Chapter 2 Managing Across Cultures

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Chapter 2Managing Across Cultures

• Chapter 2(1) _ Global Culture2
• Chapter 2(2) _ Multicultural Teams11
• Chapter 2(3) _ Motivation in a Global Context36
• Chapter 2(4) _ Decision Making51
• Chapter 2(5) _ Leadership68
• Chapter 2(6) _ Global HRM92

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Chapter 2(1) _Global Culture
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CULTURAL MESSAGES COME FROM MULTIPLE SOURCES

• Domestic
• International
• Global
• although most common challenges are addressed by
  nations, a global civil society is emerging

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PEOPLE LOOK AT ALTERNATIVE ENTITIES FOR CULTURAL
DIRECTION

• Affiliative groups e.g., ethnic groups
• Nongovernmental organizations, e.g., the Womens
  League for Peace and Freedom
• Religious groups
• Regional associations, e.g., Economic Union
• Business organizations

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Multiple messages and sources create CONFUSION
AND UNCERTAINTY

• Leading to new questions national cultures are
  less well able to answer
• but
• In a global society, we dont have a sense of the
  appropriate rules by which all can live

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TRANSITION TIME?

• Are we at a point where nationality is less
  important to culture than in the past?

All of Us
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WE SEE THAT SOME VALUES ARE COVERGING, OTHERS ARE
NOT

• The Planet Project
• The Roper Poll of Values
• The World Values Survey
• The GLOBE Project

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GLOBE RESPONSES ON GENDER EGALITARIANISM SHOWS
COVERGENCE ON SHOULD BE
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GLOBE RESPONSES ON HUMANEORIENTATION ALSO SHOWS
COVERGENCE ON SHOULD BE
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QUESTIONS OF GLOBAL AND LOCAL CULTURES

• Will global culture replace or exist with local
  cultures?
• Will global culture bring positive or negative
  outcomes?

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Chapter 2(2)- Multicultural Teams
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Group
Two or more interacting individuals who come
together to achieve some objectives. Groups can
be either formal or informal, and further
subclassified into command, task, interest, or
friendship categories.
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Team
A specific type of group where an emphasis is put
on some level of member interdependence and on
achievement of common goals

• All teams are groups
• Some groups are just people assembled together
• Teams have task interdependence whereas some
  groups do not (e.g., group of employees enjoying
  lunch together)

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Reasons for Team Popularity

• Outperform individuals on tasks requiring
  multiple skills, judgment, and experience
• Better utilization of employee talents
• More flexible and responsive to changing events
• Facilitate employee participation in operating
  decisions
• Effective in democratizing the organization and
  increasing employee involvement and motivation

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Cohesiveness

• Social-Oriented Cohesiveness The degree to which
  members of the group are attracted to each other
  and motivated to stay in the group
• Task-Oriented Cohesiveness The degree to which
  group members work together, cooperate and
  coordinate their activity in order to achieve
  group goals

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Team Effectiveness Model
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Groups Across Cultures

• Two cultural dimensions are especially relevant
• Individualism-Collectivism
• Power Distance
• Also Uncertainty Avoidance e.g., potential for
  Role Conflict (esp. in multi-functional teams)

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The Challenge in Shaping Team Players

• Greatest where...
• The national culture is highly individualistic
• Introduced into organizations that historically
  value individual achievement

• Less demanding...
• Where employees have strong collectivist values,
  such as Japan or Mexico
• In new organizations that use teams as their
  initial form for structuring work

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Cross-Cultural Differences

• Crosscultural differences in intergroup
  processes
• Collectivistic cultures
• Expect little expression of conflict favor
  suppressing conflict
• Prefer to personalize interaction focus on
  people, despite what group they represent
• Group membership is an important part of identity
  and interaction

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Power Distance and SDWTs

• Nicholls et al. (1999) study of SDWT in Mexico
• Why are teams failing in a highly collectivist
  culture such as Mexico?
• Major challenges in implementing SDWTs
• Workers expect to exercise little control over
  work and not to be involved in decision making
• Expect clear instructions from the top and are
  not highly motivated by opportunity to initiate
  and take larger responsibility
• Can SDWT work in high-PD cultures? How?

