Globalization of human resources: Expatriation in AsiaPacific

1
Unit 6

• Globalization of human resources Expatriation in
  Asia-Pacific

2
Objectives (I)

• Critically comment on the importance of
  international human resources within MNEs
• Analyze alternative staffing policy options and
  the reasons for selecting a particular strategy
• Outline the challenges of expatriate selection,
  preparation and repatriation
• Analyze the issues raised in successful staff
  repatriation
• Distinguish between expatriation and impartation

3
Objectives (II)

• Discuss the limitations of traditional approaches
  to expatriate management
• Discuss the principal differences between
  expatriate managers and global managers
• Analyze the strategies companies might adopt to
  utilize fully the expertise and experience of
  repatriated staff and apply these to career
  management and development
• Explain how effective global competitors are
  moving towards an integrated approach to
  expatriate management that is increasingly
  focusing on the production of global managers

4
Introduction (I)

• Organization attempt to manage human resources
  across national boundaries
• Due to the enormous transformations taking place
  in the social, political, economic and
  educational environment
• Requirements for increased utilization of
  technology, demand a well-education and trained
  workforce
• Effective HRM is the most of critical processes
  contributing to an organizations ability to
  respond rapidly to change

5
Introduction (II)

• Expatriate staff (work outside their country of
  the national origin) are an expensive and
  problematic resource
• There are 2 main difficulties likely to be
  encountered when managing or utilizing expatriate
  staff
• Arisen when people work in unfamiliar locations
  and environments
• Failure
• Premature return from, or under-performance in,
  an assignment
• Difficulties of re-integrating returning staff
  into the home organization
• Dual career families and the growing number of
  women expatriates

6
Introduction (III)

• Challenges arises from the dynamic nature of the
  international business environment
• Traditional model of expatriate management
  increase appropriate
• Balance the demands of global and regional market
  development
• Increased aware of the limitations of traditional
  executive managers
• Demanding new breed of executive, the so-called
  global manager
• Familiarity with a range of international
  business environments
• Ability to move easily across geographical,
  functional and cultural boundaries
• HRM be able to develop company structures and
  policies that truly support each aspect of an
  international assignment

7
International staffing policy (I)

• Concerned with the selection of employees for
  jobs (require the particular skills)
• Staff policy can be a tool for developing and
  promoting the corporate culture of the
  organization
• 3 types of people available to fill international
  management positions in both an organizations
  headquarters and foreign subsidiaries
• Parent-country nationals (PCNs)
• Firm has corporate headquarters

8
International staffing policy (II)

• Host-country nationals (HCNs)
• Nationals of country where a subsidiary is
  located
• Third-country nationals (TCNs)
• Outside both
• Example of Taiwanese manager
• Companies rely on HCNs for lower-level positions
  and tend to favour PCNs and TCNs for certain
  technical or managerial positions
• Chief executive officer and the chief financial
  officer

9
International staffing policy (III)
Advantages and disadvantages of PCNs
10
International staffing policy (IV)
Advantages and disadvantages of HCNs
11
International staffing policy (V)
Advantages and disadvantages of TCNs
12
International staffing strategy (I)

• Ethnocentric approach
• Company essentially believes that PCNs are better
  qualified, and perhaps more trustworthy, than
  HCNs and TCHs
• Advantage of PCNs appears to be their familiarity
  with the parent companys way of doing things
• Disadvantage of PCNs lack of awareness of local
  cultures
• Peruse an ethnocentric staffing policy for a
  number of reasons
• Lack of qualified HCNs to fill senior management
  positions

13
International staffing strategy (II)

• Maintain its unified corporate culture
• Example of Japanese firm
• Foreign operations to be headed by expatriate
  Japanese managers
• Establishing in early stages of
  internationalization
• New business, process or product in another
  country and prior experience is essential
• Transfer its core competencies to a foreign
  operation
• Polycentric approach
• HCNs are recruited to manage subsidiaries in
  their own country while PCNs occupy positions at
  corporate headquarters
• Belief that local people know the local
  environment better than anyone else does

14
International staffing strategy (III)

• Allow subsidiaries in different countries to set
  their own standards
• Example as Nestlé
• Geocentric approach
• Policy staffing with the best person suited for
  the job, regardless of national origin
• Example as Motors and Xerox
• Advantages
• Develop an international executive team
• Solve specific problems and perform a wide
  variety of ongoing activities
• Overcomes the federation drawback of the
  polycentric approach

