Title: Human Resource Selection and Development Across Cultures
1Human Resource Selectionand Development Across
Cultures
- The specific objectives of this chapter are
- IDENTIFY the three basic sources that MNCs can
tap when filling management vacancies in overseas
operations in addition to options of
subcontracting and outsourcing. - DESCRIBE the selection criteria and procedures
used by the organization and individual managers
when making final decisions.
2Human Resource Selectionand Development Across
Cultures
The specific objectives of this chapter are
- DISCUSS the reasons why people return from
overseas assignments, and present some of the
strategies used to ensure a smooth transition
back into the home-market operation. - DESCRIBE the training process, the most common
reasons for training, and the types of training
that often are provided.
3Human Resource Selectionand Development Across
Cultures
The specific objectives of this chapter are
- EXPLAIN how cultural assimilators work and why
they are so highly regarded.
4Sources of Human Resources
- MNCs can use four basic sources for filling
overseas positions
Home-country Nationals (Expatriates)
- Expatriate managers who are citizens of the
country where the multinational corporation is
headquartered - Sometimes called headquarters nationals
- Most common reason for using home-country
nationals, or expatriates, is to get the overseas
operation under way
5Sources of Human Resources
- MNCs can use four basic sources for filling
overseas positions
Home-country Nationals (Expatriates)
- Local managers hired by the MNC
- They are familiar with the culture
- They know the language
- They are less expensive than home-country
personnel - Hiring them is good public relations
Host-country Nationals
6Sources of Human Resources
- MNCs can use four basic sources for filling
overseas positions
Home-country Nationals (Expatriates)
- Managers who are citizens of countries other than
the country in which the MNC is headquartered or
the one in which the managers are assigned to
work by the MNC - These people have the necessary expertise for the
job
Host-country Nationals
Third-country Nationals
7Sources of Human Resources
- MNCs can use four basic sources for filling
overseas positions
- Individuals from a host country or a
third-country national who are assigned to work
in the home country - The use of inpatriates recognizes the need for
diversity at the home office - Use of inpats helps MNCs better develop their
global core competencies - MNCs can subcontract or outsource to take
advantage of lower human resource costs and
increase flexibility
Home-country Nationals (Expatriates)
Host-country Nationals
Third-country Nationals
Inpatriates
8Selection Criteria for International Assignments
General Criteria
- Many criteria are used in selecting managers for
overseas assignments including
- Education
- Knowledge of local language
- Motivation
- Support of spouse children
- Leadership
- Adaptability
- Independence
- Self-reliance
- Physical emotional health
- Age
- Experience
9Rank of Criteria in Expatriate Selection
Adapted from Table 141 Rank of Criteria in
Expatriate Selection
10Selection Criteria for International Assignments
Adaptability to Cultural Change
- Organizations examine a number of characteristics
to determine whether an individual is
sufficiently adaptable. - Work experiences with cultures other than ones
own - Previous overseas travel
- Knowledge of foreign languages
- Recent immigration background or heritage
- Ability to integrate with different people,
cultures, and types of business organizations
11Selection Criteria for International Assignments
Adaptability to Cultural Change
- Organizations examine a number of characteristics
to determine whether an individual is
sufficiently adaptable. - Ability to sense and accurately evaluate
developments in the host country - Ability to solve problems within different
frameworks and perspectives - Sensitivity to differences of culture, politics,
religion, and ethics - Flexibility in managing operations on a
continuous basis despite lack of assistance and
gaps in information
12Development of Satisfaction in Host Country
Note Satisfaction scale 1 extremely low 7
extremely high.
Adapted from Figure 141 Development of
Satisfaction in Host Country over Time
13Selection Criteria for International Assignments
Adaptability to Cultural Change
- Those who were best able to deal with their new
situation had developed coping strategies
characterized by sociocultural and psychological
adjustments including - Feeling comfortable that their work challenges
can be met - Being able to adjust to their new living
conditions - Learning how to interact well with host-country
nationals outside of work - Feeling reasonably happy and being able to enjoy
day-to-day activities
14Activities That Are Important for Expatriate
Spouses
Adapted from Table 142 Activities That Are
Important for Expatriate Spouses (scale 15, 5
very important)
15Activities That Are Important for Expatriate
Spouses
Adapted from Table 142 Activities That Are
Important for Expatriate Spouses (scale 15, 5
very important)
16Selection Criteria for International Assignments
Other Considerations
- Applicants better prepare themselves for
international assignments by carrying out the
following three phases
Phase I
- Focus on self-evaluation and general awareness
include the following questions - Is an international assignment really for me?