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Interpersonal Relationships

• Individualists tend to have more friends, but
  with lesser intensity level
• Collectivists tend to have less friends, but with
  higher intensity level.
• Individualists are less suspicious towards
  out-group members and easier to make initial
  contact
• Collectivists have stronger bonds with in-group
  members

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Differential Group Processes

• Conformity who is more conforming?
• Formal/regulated participation vs. spontaneous
• Social loafing versus social striving
• Preferences for group vs. individual rewards
• Equality (you deserve what you get) vs. Equity
  (you get what you deserve) vs. Need based
  decisions (to all according to their needs)

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Conformity

• Crosscultural variations in tendency to accept
  group pressure for conformity to group norms
• Japanese encourage high conformity to norms of a
  group that has the person's primary loyalty
• German students (in some experimental research)
  showed a lower tendency to conform
• Moderate conformity among people in Hong Kong,
  Brazil, Lebanon, and the United States

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Teams Cultural Composition

• Cultural Diversity the number of different
  cultures represented in the group
• Cultural Norms the orientations of the specific
  cultures represented in the group toward group
  dynamics and processes and
• Relative Cultural Distance the extent to which
  group members are culturally different from each
  other

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Surface and Deep Diversity

• In multicultural teams, diversity can be in the
  form of
• Surface-level (black-American Caucasian-American
  French and Vietnamese) and/or
• Deep-level (Irish and English Singaporean and
  Chinese N. and S. Africans)

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Dynamics of Team Diversity
Social Context
Org. Context
Group Dynamics

• Affective
• Reactions
• Cohesion
• Satisfaction
• Commitment

• Team
• Behaviours
• Communication
• Conflict
• Cooperation

• Long-term
• Conseq.
• Performance
• Promotion
• Turnover

• Diversity
• Surface
• Deep

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Jackson, Joshi Erhardt (2003)

• Surface-level diversity has more immediate impact
  and is influential in early-stage/newly formed
  teams while deep-level becomes more important
  over time and its effects last longer.
• Diversity, in general, and cultural/ethnic
  diversity in particular, have mixed effects on
  team processes and performance
• Less effect on simpler, motor-based tasks more
  effect on complex, interdependent teamwork

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Earley Mosakowski (2000)

• Studied effects of heterogeneity in transnational
  teams using experimental and field settings
• Reasoned that the effects of national
  heterogeneity on team performance is non-linear
• Found that in the early stages, homogenous teams
  (those with only one major national group
  identity) outperformed both moderately
  heterogeneous (groups with two different
  sub-group identities) and highly heterogeneous
  (no clear sub-group identities exist) teams.

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Earley Mosakowski (2000)

• In the longer term, high-heterogeneous teams
  performance increased as they managed to create a
  hybrid-culture
• Such hybrid culture was not created in moderately
  heterogeneous teams, whose performance was lower
  than both high and low heterogeneity teams.
• Team processes mediated the effects of
  heterogeneity on team performance, such that
• In homogenous groups, members perceived many
  similarities between themselves (remember SIT?)
  trust, shared mental models and open
  communication developed early on in the teams
  life

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Earley Mosakowski (2000)

• In moderately heterogeneous teams, a dynamic of
  us vs. them prevailed, with the two sub-groups
  sticking to themselves in times of conflict,
  resulting in little cross sub-group cooperation
• In highly heterogeneous teams, as time passed,
  members go to know each other better and since
  there were no dominant sub-groups, they were free
  to form a hybrid culture-unique to their team
  and overarching each members national identity.
• Implications for joint ventures and projects
  where two cultures (national or organizational)
  get together to try to create a cooperative
  structure

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Diversity and Teams

• Overall, diversity causes process losses
• Can be beneficial if team overcomes these losses
  over time
• Depends on organizational culture and
  top-management support
• Highly heterogeneous and highly homogenous teams
  work better than mid-range ones
• Fault lines in teams lead to rivalry coalitions
  gt decrease effectiveness

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Conditions for Effectiveness
More Effective Less Effective
Task Innovative Routine
Stage Divergence (earlier) Convergence (later)
Conditions Differences Recognized Differences Ignore
Task-based member selection Culture-base members selection
Pluralism Ethnocentrism
Equal Power Cultural Dominance
Superordinate goals Individual goals
External feedback No feedback/autonomy
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Some Implications

• Investment in diverse teams is more sensible for
  the longer-term, for complex tasks and when team
  members are (relatively) pluralistic
• More careful task design is needed
• Positive feedback, early on
• Preparation and training, through conceptual and
  experiential approaches is recommended
• Strive to create a third culture through
  superordinate goals and neutralization of
  differences

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Diversity Beyond the Obvious

• Seemingly culturally similar team members may
  have the hardest time to get along need to take
  into account other variables besides culture
  (history, class)
• Idiosyncratic cultural variables, e.g.,
  intellectual style (Russians vs. N. Americans)
• Prior experience with different cultures plays
  important role (usually for the better)
• Virtual Teams added complexity

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Chapter 2(3)-Motivation in a Global Context
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The Basic Motivation Process
Introduction to Motivation
Motivation Psychological process through which
unsatisfied wants or needs lead to drives that
are aimed at goals or incentives
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Introduction to Motivation

