firm at the moment is to control costs.
Therefore, you have been asked to develop a forecast for the coming year that identifies the
markets in which the firm can expect an increase in the cost of living and, as a result, general
salary expenditures. After the report needed for your evaluation is secured, classify the cities
that have experienced cost increases into their respective countries. Which countries have more
than one city that meets the criteria for your forecast? What are the salary increase traits
associated with each city identified?
One resource which can be used is “Mercer: Worldwide Cost of Living Survey”. This website can
be found by entering the search term “cost of living” at the globalEDGE™ Resource Desk search
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For use with Peng and Meyer, International Business 3e, 9781473758438, © Cengage Learning
EMEA 2019
3. Currently, your European company is evaluating its standing in the fast growing emerging
economies known as BRIC (Brazil, Russia, India, and China). Based on your evaluation of the
cost of living in each country, the company may reconfigure some of its operations to increase
profitability. Your company’s manufacturing facilities are located in Beijing, China; Mumbai,
India; Sao Paulo, Brazil; and St. Petersburg, Russia. How much could be saved if the company
consolidated into one BRIC location that has the lowest cost of living? One resource which can be
used is “United States: U.S. Department of State – Quarterly Reports for Living Costs Abroad”.
Further Readings
At the end the chapter, suggested further readings are provided. The primary aim is to
provide students a starting point for further work, for example when preparing a class
assignment or dissertation. These references also are recommended for instructors not
familiar with the topic and wishing to ‘get ahead of the students’ before lecturing on a topic.
N.J. Adler & A. Gundersen, 2008, International Dimensions of Organizational Behaviour, 5th ed.,
Cincinnati, OH: South-Western A very practically oriented textbook focusing on expats, international
teams, and careers.
N.A. Boyacigiller, R.A. Goodman & Phillips, eds, 2004, Crossing Cultures: Insights from Master Teachers,
London: Routledge a book with practical tips and class room exercises for hand-on learning on cross-
cultural management issues. P.J. Dowling, M. Festing & A.D. Engle, 2013, International Human
Resource Management, 6th ed., London: Cengage A textbook focused on international aspects of
human resource management.
For use with Peng and Meyer, International Business 3e, 9781473758438, © Cengage Learning
EMEA 2019
D. Collings, G. Wood, P. Caligiuri, eds, 2014, The Routledge Companion to International Human
Resource Management, Abingdon: Routledge. a collection of essays by leading scholars of the state of
the art of research in the field.
P.J. Dowling, M. Festing & A.D. Engle, 2017, International Human Resource Management, 7th ed.,
London: Cengage a textbook focused on international aspects of human resource management.
Y. McNulty & J. Selmer, 2016, Research Handbook on Expatriates, Cheltenham: Elgar review essays on
a rapidly emerging research topic.
G.K. Stahl, I. Björkman S. Morris, eds, 2012, Handbook of Research in International HRM, 2nd ed.,
Cheltenham: Elgar a collection of essays by leading scholars of the state of the art of research in the
field.
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