- Does my spouse and family support the decision
to go international? - Collect general information on available job
opportunities
17Selection Criteria for International Assignments
Other Considerations
- Applicants better prepare themselves for
international assignments by carrying out the
following three phases
- Conduct a technical skills assessment Do I have
the technical skills required for the job? - Start learning the language, customs, and
etiquette of the region you will be posted - Develop an awareness of the culture and value
systems of the geographic area - Inform your superior of your interest in the
international assignment
Phase I
Phase II
18Selection Criteria for International Assignments
Other Considerations
- Applicants better prepare themselves for
international assignments by carrying out the
following three phases
Phase I
- Attend training sessions provided by the company
- Confer with colleagues who have had experience in
the assigned region - Speak with expatriates and foreign nationals
about the assigned country - Visit the host country with your spouse before
the formally scheduled departure (if possible)
Phase II
Phase III
19International Human ResourceSelection Procedures
- Anticipatory Adjustment
- Training
- Previous experience
- In-country Adjustment
- Individuals ability to adjust effectively
- Ability to maintain a positive outlook, interact
well with host nationals, and to perceive and
evaluate the host countrys cultural values and
norms correctly - Clarity of expatriates role in the host
management team - Expatriates adjustment to the organizational
culture - Nonwork matters
20The Relocation Transition Curve
6. Search for Meaning Understanding reasons for
success and failure. New models/personal theories
created
7
7. Integration of New Skills and Behavior
Acceptance of the new environment
3. Interest A deeper exploration of the
environment and a realization that it is
fundamentally different from home
1. Unreality The feeling that the relocation is
a dream
6
2
5
5. Experimentation and Testing of New
Approaches Practice phase trying to do things
differently Feedback of results success and
failure
3
2. Fantasia The feeling of enchantment and
excitement in the new environment
1
4
4. Acceptance of Reality Letting go of past
comfortable attitudes and realizing you are a
stranger in a strange land
Adapted from Figure 142 The Relocation
Transition Curve
21Common Elements of Compensation Packages
- Compensating expatriates can be difficult because
there are many variables to consider - Most compensation packages are designed around
four common elements
Allowances
Taxes
COMPENSATION PACKAGE
Base Salary
Benefits
22Relative Cost of Living in Selected Cities
Tokyo Oslo Zurich Hong Kong Copenhagen Paris
London New York Singapore Stockholm Seoul
Adapted from Figure 143 Relative Cost of Living
in Selected Cities (New York 100)
23Relative Cost of Living in Selected Cities
Frankfurt Beijing Moscow Rome Tel Aviv Mexico
City Toronto Prague Jakarta Warsaw Kuala Lumpur
Adapted from Figure 143 Relative Cost of Living
in Selected Cities (New York 100)
24Relative Cost of Living in Selected Cities
Johannesburg Bangkok Cairo Buenos Aires Sao
Paulo Manila
Adapted from Figure 143 Relative Cost of Living
in Selected Cities (New York 100)
25Common Elements of Compensation Packages
- Base salary
- Amount of money that an expatriate normally
receives in the home country - Benefits
- Should host-country legislation regarding
termination of employment affect employee
benefits entitlements? - Is the home or host country responsible for the
expatriates social security benefits? - Should benefits be subject to the requirements of
the home or host country? - Which country should pay for the benefits?
- Should other benefits be used to offset any
shortfall in coverage? - Should home-country benefits programs be
available to local nationals?
26Common Elements of Compensation Packages
- Allowances
- Cost-of-Living Allowance
- Payment for differences between the home country
and the overseas assignment. - Designed to provide the expatriate the same
standard of living enjoyed in the home country - May cover a variety of expenses, including
relocation, housing, education, and hardship - Incentives
- A growing number of firms have replaced the
ongoing premium for overseas assignments with a
one-time, lump-sum premium
27Common Elements of Compensation Packages
- Taxes
- Tax equalization
- An expatriate may have two tax bills for the same
pay - Host country
- U.S. Internal Revenue Service
- MNCs usually pay the extra tax burden
28Employer Incentive Practices Around the World
Adapted from Table 143 Employer Incentive
Practices Around the World
29Tailoring the Compensation Packages
- Balance-sheet approach
- Ensure the expatriate does not lose money from
the assignment - Complementary approach
- Negotiate to work out an acceptable ad hoc
arrangement - Localization
- Pay the expatriate a salary comparable to local
nationals - Lump sum method
- give expatriate a lump sum of money
- Cafeteria approach
- Compensation package that gives the individual a
series of options - Regional system
- Set a compensation system for all expatriates who
are assigned to a particular region
30Individual and Host-Country Viewpoints
- Individual desires
- Why do individuals accept foreign assignments?
