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Chapter 12
HUMAN RESOURCES MANAGEMENT
Learning Objectives
After studying this chapter, you should be able to:
2. identify the major functions of human resources: selection techniques and
3. identify the problems and solutions in international postings—the expatriate
dilemma.
General Teaching Suggestions
Introduce the concept of HRM to the class with an open discussion on what the students
know of its functions. Guide the discussion to separate functions of HRM and proceed to
discuss the concepts in the chapter.
Opening Case Discussion Guide
Through the experiences of British businessman Tim Clissold, who was sent to China to
oversee its investments for Asimco, the case reveals the pitfalls of not assigning the right
persons in foreign subsidiaries.
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CHAPTER OUTLINE: KEY CONCEPTS AND TERMS
Sections I through VII of Chapter 12
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I. THE IMPORTANCE OF INTERNATIONAL HRM
1. Key Concepts
Finding the right people to fill positions in a division or department of the
2. Key Terms
• Expatriate – A person from one country who is working and residing in another
country.
II. HUMAN RESOURCES MANAGEMENT (HRM) FUNCTIONS
1. Key Concepts
• Selection: The common methods for selecting new employees are:
i. Interviews
INTERNATIONAL MANAGEMENT Chapter 12: Human Resource Management
ii. Group Interviews
iii. Observation Method
iv. Written tests
• Overview of Selection Methods: Whether a firm uses interviews, observation, or
written tests, the most useful test for a given firm will also take local culture into
account. Considerations for implementing expatriate selection are:
i. Implementing Expatriate Selection
ii. Adaptability to Cultural Change
• Utilizing Expatriates for Foreign Assignments: Advantages of using expatriates:
i. Expatriates are familiar with the company’s resources, processes, and
values.
Disadvantages of using expatriates
i. Expatriates are expensive.
ii. The expatriate and/or his or her family may not be particularly motivated
to learn about the new culture and may not adapt to it well.
iii. Even when an expatriate is able to adapt, there is still a significant
learning curve.
• Utilizing Host-Country Employees for Foreign Assignments: Advantages of
using host-country employees
i. Host-country locals are already familiar with the local language, culture,
and customs, so they do not require expensive training in language
proficiency or acculturation.
Disadvantages of using host-country locals
i. It may be difficult to find qualified people at the local level with the right
skills for the assignment, especially in less-developed countries.
2. Key Terms
• Group interviews – Selection tool in which typically there are multiple
candidates and multiple interviewers present at the same time.
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III. TRAINING
1. Key Concepts
Expatriates must be prepared to assimilate into many different cultures and move
IV. APPRAISAL AND COMPENSATION
1. Key Concepts:
• Appraisal: Defined as a systematic and periodic review of employee
performance, normally on an annual basis. The basic purpose is to build better–
performing organizations and to aid in the professional development of
employees. There are several types of performance appraisal.
i. The written essay
ii. Trait rating
• Additional Organizational Applications: A variation of the written essay
evaluation system is a system of employee differentiation “force ranks”
• Compensation: A central part of the compensation decision an international firm
must make is whether to establish an overall policy for all employees or to
1. Key Terms
• 360-degree evaluations – Evaluations of an employee conducted by the
supervisor, subordinates, peers, and sometimes customers.
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V. SOCIALIZATION
1. Key Concepts
VI. ADDITIONAL CHALLENGES FACING EXPATRIATES IN
INTERNATIONAL POSTINGS
1. Key Concepts
Expatriates face many challenges for which they must be prepared. Some of them
are:
i. Physical environment
ii. Social environment
iii. Lack of adequate training for foreign assignments
iv. Communication Challenges
v. Technical sophistication
vi. Parent objectives and policies
vii. Family
VII. SUMMARY
1. Key Concepts:
• This chapter has briefly described the HR function, how it may differ in
international firms that have to staff international offices, the questions facing
expatriate employees, and when to use them versus host country local employees.
• International firms have three options for selecting management staff for their
foreign operations:
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• The chapter discussed the relative advantages and disadvantages of hiring
expatriates and locals, and presented the factors HR managers must consider
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END-OF-CHAPTER GUIDE
* MANAGERIAL GUIDELINES
* OPENING VIGNETTE DISCUSSION QUESTIONS
MANAGERIAL GUIDELINES
1. Strong HRM leads to greater workforce productivity, improved organizational
2. Given its importance, the human resources function needs to be given support
from the firm’s top management.
3. HR should be explicitly linked with overall strategic planning and should deliver
4. Selection is quite important. For firms that need to staff international locations, it
is helpful to find employees who have some international experience, preferably
6. Training is also important in hiring foreign nationals to work in the overseas
7. There are many appraisal methods, all of which have benefits and drawbacks. It is
important for the firm to understand what behaviors and objectives it would like
to encourage.
8. Monetary rewards are valued by most employees, but it is important not to neglect
9. Even if the expatriate is carefully selected and given training, this assignment is
10. Human resources can be used to help the firm achieve its objectives. Top
management needs to understand the type of workforce it seeks to build; this is
OPENING VIGNETTE DISCUSSION QUESTIONS
1. Could Asimco have done any preparation in terms of human resources to avoid
the problems they faced?
2. Do you think this problem is unique to China?
DISCUSSION QUESTIONS
1. How does the international HRM function differ from the domestic HRM
function?
2. What selection criteria are most important in choosing people for an overseas
assignment? Identify and describe the four that you judge to be of most universal
importance, and defend your choices.
Some of the factors that should be focused in the selection for overseas
assignments are:
i. Adaptability to cultural change
3. Building on your answer to Question 2, discuss the theoretical dimensions that
may affect anticipatory and in-country adjustment of expatriates. How can these
be turned into selection criteria?
4. Why are individuals motivated to accept international assignments? Which of
these motivations would you rank as positive reasons? Which would you regard
as negative reasons?
Individuals must be engaged at work and believe in the significance of the job.
IN-CLASS EXERCISES
1. You are the manager of the international HRM function for a firm whose top
management is assigning an executive from the home office to head one of the
firm’s foreign subsidiaries. Relative to the cultural adaptation phases, what would
you advise the top management?
According to the text, some of the issues to consider in the cultural adaptability of
2. Regarding Exercise 1, what question would you ask the top management in order
to be sure that the right expatriate has been selected?
Along with the issues examined in Question 1, the student should also consider
3. What are the international HR implications that can be drawn from the Japanese,
European, and U.S. international-expatriate practices?
4. How could information technologies assist in managing global human resources?
5. Complete the Cultural Intelligence questionnaire given in the text to identify your
own cultural intelligence or CQ. The statements reflect different facets of cultural
TAKE-HOME EXERCISES
1. The International Business Center Web site (http://www.international-business-
2. Record your responses to the expatriate Canadian’s negative impression of her
SHORT CASE QUESTIONS
1. Why do you think Feng Shui works for casinos but did not work well for the
Coca-Cola company?
Cultural adaptation should reciprocate the setting. Casinos were catering to a
2. Do you think Coke could have done something to make the application of Feng
Shui work?
3. Where else would Feng Shui work well for a firm?
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