Human Resource Management

Activities carried out by a firm to use its human

resource effectively
Staffing, management development, performance

evaluation, compensation

Across national borders the process increases in

complexity
Environmental differences of: labor markets, culture,

legal systems, economic systems

HR differences: compensation practices, labor laws,
motivation issues

Staffing and International Strategy

Staffing
Philosophy
Ethnocentric
key overseas
positions staffed
by home
managers
Polycentric
key overseas
positions staffed
by local
managers
Geocentric
best for job gets
it

Strategy Fit??

Pros

Cons

Expatriate Managers
Managers assigned to to unit in country other than that of

their national origin

High failure rates for US MNCs (in order of importance)

Spouse cannot adjust culturally

Manager cannot adjust culturally
Other family adjustment problems
Managers lack of personal or emotional maturity
Managers inability to cope with broader responsibility overseas

High failure rates for Japanese firms (in order of importance

Managers inability to cope with broader responsibility overseas

Manager cannot adjust culturally
Managers lack of personal or emotional maturity
Lack of technical competence
Spouse cannot adjust culturally

Expatriate Success Predictors

Self-orientation
Strengthen self-esteem, self-confidence, mental well-being
Adapt to food, music, sport, outside interests
Superior technical competency

Others-orientation
Enhance ability to interact effectively with host nationals
Relationship development, willingness to communicate

Perceptual ability
Understand why people in other countries behave the way they do
Non-judgmental, non-evaluative in interpreting others behavior

Cultural toughness
How tough is host culture to adjust to?

Career Development for Expatriates

Pre-departure, on-site training
Cultural training
Language training
Practical training
Repatriation
Many repatriating expatriates lost to MNCs because
suitable positions not available at home
Autonomy, span of control, compensation
Repatriation strategy failure makes recruitment of
competent expatriates difficult

Other Expatriate Issues

Performance appraisal
Two groups with conflicting perspectives/cultures
appraise the expatriate: home managers, host
managers
Compensation
Different national standards
Expatriate pay issues: base pay, cost-of-living,
housing, education, hardship, foreign-servicepremium, double-taxation, medical/pension
benefits, home leave