Chapter 15
International Personal Selling and Personnel Management
LEARNING OBJECTIVES
After studying this chapter, students should be able to:
• Examine companies’ expatriate management strategies.
CHAPTER SPOTLIGHTS
• International Presence and Personnel Issues: The sales force of a company
operating overseas consists of expatriates and host-country nationals.
CHAPTER OVERVIEW
• This chapter examines the different expatriate management strategies used by
international corporations. The chapter describes three types of expatriates – home-
CHAPTER OUTLINE
15-1 International Presence and Personnel Issues:
The foreign sales force of the multinational corporation is composed of
expatriates (home-country nationals and third-country nationals) and host-country
15-1a Expatriates:
Employees working in a country other than the country of their nationality. There
are two types of expatriates:
1) Home-Country Nationals: Employees from the home country of the
15-1b Host-Country Nationals (Locals):
Local salespeople who work in their home country for an international
15-1c A Recent Alternative: Long-Distance International Selling:
15-2 Managing International Employees
15-2a Managing Relationships:
15-2b Understanding the International Buyer-Seller Relationship:
15-2c Understanding Cultural Values and the Relationship between Buyer and Seller:
1) National Character, Organizational Culture, and Personality: The level of
communication between buyer and seller varies according to dimensions such
15-3 Successfully Managing Expatriates:
There are high costs associated with failed expatriate assignments. To reduce
these costs, firms attempt to minimize their early return rate by engaging in the
appropriate training and development of expatriates.
15-3a Recruiting Expatriates:
Companies should select employees who are open-minded and aware of their own
15-3b Attenuating Culture Shock:
Culture shock, defined as a feeling of anxiety resulting from one’s presence in an
15-3c Training for International Assignments:
Companies use different strategies in training their employees. Among such
15-3d Motivating Expatriates: In order for the international assignment to be successful,
the employee must be highly motivated by both intrinsic aspects of motivation
and by extrinsic aspects, such as compensation, leave and family policies, etc.
Some compensation incentives include:
1) Cost-of-Living Adjustment/Post Adjustment: A compensation incentive
whereby the company adjusts an expatriate’s salary to reflect the cost of living
154
4) Home-Leave Allowance: Allowance paid for family vacation in the home
country. It also includes payment for children schooled in the home country to
15-3e Obstacles to the International Sales Mission:
Factors such as restrictions imposed on interactions with foreigners in some
15-3f Repatriation Issues:
When expatriates return to the home country, they often experience reverse
culture shock, or a feeling of anxiety associated with a longing for the
international environment left behind. Multinational corporations typically offer
different types of incentives upon repatriation in order to attenuate culture shock.
KEY TERMS
Cost-of-Living Adjustment/ Post Adjustment: A compensation incentive whereby the
company adjusts expatriate salaries to reflect the cost of living in the new environment at
standards in the expatriate’s home country; also called post-adjustment.
Home-Country National: A local employee who works in his or her home country for
the international corporation.
155
Moving Allowance: A compensation incentive whereby the company pays for the
household moving expenses to the country of assignment and, at the end of the
assignment, back to the home country.
National and Regional Character: A set of behavior and personality characteristics
shared by individuals of a certain country.
Repatriation Allowance: A compensation incentive whereby the company covers
expenses involved in moving back to the home country, as well as, frequently, a large
sum paid for successfully completing the international assignment.
Reverse Culture Shock: Anxiety experienced after returning to the home country,
associated with a longing for the international environment left behind and with the
difficulty of readjusting to the home country and to corporate life at one’s firm.
156
DISCUSSION QUESTIONS
1) Describe the three types of employees a company is likely to send to a foreign
post. What are their strengths and weaknesses?
Home-country nationals are expatriates from the company’s home country
working in a foreign country. Companies whose products are at the forefront of
technology and whose selling functions rely on extensive training and specialized
2) Discuss some of the management and culture-related challenges involved in
international sales force management. How do companies address those challenges?
International sales force management provides numerous challenges due to the
difference in culture between the home country and the host country. International
3) How do international companies select and train employees for international
assignments?
Companies should select employees who have an openness and sensitivity to
others, and cultural sensitivity and awareness. These employees should also have the
ability to change their usual behavior in cross-national settings, and a high level of
4) What are some of the methods that international firms use to motivate employees
for international assignments, and how do these companies ensure that employees
face minimal culture shock upon repatriation?
The internal aspects of motivation are addressed in the recruiting process, which
ensures that only appropriate candidates are deployed. There are also several extrinsic
methods of motivations. Cost-of-living adjustment, for example, is a compensation
incentive whereby the company adjusts expatriate salaries to reflect the cost of living in
REVIEW QUESTIONS
True/False
Multiple Choice
1. B
CASE 15-1
Manufacturing in China: Information Technology Challenges
1. What efficiencies do Electronic Data Interchange systems provide in the
relationship between buyers and sellers?
Among the efficiencies provided by EDI systems for buyers and sellers are related to
tracking the items as they move from suppliers to manufacturing sites, and to destination
2. What are some of the logistics-related challenges and costs encountered by
multinational firms manufacturing in China?
In China, the information technology infrastructure is considerably less sophisticated
than in high-income countries. Coupled with expensive inland transportation and the high
3. How does EDI lower the costs of manufacturing in China?
In one EDI example, FedEx has a logistics distribution center in Shanghai, among several
others in Asia, that manages everything for customers from orders and inventory to the
159
CASE 15-2
The Expatriate Spouse: Managing Change
1. Is Geena experiencing culture shock? Explain. If the answer is yes, what can
she do to lessen its impact?
She appears to experience culture shock; she is clearly lonely in a new unfamiliar culture,
2. What are the costs of bringing a spouse along for an assignment? Would the
company be better off if the spouse remained in the home country? Explain.
The costs can be substantial: At the very minimum, firms have to provide for the
3. How should Geena’s agency help in addressing the needs of expatriate
spouses. Offer ideas and activities that would benefit the large group of
spouses accompanying expatriates in China.
The agency should address the psychological challenges of culture shock, having
160