International Human Resources

Spring
2015
Major:
International Business
Module:
International Human Resources

Management (I HRM)
Prof. Dr. Arnd Gottschalk
Human Resource Management, Organizational Behavior & Leadership

University of Applied Sciences Wrzburg-Schweinfurt
Faculty of Business Administration
Mnzstrae 12
97070 Wrzburg, Germany
Phone
0931/3511-8134
Fax
0931/3511-328
arnd.gottschalk@fhws.de
www.fh-wuerzburg.de/fbw
COURSE CALENDAR HUMAN RESOURCE MANAGEMENT

SPRING TERM 2015
COURSE
SESSION (DATE)
1
May, 21st. 2015
3.15 pm 7-30 pm
June, 13th. 2015

9.00am 5.30 pm
June, 18th. 2015
3.15 pm 7-30 pm
June, 25th. 2015
3.15 pm 7-30 pm
July, 2nd. 2015
3.15 pm 7-30 pm
HRS
LECTURE TOPIC
! Introduction
! Comparative IHRM Operating in Other
Regions and Countries

! Case Study Preparation
10
! Case Study Strategic IHR
! Talent Management
! International Training and
Management Development
! International Employment Law, Labor

! International Employee Relations
! International Performance
Management
! Managing Engagement
! Compensation & Benefits
TEXT CHAPTERS
! Chapter 2 Strategic International Human Resource
Management
! Chapter 14 Comparative IHRM Operating in Other Regions
and Countries
! Chapter 8 International Workforce Planning and Staffing

! Chapter 9 International Recruitment, Selection, and
Repatriation
! Chapter 10 International Training and Management
Development
! Reader: Global Talent Risk
! Chapter 6 International Employment Law, Labor Standards,
Prof. A Gottschalk
and Ethics
! Chapter 7 International Employee Relations
! Chapter 12 International Employee Performance
Management
2015 Prof. Dr. Arnd Gottschalk
Major : International Business

Module: International Human Resource Management
GLOBAL STAFFING & ASSIGNMENTS

Prof. A Gottschalk

Many organizations now

operate across a
INTERNATIONAL STAFFING STRATEGIES
number of different
countries
All of their subsidiaries
have to be managed
and operated
Organizations can take
different approaches to
how they will manage
their employees across
different subsidiaries
! Ethnocentric
Tendency to hire
from the HQ
country and send
employees on
international
assignment to the
subsidiaries
Ethnocentric
staffing
Polycentric
staffing
Regiocentric
staffing
Geocentric
staffing
Preference to
use locals
from the
subsidiary
country
! Polycentric
! Geocentric
Favor using
people from
the region
Source talent
from anywhere
in the world
Prof. A Gottschalk

ETHNOCENTRIC APPROACH
The characteristics of an ethnocentric approach are:
! Home country oriented

! Managers tend to be from the home country (Headquarters of the
organization)
! Home country policies and practices are likely to be used in the subsidiaries
! Knowledge from the home country is seen as the most useful
! The organization tries to replicate the corporate culture
! Consistency is gained across subsidiaries
Prof. A Gottschalk
! Economies of scale may be gained as subsidiaries follow the same recipie

POLYCENTRIC APPROACH
The characteristics of a polycentric approach are:
! Centres around the host country

! Host country nationals will usually fill management positions
! Managers usually report to the parent country (Headquarters) but have autonomy to
make decisions
! There is not an exact corporate culture

! HR policies and procedures are usually adapted from the parent company (HQ) so
that they are more in line with requirements of the subsidiary (and the context in
which it is situated)
! Limited controls/interventions from parent company

! Fewer language and cultural barriers
Prof. A Gottschalk

GEOCENTRIC APPROACH
The characteristics of a geocentric approach are:
! Looks for the best person for a specific job, regardless of nationality
! Managers usually have previous international management experience
! Has a more collaborative approach between the parent company and its
subsidiaries
! Communication is a more two way and interactive process

! Facilitates the development of an international team of employees
! Aims to develop the best people
Prof. A Gottschalk

TYPES OF STAFF
! Parent country nationals (PCNs)

! Are employees from the country in which the organization is based
(Headquarters)
! Host country nationals (HCNs)

! Are employees from the country in which the subsidiary is based i.e. A French
person working in an organization based in France
! Third country nationals (TCNs)

Prof. A Gottschalk
! Are employees who are working in a different country (i.e. Not a PCN or TCN)