15
International staffing strategy (IV)

• Disadvantages
• Obtaining a work permit for PCNs and TCNs
• The host government may utilize immigration
  controls to encourage HCN employment
• Expensive to implement because
• Widespread recruitment may result or be needed
• Substantial investment in cultural orientation
  and language training programmes for managers and
  their families might be necessary
• Substantial costs in transferring executives and
  their families into and away from foreign posts
  will definitely be incurred
• Salary levels of expatriates maybe higher than
  national levels in many countries

16
International staffing strategy (V)

• Regiocentric approach
• Recruiting is done on a regional basis
• Grouped geographically, culture, experiences and
  practice can be transferred within each regional
  group
• Examples of Pepsi-Cola, ABB and IBM
• Advantages
• Sensitivity to local conditions
• Local subsidiaries are staffed almost totally by
  HCNs or at least TCNs familiar with the region
• International firm to gradually move from a
  purely ethnocentric or polycentric approach to a
  geocentric approach

17
International staffing strategy (VI)

• Disadvantages
• Create federalism at a regional rather than a
  country level and constrain the organization from
  taking a global stance
• Improve career prospects at the national level,
  move the barrier to the regional level
• Advance to regional headquarters but rarely to
  positions at the parent headquarters
• Inpatriation strategies
• Transferring interational managers from their
  overeas assignments to the home market on a
  permanent or semi-permanent basis

18
International staffing strategy (VII)

• Allows the creation of truly multicultural and
  multinational organizations
• Example as Shell
• Crucial linkages between home and home
  organizations
• Strategy of inpatriation has much to offer
• Rapidly increase cognitive diversity within an
  organization
• Decision making and facilitates
  inter-organizational trust and communication
• Communication point for host country managers
  ensuring a greater clarity of vision
• Effective strategy of globalization
• Overcome some of the limitations of traditional
  expatriates
• More likely than expatriates to accept
  assignments to emerging markets where
  infrastructure is likely to be underdeveloped

19
Expatriate recruitment and selection (I)

• Recruitment
• Through identifying overseas managers who are
  currently working for the firm in a host country
  or managers
• Undertake an international assignment in the host
  country
• The reasons for employing those people are
• Unavailability of host country nationals who have
  the technical expertise or managerial talent
• Maintain and facilitate organizational
  coordination and control
• Maintain a foreign image in the host country
• More promising managers with international
  experience and so equip them for more responsible
  positions

20
Expatriate recruitment and selection (II)

• External recruitment methods have two benefits
• Hiring bring in seasoned management experience
  and personal maturity
• Accustomed to working and living in different
  cultures
• Drawbacks of external recruitment
• Search process is expensive
• Reputable national and international executive
  search firms impose high charges
• Difficult to manage and implement due to the
  distance involved
• Expatriate manager recruited from outside may
  find it difficult to adjust to the new
  environment

21
Expatriate recruitment and selection (III)

• Selection
• Resource managers must decide which candidates
  from the pool are the best qualified for overseas
  assignments
• Unfamiliar sets of environmental forces that can
  be very different those of the home country
• Devise a suitable selection process for
  candidates and their family members when
  contemplating sending them on an overseas
  assignment
• Appropriate criteria are suggested below
• Adaptability of expatriates and family members
• Most expatriate failure is not caused by
  inadequate technical skills
• Inability of expatriates and their families to
  adjust to an unfamiliar culture
• Adapt to new circumstances and situations and to
  respond flexibly to different ideas

22
Expatriate recruitment and selection (IV)

• Solve different frameworks
• Culture, polities, religion, ethic or different
  perspectives
• Family situations reason for expatriate failure
• In-depth interviews help assess adaptability
• Explore the level of marital stability,
  responsibilities for ageing parents, existence of
  learning disabilities in a child, behavioral
  problems in teenagers, emotional stability of
  family members
• Technical skills
• Located at some distance from headquarters or the
  centre of technical expertise
• Human empathy and cross-cultural sensitivity may
  be more important than technical skills