- Greater demand for their talents abroad than at
home - Host-country desires
- Whom would it like to see put in managerial
positions? - Accommodating the wishes of HCOs can be
difficult - They are highly ethnocentric in orientation
- They want local managers to head subsidiaries
- They set such high levels of expectation
regarding the desired characteristics of
expatriates that anyone sent by the MNC is
unlikely to measure up
31Quality of Life in Select Major Metropolises, 2002
Zurich Vancouver Vienna Sydney Copenhagen Frankfu
rt Stockholm Amsterdam Brussels San
Francisco Tokyo Paris Singapore
New York 100
Adapted from Figure 144 Quality of Life in
Select Major Metropolises, 2002 (New York 100)
32Quality of Life in Select Major Metropolises, 2002
Madrid New York London Rome Hong Kong Buenos
Aires Kuala Lumpur Johannesburg Sao Paulo Mexico
City Shanghai Moscow New Delhi Belgrade
Adapted from Figure 144 Quality of Life in
Select Major Metropolises, 2002 (New York 100)
33Beliefs of Home-Country Organization Expatriates
Adapted from Table 144 Beliefs of Home-Country
Organization Expats
34Repatriation of Expatriates
- Reasons for returning to home country
- Most expatriates return home from overseas
assignments when their formally agreed-on tour of
duty is over - Some want their children educated in a
home-country school - Some are not happy in their overseas assignment
- Some return because they failed to do a good job
- Readjustment problems
- Out of sight, out of mind syndrome
- Organizational changes
- Technological advances
- Adjusting to the new job back home
35Effectiveness of Returning Expatriates
6 Years
5 Years
4 Years
3 Years
2 Years
1 Year
Adapted from Figure 145 Effectiveness of
Returning Expatriates
36Repatriation of Expatriates
- Transition strategies
- Repatriation Agreements
- Firm agrees with individual how long she or he
will be posted overseas and promises to give the
individual, on return, a job that is mutually
acceptable - Some of the main problems of repatriation
include - Adjusting to life back home
- Facing a financial package that is not as good as
that overseas - Having less autonomy in the stateside job than in
the overseas position - Not receiving any career counseling from the
company
37Human Resource Management Practices in Select
Countries
Adapted from Table 145 Human Resource
Management Practices in Select Countries
38Training in International Management
- Four basic philosophic positions
- Stresses nationalism and often puts home-office
people in charge of key international management
positions
Ethnocentric MNC
39Training in International Management
- Four basic philosophic positions
- Places local nationals in key positions and
allows these managers to appoint and develop
their own people
Ethnocentric MNC
Polycentric MNC
40Training in International Management
- Four basic philosophic positions
- Relies on local managers from a particular
geographic region to handle operations in and
around that area
Ethnocentric MNC
Polycentric MNC
Regiocentric MNC
41Training in International Management
- Four basic philosophic positions
- Seeks to integrate diverse regions of the world
through a global approach to decision making
Ethnocentric MNC
Polycentric MNC
Regiocentric MNC
Geocentric MNC
42Training in International Management
- Corporate Reasons for Training
- Ethnocentrism
- The belief that ones own way of doing things is
superior to that of others - Personal reasons
- To train overseas managers to improve their
ability to interact effectively with local people
in general and with their personnel in particular - Increasing numbers of training programs address
social topics these programs also focus on
dispelling myths and stereotypes by replacing
them with facts about the culture
43Model for the Development of Multinational
Managers
Overall objective
Increasing effectiveness of expatriate and
repatriated executives
Feedback
Problem recognition
Development objectives
Feedback
Assessment of development needs
How much development?
Feedback
Development method
Feedback
Intermediate result
Feedback
Evaluation
Effectiveness of the expatriate executives
Desired result
Re-entry training
Development method
Feedback
Desired result
Evaluation
Effectiveness of the repatriated executives
Adapted from Figure 146 A Model for the
Development of Multinational Managers
44Model for the Development of Multinational
Managers
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Adapted from Figure 146 A Model for the
Development of Multinational Managers
45Model for the Development of Multinational
Managers
Overall Objective
Increasing effectiveness of expatriate and
repatriated executives
Problem Recognition
- Internal relations
- External relations
- Family relations
- Relations with host government
- Headquarters relations
- Relations with home government
Return To Slide 44
Development Objectives
BACK
NEXT
Adapted from Figure 146 A Model for the
Development of Multinational Managers
46Model for the Development of Multinational
Managers
Development Objectives
- Review terms and conditions of assignment
- Increase cultural awareness
- Increase knowledge of the host country
- Impart working knowledge of the foreign language
- Increase conflict management skills
- Minimize re-entry problems
Assessment of Development Needs
How much development?