ADVANTAGES AND DISADVANTAGES OF PCNS
Prof. A Gottschalk

Source: Harzing and Van Ruysseveldt (2007:254)
ADVANTAGES AND DISADVANTAGES OF HCNS
Prof. A Gottschalk

10
ADVANTAGES AND DISADVANTAGES OF TCNS
Prof. A Gottschalk

11
DETAILED MEASURES OF INTERNATIONAL HUMAN

RESOURCES STRATEGIES
I-HR Strategy
Ethnocentric
Polycentric
Geocentric
Regiocentric
I-HR Strategy
I-HR Strategy
I-HR Strategy
I-HR Strategy
Market
Characteristics
International industry
no homogenuous market
not promising to follow
local conditions
Multinational industry
no homogenuous market
Necessity to follow local
conditions
Global industries
homogenuous markets
not promising to follow
local conditions
Regional Mix
Market mix
Regional HQ
Corporate Center
Required Type
of Manager
> Comany Manager <

Self confident, ability to
integrate himself and to
work with local staff
> Country Manager <

Knowledge about host
country and its economic;
masters local culture
> Global Manager <

Intercultural competencies;
autonomous, ambiguitiy,
stressresistent,
> Regio Manager <

Knowledge about host
region and its economic;
masters regional culture
Origin of
Employees /
Staffing
Strategy
Mother Country
+ no distance to CC / HQ
- High cost
- Limitates carreers of locals
Host Country
+ acceptance; low cost
- Communication to CC/HQ
- Loyality; training invest
Mother, Host or other

country
+ promotion of corp. culture
- Very high cost; acceptance
Expat preparation courses

Intercultural training
Trainee program
Local programs
New tasks in mother
company
Matrix projects
Job Rotation
International Trainee
Programs
Job Rotation
Regiocentric Trainee
Programs
Expatriation
Job rotation within host

country
Carreer Paths on local
level
Global Job Rotation

Carreer Paths for Global
Managers
Regional Job Rotation

Carreer Paths for regional
Managers
Training
Strategy
Carreer
Planning
appropriate mix
Prof. A Gottschalk

12
INTERNATIONAL HUMAN RESOURCE MANAGEMENT
INTERNATIONAL ASSIGNMENTS (AI)
OVERVIEW
Prof. A Gottschalk

13
FOCUSING ON THE USE OF EXPATRIATES
! Expatriates are employees who go to work in another country

! They can either work for the organization already in their home country or can be recruited
externally
! Their assignments can vary in length and purpose. From short visits of days/weeks to longer
terms of months/years
! The cost of using expatriates is high so it is essential that they are carefully selected and
developed
! Effective pre-departure training is essential to support the employee to adapt to a new culture
and country as well as a new job
Prof. A Gottschalk

SHRM 2007
14
KEY ISSUES IN DEALING WITH EXPATRIATES
! Reporting structures in home and host country

! Where are the key decisions made?
! How will their performance be managed?
! How can they be supported and developed?
! Understanding the importance of culture
! Dealing with problems
! How will the HCNs respond to them?
Prof. A Gottschalk

SHRM 2007
15
International
Assignee
WHY INTERNATIONAL ASSIGNMENTS
Refers to the process

of moving any
employee from one
Purpose(s) of Assignments
country to another
for a period of more
than one year
As organizations
become more global,
they develop a need
for international
managers with
greater international
experience
Demand-Driven
Purposes include using IAs as
general managers or directors
for subsidiary start-ups and to
roll-out new products;
for technology transfer;
to solve problems;
to perform functional tasks
such as accounting, sales,
and manufacturing; and
for organizational control.
Learning-Driven
The learning-driven purposes
include
management development,
transfer of knowledge and
the socialization of locals into
the corporate culture and
values
Prof. A Gottschalk

16
Possible Candidate
Selection Factors:
Maturity
Ability to handle foreign
languages
Positive attitude and

outlook on the assignment
Appropriate personal
characteristics
INTERNATIONAL FUNCTIONS AND

ASSIGNMENTS
! Types of International Employees:
Parent country nationals (PCNs)
Host country nationals (HCNs)
Third country nationals (TCNs)
! Expatriates
PCNs who have worked for more that one year in a foreign
subsidiary of their MNE
! Repatriates
Expatriates PCNs who have returned to their home country
Prof. A Gottschalk
! Inpatriates
Employees (HCNs or TCNs) who have relocated to a company

location in the parent companys headquarters home country

17
FOCUS ON EXPATRIATES
! It is important to choose the right person for the job as expatriates are expensive for
organizations
! There are many implications of expatiate failure, including:

