InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
Instructor Manual
Chapter 16: International Human Resource Management
to accompany Mike Peng & Klaus Meyer: International Business, Cengage Learning
Prepared by Klaus Meyer
version February 2011
Introduction to the Topic
Learning Objectives
1. distinguish ethnocentric, polycentric and geocentric management practices
3. explain how MNEs manage their employees in subsidiaries abroad
5. discuss how the resource-based views shed additional light on HRM
7. draw implications for action
General Teaching Suggestions
This chapter is about human resource management from the perspective of both the company
and of a potential expatriate (a role that many students in your class may aspire to).
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
InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
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.
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.
InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
Section 2: Managing 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.
Key Concepts
training
The specific preparation to do a particular job.
personal development
The longer term, broader preparation to improve managerial skills for a better career.
returnee
Returning expatriate.
repatriation
The process of facilitating the return of expatriates.
InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
Section 3: Managing People Abroad
Key Ideas
This section turns the attention to local employees in multinational enterprises, and
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
performance appraisal
The evaluation of employee performance for promotion, retention, or termination purposes.
Section 4: Institutions and Human Resource Management
Key Ideas
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
Section 5: Resources and Human Resource Management
InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
Key Ideas
This section briefly discusses how HR management contributes to the development and
Section 6: Debates and Extensions
Key Ideas
The first debate concerns the rise of 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
contract work
A short assignment for a specific project or contract
Section 7: Implications for Practice
Key Ideas
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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
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?
5. How should MNEs prepare expatriates for their
assignments?
6. What is culture shock and how can expatriates (and
exchange students) manage it?
7. What are the challenges faced by expatriates when
returning to their country of origin?
Page 490-91
Page 493-94
Page 494-497, incl Fig. 16.3
& 16.4, Table 16.2
Page 497-99 incl Table 16.3
InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
generally well educated urban workforce?
13. How effective are non-traditional international
assignments in substituting for the use of
expatriates?
14. What challenges arise for MNEs when assigning
individuals from abroad to work at corporate
headquarters?
Page 505-06
Page 606-07
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.
Discussion Questions
(as provided in the book)
Indicative Responses
1. You have been offered a
reasonably lucrative
1. This is a question in which the answer is not
as important as the thought process and the
InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
think pay should be equal
between HCNs and
expatriates in equivalent
3. As HR director for an oil
company, you are
responsible for selecting 15
expatriates to go to work in
Iraq. However, you are
personally concerned about
their safety there. How do
you proceed?
different. From an egalitarian perspective, the
pay arrangement may seem to be unfair.
However, from a realistic perspective, there
is able to find someone who is independently
wealthy and has a desire to help those in
poorer countries.
3. The HR director should seek volunteers and
may need to offer a premium level of pay and
additional benefits to attract such volunteers.
To deal with safety, firms that provide safety
training for contractors working in Iraq should
InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
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
These question concern decision of a
very personal nature, where personal
values play an important role. Thus,
different conclusions are likely.
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 Closing Case to Chapter 3 (Parties in Saudi Arabia and China) also provides a
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?
InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
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.
InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
D.G. Collings & H. Scullion, eds, 2009, Special Issue on “Global Staffing”, International Journal of
Human Resource Management, 20(6), 1249-1450 – a special issue with research papers an various aspects
of the management of expatriates.
P.J. Dowling, M. Festing & A.D. Engle, 2008, International Human Resource Management, 5th ed.,
London: Cengage – A textbook focused on international aspects of human resource management.