4 International Human Resource Management

8/8/2019 4 International Human Resource Management

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Recruiting and SelectingStaff for International

Assignments

Dr Subhash Gupta


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Dr Subhash Gupta 2

Objectives

We will address the following issues: The myth of the global manager

The debate surrounding expatriate failure

Factors moderating intent to stay or leave theinternational assignment

Selection criteria for international assignments

Dual-career couples

Gender issues


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Why international staffing?

Motives behind international staffing are of two types: Company motives

Fill- positions Management development Organizational development

Individual motives To gain new job experience. Better compensation. Sense of obligation to company. Possibility of advancement upon return. Improved life style abroad.

Exposure to new culture. To shoulder greater professional responsibility. Desire to escape from personal problems at home. Restricted career possibilities within parent company


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International recruitment: Some

issues Stereotypes, ignorance, assumptions and

general lack of cross-cultural competenciescan mean that the right people may not alwaysbe given the opportunities they deserve.

Equipping staff with the skills to be able toidentify and manage cross- cultural differencesin interviews is vital. Cross cultural differencesin areas such as body language,communication, self-presentation, gender, eyecontact, questioning and privacy can influencean intercultural interview


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Cross-cultural factors play a significant role while

recruiting abroad. Hiring the right people is a

tough task, particularly when they are located

thousands of miles away. Selectors need to be

trained in and sensitized to the candidatesculture. The cultural differences must be taken

into account while recruiting an individual.

Otherwise, good candidates may be rejected only

because of an unaware interviewer and hiringmanagers, and lack of effective communication

between the interviewer and interviewee

International recruitment: Some

issues


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Recruitment & Selection US favors open form of recruitments and selection

based on open and public advertisements, hiring isgenerally based on competence and qualifications

More traditional societies rely on social status, familybackground and ties, wealth, education, race,

religion, or connections to military or ruling elite Need to understand these factors

Collectivist societies also place emphasis onbackground factors such as family, school attended

etc. The major rationale is to find someone who will beloyal and fit the organization


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Some Country Examples

Korea backdoor recruitment role of highschool and university

Japan graduates from the two major publicand private universities dominate business andpublic leadership

Malaysia favor Malays over Chinese andIndian population bumiputra policy sons ofthe soil


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Research Evidence for Recruitment

More socialist countries (France, Norway,Spain, Slovenia etc.) when looking for jobs,

people prefer to use methods such as:registering with public agencies, asking friendsor relatives

More capitalist/individualist societies (US,

Australia, Japan) people prefer openadvertisements and applying directly for jobs


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Selection criteria and techniques

Tung (1981) has identified the following criteria that contribute to

success or failure of an expatriate and thus, need to be considered

while selecting them:

Technical competency

Personal attributes

Ability to cope with environmental variables

Family situation

Apart from the above-mentioned criteria, certain other criteria also

need to be considered in selection of expatriates: Country- specific requirements

Company-specific requirement

Language


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Factors in Expatriate Selection


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Mendenhall and Oddous Model

Self-oriented dimension

Perceptual dimension

Others-oriented dimension

Cultural-toughness dimension


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The self-oriented dimension reflects the degree to

which the expatriate expresses an adaptive concern for

self-preservation, self-enjoyment, and mental hygiene.

The perceptual dimension reflects the expertise the

expatriate possesses in accurately understanding why

host nationals behave the way they do.

The others-oriented dimension reflects the degree towhich the expatriate is concerned about host-national

co-workers and desires to affiliate with them.

The cultural-toughness dimension reflects a mediating

variable that recognizes that acculturation is affected by

the degree to which the culture of the host country is

incongruent with that of the home country.


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Using Traits and Personality Tests to

Predict Expatriate Success

Although some tests may be useful in suggestingpotential problems, there may be little correlationbetween test scores and performance

Most of the tests have been devised in the United

States, thus culture-bound In some countries, there is controversy about the

use of psychological tests ( different pattern ofusage across countries)

Use of personality traits to predict interculturalcompetence is complicated by the fact thatpersonality traits are not defined and evaluated insimilar way in different cultures


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The global manager

Myth 1: There is a universal approach tomanagement.