! Replacement cost (selection, training, salary)
! Disruption to the organization
! Possible reduction in productivity
! Negative impact on relationship with customers and suppliers
! Negative impact on the morale of colleagues
! The impact on the failed expatriate may find it difficult to get another job in the
organization

Prof. A Gottschalk
SHRM 2007
18
RECRUITING EXPATRIATES
! Organizations can choose to do this internally, externally or both
! For management positions, many organizations look internally
! The process may be open to all employees or closed to a selected number of candidates
! The process involved may be formal or informal
! Some organizations are out-sourcing part of this process to provide more objectivity
Prof. A Gottschalk

SHRM 2007
19
SELECTING EXPATRIATES
! A variety of methods can be used:
! Interviews
! Formal
! Informal
! Computer-based tests
! Simulations which help the candidates to understand the environment they would be working in this
may help to avoid culture shock
! Role-plays
! Group activities
! Practical tasks
! Communication-based tests

Prof. A Gottschalk
SHRM 2007
20
TOPICS FOR SELECTION ACTIVITIES

! What sort of subjects should be covered?
! Technical competence
! Language skills (if appropriate)
! Cultural adaptability
! Communication skills
! Ability to work in different environments
! Relational abilities the ability of the individual to deal effectively with his/her superiors, peers,
subordinates, business associates and clients (Harzing
and Van Ruysseveldt, 2007:268)
! Problem-solving ability
! Awareness of issues involved in international management
Prof. A Gottschalk

SHRM 2007
21
WHY DO EXPATRIATES FAIL?

! They can not adjust to the culture of the new country
! Their partners or children can not settle into the new country
! The working environment may be very different to what the expatriate is used to
! They are unable to fit into the culture of the organization
! They underestimated the challenges involved
! The task that they were given was unachievable
! External factors
Prof. A Gottschalk

SHRM 2007
22
INTERNATIONAL HUMAN RESOURCE MANAGEMENT
INTERNATIONAL ASSIGNMENTS (AI)
OVERVIEW
Prof. A Gottschalk

23
Critical Selection Criteria

for International
SUCCESSFUL INTERNATIONAL ASSIGNEE

EXPERIENCE
Assignments
1. Job Suitability
2. Cultural Adaptability
3. Desire for Foreign
Assignment
Prof. A Gottschalk

Source Briscoe, D. R. and Gazda, G. M. (1989), The successful expatriate, Proceedings: Managing in the Global
Economy, third biannual international conference, Eastern Academy of Management, Hong Kong, November.
24
Expatriates are
employees who go to
work in another country
FOCUSING ON THE USE OF EXPATRIATES
They can either work for

the organization already
in their home country or
can be recruited
externally
Their assignments can
vary in length and
Business Travel
<= 3 months
Short Term Assignment
< 1 year
Expatriation
2-5 years
Permanent
unlimited
purpose. From short

visits of days/weeks to
longer terms of months/
years
The cost of using
expatriates is high so it
is essential that they are
carefully selected and
developed
Effective pre-departure
training is essential to
support the employee to
adapt to a new culture
and country as well as
a new job
Prof. A Gottschalk

25
Reporting structures
in home and host
country
Where are the key
KEY ISSUES IN DEALING WITH EXPATRIATES
decisions made?
How will their

performance be
managed?
How can they be

supported and
developed?
Understanding the
importance of culture
Dealing with problems

How will the HCNs
respond to them?
! 18% of all Expats are sent for Development Reasons

! 32% are among the Top Performers
! Average Time abroad is 29 months
! Average Cost: US$ 310918 per year
! 25-40% leave the company within 12 months after return
! 24% are promoted within 12 months
! 10% even face a demotion
! But:
Attrition Rate after 12th to 36th months is lower than within
Source: PwC Study on Expatriate Management, based on nine
international
companies with 3400 Expats
peer
group
Prof. A Gottschalk

26
Typical benefits for

Expatriates
REWARDING EXPATRIATES
" Allowance for
More aspects to be considered:
business and
professional
membership
" Allowance for club
" Insurances
Gross salary
memberships
" Company-provided
automobile
" Company-provided
./. Hypothetical taxes (country average)

