International Human Resource Management

BUS-1-08-MB

Chapter 8 Composing an International Staff

Prepared by: hiew First Prepared on: 31-01-05 Last Modified on: xx-xx-xx Quality checked by: hkp Copyright 2004 Asia Pacific Institute of Information Technology

Topic & Structure of the lesson

Ethical and Social Issues

Learning Outcomes Analyse the challenges associated with composing international staff Understand the different staffing policies Review the strategic perspective on international transfers and look at the underlying motives that MNCs have to send out expatriates Understand the recruitment and selection issues associated with expartriation

MB

Slide 2 of 19

Staffing Policies
Ethical and Social Issues

- Perlmutters classic study that identified three different international orientations: namely ethnocentric, polycentric & geocentric - MNCs following ethnocentric staffing policy would appoint mostly parent country nationals to top positions at their subsidiaries
MB Slide 3 of 19

Ethical and Social Issues

* MNCs following a polycentric staffing policy would prefer to appoint host country nationals. Whereas geocentric staffing policy would simply appoint the best person regardless his/her nationality & that would include third country nationals In a later publication Heenan & Perlmutter defined a 4th approach which they called regiocentric
MB Slide 4 of 19

Staffing Policies
Ethical and Social Issues

In this approach, managers are moved on a regional basis, such as within Europe The term expatriation is used to describe the process of international transfer of managers

MB

Slide 5 of 19

Factors Influencing the choice between HCNs and Ethical PCNs and Social Issues
Parent country characteristics: a) Have a high tendency to employ PCNs as managing directors for their subsidiaries b) In these cultures, there is a strong preference to be in control c) Managers are expected to be experts in their field and are generally selected based on seniority
MB Slide 6 of 19

Ethical and Social Issues

d) Direct control of subsidiary operations will also be more important if the level of cultural distance between home and host country is high e) HQ managers will prefer to have at least some home country managers in important positions to facilitate information flows

MB

Slide 7 of 19

Ethical and Social Issues

Host Country characteristics: a) MNCs are more likely to employ PCNs when the level of education in host country is low b) Speed and clarity in communication allowed by the use of PCNs c) Age of the establishment MNCs may have difficulty in attracting high caliber locals in recently established subsidiaries

MB

Slide 8 of 19

Motives for International Transfers Edstrom & Galbraiths typology Ethical and Social Issues
3 general company motives for making international transfers: 1) Fill positions which concerns the transfer of technical & managerial knowledge. Expatriates are seen as a key bearers of tacit knowledge 2) Management development transfer gives the manager international experience & develops him/her for future important tasks in subsidiaries abroad or parent company

MB

Slide 9 of 19

Ethical and Social Issues

3) The final goal is not individual development but organisation development this motive consists of two elements: socialisation of both expatriates & local managers into the corporate culture & the creation of a verbal information network that provides links between subsidiaries & HQ

MB

Slide 10 of 19

Question and Answer Session

Ethical and Social Issues

Q&A
MB Slide 11 of 19