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Development Method
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Adapted from Figure 146 A Model for the
Development of Multinational Managers
47Model for the Development of Multinational
Managers
Development Method
- Knowledge about cultural, political, economic,
business, legal, and social factors of the host
country - Awareness of the needs and expectations of the
different parties interested in international
operation - Awareness of the problems of family relations in
the host country
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Intermediate Result
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Adapted from Figure 146 A Model for the
Development of Multinational Managers
48Model for the Development of Multinational
Managers
Intermediate Result
- Predeparture training
- Orientation
- Area study
- Language instruction
- Cross-cultural group
- Behavioral simulation
- Case method
- Postarrival training
- Orientation training
- Intergroup problem solving
- Re-entry training
Return To Slide 44
Desired Result
BACK
NEXT
Adapted from Figure 146 A Model for the
Development of Multinational Managers
49Model for the Development of Multinational
Managers
Desired Result
How much development?
Development Method
Re-entry training
Desired Result
Effectiveness of the repatriated executives
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Continue to the next topic
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Adapted from Figure 146 A Model for the
Development of Multinational Managers
50Cross-Cultural Training Programs
- Major types of cross-cultural training programs
Environmental Briefings
- Provide information about things such as
geography, climate, housing, and schools
51Cross-Cultural Training Programs
- Major types of cross-cultural training programs
Environmental Briefings
- Familiarize the individual with cultural
institutions and value systems of the host country
Cultural Orientation
52Cross-Cultural Training Programs
- Major types of cross-cultural training programs
Environmental Briefings
- Programmed learning techniques designed to expose
members of one culture to some of the basic
concepts, attitudes, role perceptions, customs,
and values of another culture
Cultural Orientation
Cultural Assimilators
53Cross-Cultural Training Programs
- Major types of cross-cultural training programs
Environmental Briefings
- Provide information about things such as
geography, climate, housing, and schools
Cultural Orientation
Cultural Assimilators
Language Training
54Cross-Cultural Training Programs
- Major types of cross-cultural training programs
Environmental Briefings
- Develop attitudinal flexibility
Cultural Orientation
Cultural Assimilators
Language Training
Sensitivity Training
55Cross-Cultural Training Programs
- Major types of cross-cultural training programs
Environmental Briefings
- Send participant to the country of assignment to
undergo some of the emotional stress of living
and working with people from a different culture
Cultural Orientation
Cultural Assimilators
Language Training
Sensitivity Training
Field Experience
56Cross-Cultural Training Programs
- Steps in cross-cultural training programs
- Local instructors and a translator observe the
pilot training program or examine written
training materials - Educational designer debriefs the observation
with the translator, curriculum writer, and local
instructors - The group examines the structure and sequence,
ice breaker, and other materials to be used in
the training - The group collectively identifies stories,
metaphors, experiences, and examples in the
culture that fit into the new training program - The educational designer and curriculum writer
make necessary changes in training materials
- Send participant to the country of assignment to
undergo some of the emotional stress of living
and working with people from a different culture
57Cross-Cultural Training Programs
- A variety of other approaches can be used to
prepare managers for international assignments
including - Visits to the host country
- Briefings by host-country managers
- In-house management programs
- Training in local negotiation techniques
- Analysis of behavioral practices that have proven
most effective
- Send participant to the country of assignment to
undergo some of the emotional stress of living
and working with people from a different culture
58Contingency Approach to Cross-Cultural Training
Cross-Cultural Training Approach
Immersion Approach
Affective Approach
LOW Level of Rigor HIGH
Information Giving Approach
LOW MODERATE HIGH Degree of Integration
Adapted from Figure 147 A Contingency Approach
to Cross-Cultural Training
59Types of Training Programs
Global Leadership Development
- The Global Leadership Program (GLP)
- A consortium of leading U.S., European, and
Japanese firms, global faculty, and participating
host countries - Provide an intensive international experience
- Develop a global mindset
- Instill cross-cultural competency
- Provide an opportunity for global networking
60Tichy Development Matrix
Depth of Change
Adapted from Figure 148 The Tichy Development
Matrix
Deep High Risk Long Time Superfic
ial Low Risk Little Time
Required Approach Action Learning
Organization Individual Pair Team
Target of Change
Emerging Trend
Current Approach Old Way
61Case
- BPs Global Shift
- 1.Discuss John Brownes leadership style. How
would you characterize his approach to global
leadership? - 2.How much of an impact do you think BPs
marketing efforts will have on shareholder value?
- 3.Discuss the pros and cons of BPs strategy in
Russia, both short-term and long-term. - 4.Do you think Brownes initial plan to back the
U.S. governments proposal to open up the Arctic
Refuge in Alaska was a mistake? If so, why? - 5.Discuss the difficulties of simultaneously
securing growth and promoting social
responsibility for oil and gas firms. What are
the major challenges? - 6.Given BPs huge commitment to re-branding
itself as socially responsible, do you think
customers will believe this message from a
company that, by nature, contributes to
environmental pollution? What other
relationships/ associations could BP develop that
would be more credible? - 7.Do you view corporate social responsibility
initiatives as a barrier to entry for new oil and
gas concerns?