= Net income (host country)
" Payment for time not worked
" Company" Removal allowance

" Assumption of
language training
" Allowance for house

keeping
" ...
" Retirement
Retirement plans; Pension fund
housing
subsidized travel
Insurance for unemployment;

Health Care / Insurance; Disability
insurance
+ Net difference cost or housing
" Employee services
+ Net difference training expenses
" relocation benefits,
= disposale income (host country)
" childcare,
" Educational assistance,
" food services
Prof.
A
Gottschalk
" financialservices (e.g. loans)
"

27
International assignment
failure can also be
INTERNATIONAL ASSIGNMENT FAILURES
defined in terms of:
Poor overall performance

in the foreign assignment
Personal dissatisfaction
with the experience
Lack of adjustment to local

conditions
Types of
Failures
Lack of acceptance by
local nationals
The inability to identify and

train a local successor
Dropout
Brownout
Turnover
Prof. A Gottschalk

28
GLOBAL TALENT MANAGEMENT
STRATEGIES TO AVOID EXPATRIATION RISKS
Prof. A Gottschalk

29
REASONS FOR EXPATRIATE FAILURE

Inability of spouse/partner to adjust or spouse/partner dissatisfaction
Inability of expatriate to adjust
Other family-related problems
Mistake in candidate/expatriate selection or just does not meet expectations
Expatriates personality or lack of emotional maturity
Expatriates inability to cope with larger responsibilities of overseas work
Expatriates lack of technical competence
Expatriates lack of motivation to work overseas
Dissatisfaction with quality of life in foreign assignment
Dissatisfaction with compensation and benefits
Inadequate cultural and language preparation
Prof. A Gottschalk
Inadequate support for IA and family while on overseas assignment

Sources adapted from National Foreign Trade Council (NFTC), Society for Human Resource Management (SHRM), and
GMAC Global Relocation Services (GMAC GRS)/Windham International Global Relocation Trends Annual Survey
Reports, 19932007; Stroh, L. K., Black, J. S., Mendenhall, M. E. and Gregersen, H. B. (2005), International
Assignments: An Integration of Strategy, Research, & Practice, Mahwah, NJ/London: Erlbaum; and Tung, R. L. (1987),
Expatriate assignments: Enhancing success and minimizing failure, Academy of Management Executive, 1 (2): 117
126.
30
Challenges to
successful staffing
with IAs:
STRATEGIES TO MINIMIZE RISK OF

EXPATRIATION
! Trailing spouses or
partners
! Language
! Women expatriates
Companys International Strategy
! Lifestyle
! Localization or
going native
Objectives of Expatriation
! Career development
! Costs of
international
assignments
! Inpatriation

Preventive measures to
reduce the total amount
of expatriates of
companies in general.
Measures for successful

reintegration of
expatriations.
Prof. A Gottschalk
Source: Khlmann, T. (2004), p.91f
31
At the end of the

assignment, the IA
! Repatriates to the
home country
! Redeployed to
another country
EFFECTIVE REPATRIATION STARTS BEFORE

DEPARTURE
Three Phase Repatriation Model starting at the beginning of an
international assignment
! Becomes localized
in the host country
Repatriation programs
need to adress and
manage Expats
Phase 1:
Phase 2:
Phase 3:
disconnectedness and
uncertainty with regard
Clarify Expectations
Prior to Assignment
Maintain
Contact &
Communication
During Assignment
Provide
Support
and Recognition
upon Return
to assignment and
return. Ineffective
management creates
dissatisfaction and high
turnover.
The IAs should stay
with the organization
long enough to share
their experiences
Prof. A Gottschalk
The move back home can be more difficult than the original move abroad

32
PHASE 1: EXPECTATIONS MANAGEMENT
! Establish and communicate Expatriation and Repatriation Policies and
Guidelines
! Explain Job Expectations and Responsibilities
! Provide formal Career Counseling:
!How does the overseas assignment fit with the goals of the company?
!What are the expectations towards the expatriates contribution?
!How can skills and experience acquired translate into career enhancement
after return?
!What positions can/will be offered in the home office based on overseas
experience?
Prof. A Gottschalk
Prof. Dr. A. Gottschalk
2013
Major : International
Business
Course:
IBWResource
/ Module:
International Human Resource Management
Module: International
Human
Management
33
33
PHASE 2: ONGOING COMMUNICATION AND MENTORING
! Regular communication between mentor and Expat as well as line
manager and Expat in both home and host country, if applicable