• Need Theories
• Cognitive theories
• Expectancy theory describes internal processes
  of choice among different behaviors
• Equity theory describes how and why people react
  when they feel unfairly treated
• Goal setting theory focuses on how to set goals
  for people to reach
• Behavioral theory
• Behavior modification focuses on observable
  behavior, not internal psychological processes

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Basic Assumptions

• The Universalist Assumption
• All people are motivated to pursue goals they
  value
• Specific content of the goals that are pursued
  will be influenced by culture
• Movement toward market economies may make
  motivation more similar in different countries

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Attitudes and Personality

• Personality characteristics
• People in individualistic cultures (United
  States) have stronger need for autonomy than
  people in grouporiented cultures (Japan)
• People in cultures that emphasize avoiding
  uncertainty (Belgium, Peru) have stronger need
  for security than people in cultures that are
  less concerned about avoiding uncertainty
  (Singapore, Ireland)

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Need Theories of Motivation

• Concept of needs holds across cultures
• People from different cultures may express and
  satisfy needs differently
• Importance of needs in Maslow's need hierarchy
• United States selfactualization
• Latin America security, affiliation
• France and Germany need for security
• New Zealand belongingness and love
• McClelland needs for affiliation, power and
  achievement

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International Aspects ofJob Design

• Herzberg Two Factor Theory
• Individual and groupbased job design
• U.S. managers have mostly used individual
  approaches to job design
• Recent shifts to groupbased approaches
• Managers in other industrialized countries have
  mainly emphasized groupbased job design

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Job Design (Cont.)

• Changing specific job characteristics
• Belgium, Mexico, Greece, Thailand not likely to
  accept efforts to increase autonomy and task
  identity
• French managers particularly dislike
  recommendations to decentralize decision
  authority. Subordinates do not expect them to do
  so
• Quality circles big success in Japan, but only
  partial in the US

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Cognitive and Behavioral Theories of Motivation

• Two assumptions that could restrict use of these
  theories outside the U.S.
• Individual controls decisions about future
  actions
• Manager can deliberately shape the behavior of
  people

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Cognitive and Behavioral Theories of Motivation

• Both assumptions reflect U.S. values of free
  will, individualism, individual control
• Cultural contrasts
• Muslim managers believe something happens mainly
  because God wills it to happen
• Hong Kong Chinese believe luck plays a role in
  all events

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Cognitive and Behavioral Theories

• Expectancy theory's validity in other cultures
• Japanese female life insurance sales
  representatives responded to commission system as
  expected
• Russian textile workers
• Linked valued extrinsic rewards to worker
  performance
• Productivity increased as the theory predicts
• Generally, expectancy theory best explains
  motivation of people in cultures that emphasize
  internal attribution

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Cognitive and Behavioral Theories (Cont.)

• Equity theory complex crosscultural effects
• Reward allocation decisions followed equity
  theory premises in U.S., Russian, and Chinese
  samples
• Other studies
• Chinese emphasized seniority in their reward
  decisions more than Americans.
• Eastern European transition economies endorsed
  positive inequity more than American students

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Culture Motivation

• Research on goal setting theory in several
  countries
• Results consistent with U.S. work that formulated
  the theory
• Some cultural differences
• U.S. students not affected by how goals were set
• Israeli students performed better when goals were
  set participatively consistent with culture of
  cooperation

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Idiosyncratic Factors

• Beyond cultures variance along the major
  cultural value dimensions, there are specific
  aspects anchored in nations history and
  expressed through its symbols and language.

Ignoring such factors may render motivational
techniques ineffective or even result in
de-motivation e.g. Slay the Dragon!!
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Chap 2(4)- Decision Making
across Cultures
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Decision Making

• Process of choosing a course of action among
  alternatives

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Various Factors

• Time Orientation
• Deciding for the short/long term?
• How long to make a decision?
• Polichronic or monochronic style?
• Who decides Groups vs. Individuals
• Voting vs. Consensus based decisions
• Process Participative vs. Autocratic

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Value of Rationality

• Strong preference for rational D.M. vs.
• Occasional or low value on rationality
• In some cultures more emphasis on
• Emotions
• Religion
• Ideology

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Rational Decision Making

• The Rational Approach assumes that
• Managers follow a systematic, step-by-step
  process.
• Organization is economically based and is managed
  by decision makers who are entirely objective and
  have complete information.
• It assumes that rational choices are
• Consistent
• Value-maximizing
• Within specified constraints

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The Six-Step Rational Decision-Making Model

• 1. Define the problem
• 2. Identify decision criteria
• 3. Weight the criteria
• 4. Generate alternatives
• 5. Rate each alternative on each criterion
• 6. Compute the optimal decision

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Cultural Contingencies in Decision Making
Step
1. Problem Recognition Problem solving change Situation acceptance
2. Information Search Gathering facts Gathering ideas and possibilities
3. Construction of Alternatives New, future oriented based on change Past/present/future based on stability
4. Choice Individual level delegation of responsibility fast Group level by senior management slowly
5. Implementation Slow top-down Fast broad participation
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Case Study The Road to Hell (p. 512)

• What mistakes did John Baker Made? Why did he not
  realize his mistake when it occurred?
• What would you recommend that Baker do now?
• What do you learn from this case about human
  resource management across different nations?