23
Expatriate recruitment and selection (V)

• Personal traits and relational abilities
• Deal effectively with their superiors, peers,
  subordinates, business associates and clients
• Ability to related to, live with and work among
  people whose value systems, beliefs, customs,
  manners and ways of conducting business may
  differ greatly from one own
• Maturity and emotional stability
• Maintain emotional equilibrium at all times
• Interpersonal skills
• Verbal and non-verbal communication, the capacity
  to build trust and ability to utilize referent
  power when managing within foreign environment
• Expatriate manager should be a skilled negotiator
• Obtain the treatment for treatment for the
  foreign host countrys government

24
Expatriate recruitment and selection (VI)

• Expatriates sometimes have to train local
  replacement and transfer knowledge to their local
  colleagues
• Foreign language proficiency
• Confidence in interacting with locals will lead
  to successful overseas assignment
• Managerial and decision-making abilities
• Expatriates are operating under conditions of
  isolation or physical distance from the centre of
  decision-making in the home office
• Candidates must have knowledge of management
  practices and the ability to put them into
  practice
• Other criteria age, gender and race
• Some countries are male dominated, such as Japan

25
Expatriate recruitment and selection (VII)

• Cross-cultural and technical skills resulted in a
  number of approaches that international companies
  used
• Any weaknesses identified are addressed through
  appropriate training and personalized development
  plans and timetable are drawn up
• Recruitment to students from universities
  considerable international orientation through
  travel, language acquisition or cross-cultural
  experience

26
Expatriate failure and repatriation problems (I)

• Companies are likely to face both direct and
  indirect costs
• Overseas compensations, allowances and
  repatriation costs
• Indirect costs
• Loss of time and business opportunities
• Damaged relations with the host country
  government
• With local organizations
• With direct customers in the foreign country
• Long-team negative impact upon the firms
  reputation in the regional area

27
Expatriate failure and repatriation problems (II)

• Expatriates costs
• Damaged career prospects
• Emotional upheaval
• Reduced self-esteem
• Self-confidence
• Job satisfaction
• Prestige among peers
• motivation
• Some factors can contribute to expatriate
  failure
• Inappropriate selection criteria and/ or policy
• Resolve a staffing crisis in an overseas
  subsidiary
• Tend to choose only on criteria such as technical
  skills
• Tend to ignore such factors the expatriates
  personality, ability, emotional characteristics,
  family situation and cultural knowledge

28
Expatriate failure and repatriation problems (III)

• Lack of pre-departure programmes for expatriates
  and their families
• Cross-cultural and language training assists
  expatriates in recognizing the likely
  difficulties
• Pre-departure programmes should include critical
  family issues
• What the partner do, childrens schools, medical
  coverage and making friends
• Inadequate support mechanisms
• Compensation packages
• Career support
• Repatriation practice

29
Expatriate failure and repatriation problems (IV)

• Repatriation problems
• Expatriates re-entering the home organization at
  the end of their assignment requires attention
• Loss of highly capable employees
• Underutilization of skills
• Reluctance by others to accept overseas
  assignments
• Problems often arise where companies maintain a
  sharp division between their domestic and
  operations
• Equally damaging can be the situation that
  considered in some way secondary to domestic
  business

30
Expatriate failure and repatriation problems (V)

• Tendencies can result in problems with
  repatriation
• Send overseas medicore performers and limited
  career progression upon repatriation
• Desire to transfer problem staff or reluctance
  of high potential staff to follow the overseas
  track
• Expatriates suffer an out of sight, out of mind
  situation that considered of new positions or
  promotions until they return
• Limited job opportunities at the time of re-entry
• Employee must re-enter the same division or short
  planning horizons can restrict opportunities
• Repatriates are often disappointed by the
  reception they receive
• Their skills and experience may be undervalued
• Less than challenging position may result in a
  decision to leave the organization

31
Expatriate failure and repatriation problems (VI)

• Repatriation problems are often symptomatic of
  more deeply entrenched HR difficulties
• Inability to effectively utilize resources
• Reflected in too short a term focus
• Inability to integrate domestic and foreign
  experience
• Limited authority of the HR function
• Strategies available to international
  organizations that can result in more effective
  repatriation process
• Select more competent staff to place on overseas
  assignment
• Higher demand upon their return and placed into
  challenging positions

32
Expatriate failure and repatriation problems (VII)

• Assign a formal mentor to expatriates
• Keep channels of communication open and to ensure
  that the interests of the expatriate are
  represented at a senior level
• Link overseas assignment to long term career
  development
• Increase the return on a period spent overseas
  and encourage the most able staff to consider
  such appointments
• Plan the timing and pattern of re-entry better
• Greater flexibility in overseas assignment could
  contribute significantly to the planning of
  re-entry
• Appropriate positions in the home market