! Meetings for recent repatriates and Expats to share experience and
cultivate a network
! Use of regular business trips to home office to maintain contact with
ongoing changes and networks
! Monthly Repatriation Report by HR to remind mentors and senior
managers who is scheduled for repatriation and to keep them in mind for
job vacancies
Prof. A Gottschalk
2013
Business
Course:
IBWResource
/ Module:
Human
Management
34
34
PHASE 3: PROVIDE SUPPORT AND RECOGNITION
Nine to Six Months

Prior to Return
Zero to Six Months

Prior to Return
Step 1: Contact with Expatriate HR (International Mobility) contacts

Expatriate to discuss expectations for repatriation
Step 2: Consultation with Line Management and HR HR contacts home
and host line management and local HR to get recommendations
regarding future career path
Step 3: Reintegration LOI Expat receives a reintegration letter by
corporate HR and line manager. LOI details end of assignment, noew job
title and position upon return and salary
Step 4: Administrative Issues All administrative issues for repatriation,
tax, social security, move, etc.
Prof. A Gottschalk
After Return
Step 5: Evaluation of Repatriation Process Expat and HR department

evaluate the transfer process and expatriates integration into the (new)
work environment.
2013
Business
Course:
IBWResource
/ Module:
Human
Management
35
35
MINIMIZING RISK OF EXPATRIATE TURNOVER
Actions to sucessfully reintegrate Expatriates

!Identify new position prior to return
!No integration on a lower job level than before assignment
!Provide opportunities to use experience
!Recognize achievements
!Provide Repatriation Career Support
Prof. A Gottschalk
!Improve Performance Evaluation
Prof.
Dr.
A.
Gottschalk
!Provide repatriation support for families
2013
Business
Course:
IBWResource
/ Module:
Human
Management
36
36

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Spring

International Human Resources

Prof. Dr. Arnd Gottschalk

Human Resource Management, Organizational Behavior & Leadership

COURSE CALENDAR HUMAN RESOURCE MANAGEMENT

May, 21st. 2015

June, 13th. 2015

June, 18th. 2015

June, 25th. 2015

July, 2nd. 2015

Regions and Countries

! Case Study Strategic IHR

! International Employment Law, Labor

! Chapter 14 Comparative IHRM Operating in Other Regions

! Chapter 8 International Workforce Planning and Staffing

! Chapter 6 International Employment Law, Labor Standards,

! Chapter 12 International Employee Performance

2015 Prof. Dr. Arnd Gottschalk

Major : International Business

GLOBAL STAFFING & ASSIGNMENTS

2015 Prof. Dr. Arnd Gottschalk

Major : International Business

Many organizations now

INTERNATIONAL STAFFING STRATEGIES

2015 Prof. Dr. Arnd Gottschalk

Major : International Business

The characteristics of an ethnocentric approach are:

! Home country oriented

2015 Prof. Dr. Arnd Gottschalk

Major : International Business

The characteristics of a polycentric approach are:

! Centres around the host country

! There is not an exact corporate culture

! Limited controls/interventions from parent company

2015 Prof. Dr. Arnd Gottschalk

Major : International Business

The characteristics of a geocentric approach are:

! Communication is a more two way and interactive process

2015 Prof. Dr. Arnd Gottschalk

Major : International Business

! Parent country nationals (PCNs)

! Host country nationals (HCNs)

! Third country nationals (TCNs)

2015 Prof. Dr. Arnd Gottschalk

Major : International Business

ADVANTAGES AND DISADVANTAGES OF PCNS

2015 Prof. Dr. Arnd Gottschalk

Major : International Business

Source: Harzing and Van Ruysseveldt (2007:254)

ADVANTAGES AND DISADVANTAGES OF HCNS

2015 Prof. Dr. Arnd Gottschalk

Major : International Business

Source: Harzing and Van Ruysseveldt (2007:254)

ADVANTAGES AND DISADVANTAGES OF TCNS

2015 Prof. Dr. Arnd Gottschalk

Major : International Business

Source: Harzing and Van Ruysseveldt (2007:254)

DETAILED MEASURES OF INTERNATIONAL HUMAN

> Comany Manager <

> Country Manager <

> Global Manager <

> Regio Manager <

Mother, Host or other

Expat preparation courses