Major Alternative Staffing Approaches for international operations

1) What are the major alternative staffing approaches for international operations? Explain the relative advantages of each and the conditions under which you would choose one approach over the other.

a) ethnocentric staffing approach- Parent-country nationals, or people from the home country of the corporation are employed to fill key managerial positions because they are familiar with the goals, policies and procedures, technology and products of the parent company. They are in a much better position to report to the company, especially where there is an inadequacy of managerial skills at the local level. It is the preferred method with a centralized approach to globalization.

b) polycentric staffing approach- HCNs, or host country nationals are hired to fill key positions. This is more effective in a multinational approach when a company wants to act “local.” People in and outside the subsidiary will more readily accept this system. This approach provides a role model for upwardly mobile personnel. It is also usually less expensive to hire locals who are more instrumental in dealing with problems as they arise. There is, however, difficulty with this approach in the areas of coordinating goals between the main and regional offices and the conflicting loyalties of a host country national .

c) global staffing approach- Managers are chosen from within and outside the company, regardless of nationality. This approach provides a greater pool of highly qualified and willing applicants who bring with them cultural adaptability such as language skills. They are an accepted compromise between headquarters and the local region. It can be a cost-effective measure according to the home country’s rate of pay.

d) Regiocentric staffing approach- Recruits are from the region. This approach can result in a mix of host country nationals, transpatriates, and parent country nationals.

In a poor country, which respects authority, I would place PCNs in positions of management. In countries similar to my own, I would trust there to be HCNs to handle the job adequately and more cheaply. For a country with uncertain politics, I would begin with PCNs and gradually change to HCNs.

2) Why is the HRM role so much more complex, and important, in the international context?

Of all the resources of international corporations, the human resource has control over all the others, which include technology, capital, raw material and information. Whereas the latter can be duplicated, humans cannot. This critical resource, therefore, can be the competitive edge in the marketplace. HRMs have to accommodate the many differences in cultures involved with the globalization of companies, using data highways to keep track of the myriad concerns of their employees, from compensation, staffing, management, and training. The different laws, cultures, business practices, and technological limitations in certain countries have to be considered.

3) Explain the common causes of expatriate failure. What are the major success factors for expatriates? Explain the role and importance of each.

Reasons for expatriate failure include the following:

a) poor preparation and planning for the entry and reentry transitions of manager and his or her family

b) selection based on needs of headquarters rather than the assignment

c) alienation or lack of support from headquarters

d) inability to adapt to local environment

e) family unhappiness

f) insufficient compensation and financial support

g) poor programs for career and repatriation.

The major success factors for expatriates are adequate cultural training, language instruction, and familiarity with everyday matters. In cross-cultural training, the expatriate learns both the content and skills that would improve interaction with individuals in the host country. This also reduces culture shock. Language instruction ensures that the expatriate is able to communicate with and therefore interact more positively with the locals. They receive sensitivity training to assure that they do not impinge on the social customs of the host country. These are major considerations in that they help the expatriate to become an integral and therefore efficient part of his or her new environment.

4) What are the common training techniques for managers going overseas? How should these vary as appropriate to the level of globalization of the firm?

Common training techniques include:

a) area studies

b) cultural assimilators

c) language training

d) sensitivity training

e) field experiences

These would be appropriate to those countries that send more parent country nationals overseas. If they hire host country nationals to manage their operations, then the above training techniques are not as applicable.

5) Explain the balance sheet approach to international compensation packages. Why is this approach so important? Discuss the pros and cons of aligning the expatriate compensation package with the host-country colleagues compared to the home-country colleagues.

The balance sheet approach is used to compensate expatriate managers by equalizing the standard of living between the host country and the home country and to add compensation for inconvenience or qualitative loss. MNCs have to weigh the many aspects of a complete compensation package to affect a tax equalization policy. Some countries have begun to base their compensation packages toward achieving a standard of living comparable to that of the host country managers.