Myth 2: People can acquire multicultural

adaptability and behaviors.Myth 3: There are common characteristics

shared by successful internationalmanagers.

Myth 4: There are no impediments to mobility.


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Review: Roles & Tasks of

International Management

Top Management Provide direction

Leverage corporate performance

Ensure continual renewal

Global Business Manager Worldwide business strategist

Architect of asset and resource configurationCross border coordinator

Worldwide FunctionalManager

Worldwide intelligence scanner

Cross pollinator of best practices

Champion of transnational innovation

Geographic SubsidiaryManager (Country Manager)

National defender and advocate

Frontline implementer of corporate strategy

Bicultural interpreter


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Skills of a Global Manager

Ability to seize strategic opportunities

Ability to manage highly decentralized

organizations Awareness of global issues

Sensitivity to issues of diversity

Competence in interpersonal relations Skill in building a community


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The Employment Relationship

The nature of the employment relationship Relational: broad, open-ended and long-term

obligations

Transactional: specific short-term monetizedobligations

The condition of the relationship Intact: when employee considers there has

been fair treatment, reciprocal trust

Violated: provoked by belief organization hasnot fulfilled its obligations


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The Dynamics of the Employment

Relationship


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Likelihood of Exit


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Organizational Commitment

Affective component Employees attachment to, identification with

and involvement in, the organization

Continuance component Based on assessed costs associated with

exiting the organization

Normative component Employees feelings of obligation to remain


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Why consider the psychological

contract?

Nature, location and duration of aninternational assignment may provokeintense, individual reactions to perceived

violations Expatriates tend to have broad, elaborate,

employment relationships with greater

emphasis on relational nature Expectations and promises underpin this

relationship


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Current Expatriate Profile

Category PCN (42%) HCN (16%) TCN (42%)

Gender

Age (Yrs)

Marital status

Male (82%)

30-49 (60%)

Married (65%)

Female (18%)

20-29 (17%)

Single (26%)

Partner (9%)

Accompanied by

Duration

Location

Primary reasonPrior international experience

Spouse (86%)

1-3 years (52%)

Europe (35%)

Fill a position30%

Children (59%)

Short-term (9%)

Asia-Pacific (24%)

Source: based on data from global Relocation Trends: 2002 Survey Report, GMAC Global Relocation Services,National Foreign Trade Council and SHRM Global Forum, GMAC-GRS 2003.


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Expatriate Failure

Definition: Premature return of an expatriate

Under-performance during an internationalassignment

Retention upon completion


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Definition offailure includes other aspects,e.g. under-performance during an international assignment

Inability to cope with larger responsibility

Lack of technical competence

Lack of motivation for overseas assignment; willingness tomove

Lack of emotional maturity, personality or persons intentions

Failure to adjust to the foreign culture over time; initialrejection may stick

Length of assignment

Psychological contract

Reasons for Expatriate Failure


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Reason for Expatriate Failure

US Firms

Inability of spouse toadjust

Managers inability to

adjust

Other family problems

Managers personal oremotional immaturity

Inability to cope withlarger overseasresponsibilities

US Firms

Inability of spouse toadjust

Managers inability to

adjustOther family problems

Managers personal oremotional immaturity

Inability to cope withlarger overseasresponsibilities

Japanese Firms Inability to cope with

larger overseasresponsibilities

Difficulties with the newenvironment Personal or emotional

problems Lack of technical

competence Inability of spouse to

adjust

Japanese Firms Inability to cope with

larger overseasresponsibilities

Difficulties with the newenvironment Personal or emotional

problems Lack of technical

competence Inability of spouse to

adjust

European Multinationals: Inability of spouse to adjust.