33
Expatriate failure and repatriation problems
(VIII)

• Final strategy would be to use repatriates as
  trainers of future expatriates
• Ensure knowledge acquired overseas is passed on
• Foster a more receptive environment for
  international staff
• Enjoy a greater commonality of shared experiences
  and concerns
• Both HK and China emphasized problem-focused as
  opposed to symptom-coping strategies since the
  former is associated with more positive
  adjustment

34
Challenges of expatriates (I)

• Cultural dimensions and orientations
• Expatriate managers will face in Asia-Pacific
  region is to utilize Hofstedes cultural
  dimensions framework
• Or examine differences through this
• Power distance
• Less powerful members of institutions and
  organizations within a country expect
• Accept that power is distributed unequally
• Autocratic policies can be pursued
• Acceptance of wage and salary differentials
• Acceptance of status and position
• Institutionalization of power through hierarchy

35
Challenges of expatriates (II)

• Individualism
• Contrasted with collective cultures where people
  identify with strong, cohesive groups
• The importance of harmony, the balance between
  tasks and relationships and the criteria for
  promotion
• In Confucian cultures the family is the basic
  defining group
• Masculinity
• Tend to rate achievement and success much more
  highly than the quality of life or caring for
  others
• Management practices will reflect the salary
  versus working hours, competition in the
  workplace and styles of leadership

36
Challenges of expatriates (III)

• Uncertainly avoidance
• People are socialized into accepting ambiguity
  and tolerating uncertainty about the future
• Organizations in cultures which rate high on
  uncertainty avoidance are characterized
• Tightly structured
• Follow written rules
• Managers become involved in operational details
• Unlikely to undertake risky decision
• Long-term orientation
• Most clearly contrasted with Anglo cultures in
  terms of this final dimension
• Anglo cultures are much more short-term in their
  orientation

37
Challenges of expatriates (IV)

• Overwhelming tendency in the region for
  collectivism
• High power distance and an emphasis on the long
  team
• Importance of paternalism and relationship-focused
  management in the region
• Women and dual career issues
• Situation of a female going overseas is seen as
  more problematic than that of a male assignee
• Some problems arise within MNEs
• Perception that women are not interested in
  overseas assignments

38
Challenges of expatriates (V)

• Foreign prejudice towards women, women in the
  workforce
• Belief that dual career marriages make it more
  difficult to take on an overseas assignment
• Womens lack of interest
• Women are less interested in overseas assignments
  than their male counterparts
• Because of the way they perceive their family
  role
• Their career and their greater fear of isolation
  and loneliness in a foreign culture
• Foreigners prejudice
• Women expatriates would be ineffective as
  managers in all international assignments
• Limit international management participation for
  women

39
Challenges of expatriates (VI)

• Dual career issues
• Dual career marriages are considered a major
  reason that companies avoid sending women
  managers abroad
• Male partners face additional obstacles in terms
  of adjusting to the role of secondary breadwinner
  of homemaker
• Women make the transition to these role easier
  than men
• Negative or natural career move can br
  troublesome for men
• Female brings distinct disadvantages in working
  internationally, the perception among female
  expatriates themselves is quite different
• Female expatriates enjoy advantages
• Visibility
• Foreign clients are curious about them, anxious
  to meet them and tend to remember them better

40
Challenges of expatriates (VII)

• Interpersonal skills
• Local men to talk to because women are often more
  nurturing than men
• Women listen better and have more patience
• Adjustment
• Greater ability to adjust to the isolation during
  foreign assignments than their male counterparts
• Novelty
• Tend to assume that the women would not have been
  sent unless they were the vary best
• The major difficulties include home companies
  barriers, misconceptions, gender-specific laws
  and unintentional discrimination
• Home companies barriers
• Limit the female expatriates professional
  opportunities and job scope

41
Challenges of expatriates (VIII)

• Increase the difficulty of achieving success in
  the foreign assignment
• Misconceptions
• Female expatriates may be misconceived as
  subordinates or as women accompanying a spouse
• Challenge the credibility, authority and
  responsibility of women expatriates
• Gender specific laws
• Face difficulties resulting from regulating
  entry, movement and activity within countries
• Unintentional discrimination
• Strongly masculine culture that blind to its
  ingrained bias and slow to change