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Reasons for Expatriate Failure

Nine (9) of ten (10) expatriate failures are family-related

Unhappy spouses is a major reason for early return

Inability of spouse / partner to adjust Other family related problems

Dissatisfaction with quality of life overseas

Inadequate cultural and language preparation

Inadequate support for employee and/or family

Company lose a million-dollar corporate-training

investment in the executive


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Costs of Expatriate Failure

Direct costs: Airfares

Associated

relocation expenses Salary and benefits

Training anddevelopment

Averaged $250,000per early return

Costs varyaccording to: Level of position

Country ofdestination

Exchange rates

Whether failed

manager is replacedby anotherexpatriate


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Indirect Cost of Expatriate Failure

Damaged relationships with keystakeholders in the foreign location

Negative effects on local staffPoor labor relationsNegative effects on expatriate

concerned

Family relationships may be affectedLoss of market share


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Expatriate failure:

Expatriates families and spouses face isolation, loneliness and

boredom in the new country and suffer from emotional and physical

problems.

Reward package is not sufficient to survive and maintain life style.

In host countries, expatriates have to face uncertainties, relate with

people with different culture, values and beliefs.

Conflicting goals between the parent company, subsidiary or the

joint venture company result in to role conflict.

Culture shock

Inadequate career support and repatriation plan.

Lack of support from headquarters.


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Causes of Expatriate Assignment Failure


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The Phases of Cultural Adjustment


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Phases of Cultural Adjustment:

Effects of Culture Shock on Adjustment

6

5.5

2.5

2

0

7

0-2 3-4 4-6 6-9 10-12 13-24 25-36 46-48 49+

Time in Months

D

egreeofAdj us

tment

Phase 1:

Tourist /

Honeymoon

Phase 2:

Crisis /

Culture Shock May Exit?

Phase 3:Pulling Up /

Adjustment

Phase 4:

Mastery

See Turnover /See Turnover /Failure Rate:Failure Rate:

Shock effectShock effect??


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Expatriate Adjustment Stages

Source: GMAC Relocation Services, used with permission.


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The Phases of Adjustment

The U-Curve is not normative

The time period involved varies betweenindividuals

The U-Curve does not explain how and whypeople move through the various phases

It may be more cyclical than a U-Curve

Needs to consider repatriation

EXPATRIATES CULTURAL SHOCK


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EXPATRIATES CULTURAL SHOCK

PHYSICALDIFFERENCES

CULTURAL

DIFFERENCESLEVEL OF

DISORIENTATIONSTRESSUNEASE

REACTIONS

FLIGHT ACCEPT GOES NATIVEFIGHT

reject retreat insulate

hostilitydisgustdisaprove

interestedlook for contactslearn about culture

enthusiastadapt local practicefood, dress, style

local companion

THELOCALIZED

EXPAT

THECOSMOPOLITAN

EXPAT

THECOLONIALIST


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Factors Moderating Expatriate

Performance

Inability to adjust to the foreign culture

Length of assignment

Willingness to move Work-related factors

Psychological contract/employmentrelationship


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International Assignments: Factors

Moderating Performance


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Transfer archetypes

Free agents:

41% expatriates fall in this type Allegiance to host country firm is low

Allegiance to parent firm is low Flexible, innovative and adventurous

This type of expatriates can be further divided into two sub-

categories Hired gun free agent

Plateaued-career free agent


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The Dual Allegiance of ExpatriateThe Dual Allegiance of Expatriate

ManagersManagers

Allegianceto local firm

Expatriates who

see themselvesas

Free Agents

Expatriates who

Go Native

Expatriates whosee themselves

as

Dual Citizens

Expatriates who

leave theirHearts at

Home

Allegiance to parent firmLow

Low

High

High

Source: Black & Gregersen (1992). Serving two masters: Managing the dualallegiance of expatriate employees. Sloan Management Review, 34, 61-71.

The Dual Allegiance of Expatriate ManagersThe Dual Allegiance of Expatriate Managers


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Dr Subhash Gupta 40Source: Black & Gregersen (1992). Serving two masters. Sloan Management Review, 34, 61-71.