42
Changes in international staffing policy and
strategy (I)

• Prompting a reconsideration of traditional
  expatriate policy
• Encouraging international HR managers to give
  careful consideration to their expatriate
  policies
• Globalization, strategy alliances and regional
  strategies are rending the traditional expatriate
  model increasingly ineffective
• Some factors are providing opportunities or
  pressures for major change in staffing strategy
  and policy
• Education
• Increasing number and level of qualified people
  world-wide

43
Changes in international staffing policy and
strategy (II)

• Telecommunications
• Provided better access to resources, wider
  coverage and lower cost
• Break down international barriers and made the
  world smaller and more accessible
• Air travel
• Larger number of locals can be employed as it is
  easier for headquarters to monitor them
• Increasing global congruence
• Reduced by the development of regional trading
  agreements
• NAFTA, the EU and ASEAN
• Increased convergence in areas such as sport and
  entertainment

44
Changes in international staffing policy and
strategy (III)

• Host government policy
• Optimize and utilize the talent pool available
  domestically
• Through immigration policy and visa requirements
• Use of non-traditional forms of international
  market servicing strategy
• Strategic alliances
• Increased competitive pressure and recognition
• Advantage now lies with human capital resources
• Limitations of expatriates assignments encouraged
  the development of a new class of international
  executive-The global manager
• Human resource is internal discuss the principal
  changes in a little more detail

45
Changes in international staffing policy and
strategy (IV)

• The demands of global strategy
• MNEs have matured through international
  communications, travel, transportation and
  distribution infrastructure
• Globalize or standardized approach towards
  sourcing, production, marketing and functions is
  both feasible and desirable
• The global firms that emerge are often structured
  by products or product/region matrices and
  require substantial coordination across local
  market
• Reduce PCN staff at operative levels
• Increased the use of expatriates in strategic
  functions

46
Changes in international staffing policy and
strategy (V)

• Reduce the need for PCNs abroad
• Require the HCN to train in the home country
  headquarters
• Termed as a foreign country national (FCN)
• Adapt MNE foreign operations to host country
  cultures
• Provides the mode of operation of MNEs in their
  home countries
• Strategic alliances
• Market economies have been increasingly willing
  to participate in cooperative ventures with their
  direct competitors

47
Changes in international staffing policy and
strategy (VI)

• The partners in an alliance maintain their
  individual identities and engage in other
  activities
• Expansion through mergers and acquisitions of
  established competitors
• The merging of different organizational cultures
  may require HCNs to spend time at the
  headquarters
• Rationalization
• Aims at economic growth through the widening of
  domestic markets to allow economies of scale and
  facilitate international exchange

48
Changes in international staffing policy and
strategy (VII)

• Firms to use relatively more or fewer PCNs rely
  on the degree of within-region integration
• Fortress-type regions
• Due to more pronounced motives of control
• Know-how transfer associated with undertakings to
  generate greater value added within regions
• Open regions, competition is harder and use of
  HCNs before PCNs
• Makes control of subtle differences in customer
  demand
• Effective handling of local matters crucial for
  success
• Operative positions by HCNs rather than by PCNs,
  take the form of networks including suppliers
  and/or customers
• Global teams address certain problems, implying
  short-term assignments
• Companies with a more comprehensive picture of
  customers needs
• Profit from the synergy to unify the varying
  perspectives of different cultures and different
  business dunctions

49
The expatriate manger versus the global manager
(I)

• The crucial determinant of success in global
  business is effective development of global
  mangers
• Define a global manager
• Flexible and open mind
• With a well-rounded understanding of
  international business
• Ability to work across cultural
• Functional boundaries
• Balance the simultaneous demands of global
  integration and national responsiveness

50
The expatriate manger versus the global manager
(II)
Contrast between expatriate and global managers
51
The expatriate manger versus the global manager
(III)
52
The expatriate manger versus the global manager
(IV)

• TCNs are multilingual and ability to work in more
  than one language and may exhibit greater
  cultural sensitivity
• PCNs manager selected ob the basis of technical
  ability with little attention paid to
  international experience
• Place importance on local hiring may consider
  TCNs just as unacceptable as PCNs
• MNEs develop their globally sophisticated
  managers
• Trend towards greater teamwork, cross-functional
  teams
• Comprise different cultures, languages, locations
  and time zones

53
Unit 6

• The end