Requires serious thought and commitmentfrom the company to develop into dual

citizen Are a rare breed and are attractive toother firms who may try to steal themaway

Adjust well and quickly to local culture

Usually effective in local environment

Facilitates the coordination of globalinitiatives

Responsive to directives from head-quarters

Dual Citizen

Adjusts poorly and slowly to local cultureand environment

Likely to inappropriately implementdirectives from the parent organization

Quick to implement directives fromheadquarters

More likely to stay with firm afterrepatriation

Heart at

Home

May fight global initiatives

May be slow to implement directives fromheadquarters

Likely to leave firm after repatriation

Adjust well and quickly to local culture

Usually effective in local environment,including interactions with employees,customers, suppliers, etc.

Go

native

Often leave with little warning

Replacement costs may be significant

May serve self-interests more thancompany interests

Often have superior international capa-bilities (e.g., language, negotiation)

Often somewhat less costly than traditionalexpatriates

Free Agent

ConsProsPattern


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Heart at home 12% expatriates fall in this type Allegiance to host country firm is low

Allegiance to parent firm is high Committed towards the company Determined to achieve the target

Going native 15% expatriates fall in this type Allegiance to host country firm is high Allegiance to parent firm is low Empathetic towards host country culture Willing to communicate and mix with local people

Dual citizens 32% expatriates fall in this type Allegiance to host country firm is high Allegiance to parent firm is high Open-minded and goal-oriented


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The above-mentioned typology clearly indicates the following:

Dual citizens are most effective and committed. They are most

effective in balancing the job demands with role clarity.

An expatriate, over-committed to home organization (heart at

home), will have difficulty to adopt the host country practices and

will not be able to manage host country managers, effectively.

If an expatriate is over-committed to the host country organization

(going native), overall integration, coordination and control

becomes difficult within the MNC.

The largest group of expatriates falls into the category of free

agents, who have low commitment for both the host and home

country organizations.


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Solutions to the Dual-career Challenge

Alternative assignment arrangements Short-term Commuter

Other (e.g. unaccompanied, business travel,virtual assignments)

Family-friendly policies Inter-company networking Job-hunting assistance Intra-company employment On-assignment career support

i l ki


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Barriers to Females Taking

International Assignments

External Barrier Self-established Barriers

HR managers reluctant to

select female candidates

Culturally tough locations or

regions preclude female

expatriates

Those selecting expatriates

have stereotypes in theirminds that influence decisions

Some women have limited

willingness to relocate

The dual-career couple

Women are often a barrier to

their own careers by behaving

according to gender based

role models.


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Summary

Four myths related to the concept of a globalmanager

The debate surrounding the definition and

magnitude of expatriate failure.(cont.)

Key issues affecting recruitment and selection

for international assignments. We have covered:


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Summary(cont.)

Cultural adjustment and other moderating factorsaffecting expatriate intent to stay and performance.

Individual and situational factors to be considered inthe selection decision.

Evaluation of the common criteria used revealed thedifficulty of selecting the right candidate for aninternational assignment and the importance ofincluding family considerations in the selection

process.(cont.)


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Summary(cont.)

Dual-career couples as a barrier to staff mobility,and the techniques that multinationals are utilizingto overcome this constraint.

Female expatriates and whether they face different

issues to their male counterparts.

It is clear that, while our appreciation of the issues surrounding

expatriate recruitment and selection has deepened in the past 20 years,

much remains to be explored.

The field is dominated by US research into predominantly US samplesof expatriates, although there has been an upsurge in interest from

European academics and practitioners.


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Summary

It is also apparent that staff selection remains critical.Finding the right people to fill positions, particularlykey managers whether PCN, TCN or HCN candetermine international expansion.

However, effective recruitment and selection are onlythe first step.

We will explore in the next chapter that maintainingand retaining productive staff are equally important.


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Summary

Corporate philosophy on recruiting and selection

Selection criteria and issues of concern

Local and home countries policies on foreign labor

Variations in national labor law and labor markets Inter-company networking

Intra-company arrangement

Career assistance programs

Training and continuous adaptation


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Summary (cont.)

Will the factors affecting the selection decision be similar for

multinationals emerging from countries such as China and

India?If more multinationals are to encourage subsidiary staff to

consider international assignments as part of an intra-organizational network approach to management, we will need

further understanding of how valid the issues discussed in this

chapter are for all categories of staff from different country

locations.

Documents

4 International Human Resource Management