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Stages of Moral Development
Stage Description
Level
Principled
Conventional
Pre-conventional
Adapted from L. Kohlberg, Moral Stages and
Moralization The Cognitive-Developmental
approach, pages 34-55 in Moral Develop and
Behavior Theory, Research, and Social Issues,
ed. T. Lickona (New York Holt, Rinehart
Winston, 1976).
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Three Different Criteria in Making Ethical Choices

• Utilitarian Criterion - made solely on basis of
  outcomes or consequences
• Focus on Rights - made consistently with
  fundamental liberties and privileges
• Focus on Justice - requires imposing and
  enforcing rules fairly and impartially for
  equitable distribution of benefits and costs

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Ethical Aspects of Decisions

• Multinational firms face many ethical questions
  and issues
• Operate in many countries subject to the laws of
  those countries
• Legal and social context of globally oriented
  organizations can present their managers with
  ethical dilemmas

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Ethical Aspects of Decisions
Two ethical views
Culturalrelativism
Ethicalrealism
Multinationalorganization
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Ethical Aspects of Decisions

• Ethical views
• Cultural relativism
• Cultural relativism refers to differences in
  ethical values among different cultures
• Premise right and wrong should be decided by
  each society's predominant ethical values
• Cultural relativists base their argument on three
  points

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Ethical Aspects of Decisions

• Cultural relativism (cont.)
• Three points
• Moral judgments are statements of feelings and
  opinions neither wrong nor right
• Moral judgments are based on local ethical
  systems cannot judge right or wrong across
  cultures
• Prudent approach do not claim an action is
  either right or wrong

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Ethical Aspects of Decisions

• Cultural relativism (cont.)
• Managers should behave according to local ethical
  systems, even if behavior violates home country
  ethical system
• Many philosophers reject cultural relativism's
  argument that codes of ethics cannot cross
  national boundaries
• Agree that countries vary in defining right and
  wrong

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Ethical Aspects of Decisions

• Ethical realism
• Morality does not apply to international
  transactions
• Because no power rules over international events,
  people will not behave morally
• Because others will not behave morally, one is
  not morally required to behave ethically

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Ethical Aspects of Decisions

• International ethical dilemmas
• Goods made in a country with no child labor laws
• Goods made in a country with child labor laws
  that are not enforced
• Changing the behavior of local people
• Making small payments that are allowed under the
  companys national law

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Chapter 2(5)-Leadership
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Definitions

• There are almost as many definitions of
  leadership as there are theoriessome of the more
  common ones are
• Ability to influence a group toward the
  achievement of goals.
• The process whereby one individual influences
  other group members towards the attainment of
  defined group or organisational goals.
• The process of creating vision for others and
  having the power to translate it into a reality
  and sustain it.

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Foundation for Leadership
Leadership Behaviors and Styles
Authoritarian Leadership
Paternalistic Leadership
Participative Leadership
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LeaderSubordinate Interactions
Authoritarian Leader
Subordinate
Subordinate
Subordinate
One-way downward flow of information and
influence from authoritarian leader to
subordinates.
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LeaderSubordinate Interactions
Paternalistic Leader
Subordinate
Subordinate
Subordinate
Continual interaction and exchange of information
and influence between leader and subordinates.
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LeaderSubordinate Interactions
Participative Leader
Subordinate
Subordinate
Subordinate
Continual interaction and exchange of information
and influence between leader and subordinates.
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Contingency Theories

• Leaders use various leadership styles/behaviours
• Quality of leadership experience depends on
  several situational factors, including followers
  and task type.
• Path-Goal Model - Leader assists followers in
  attaining goals and ensures goals are compatible
  with overall objectives

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Path-Goal Theory

• A theory of leadership suggesting that
  subordinates will be motivated by a leader only
  to the extent they perceive this individual as
  helping them to attain valued goals.

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Path-Goal Theory

• Four basic leadership styles
• Instrumental (directive) An approach focused on
  providing specific guidance and establishing work
  schedules and rules.
• Supportive A style focused on establishing good
  relations with subordinates and satisfying their
  needs.
• Participative A pattern in which the leader
  consults with subordinates, permitting them to
  participate in decisions.
• Achievement Oriented An approach in which the
  leader sets challenging goals and seeks
  improvements in performance.

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Path-Goal Theory
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Leadership

• Core values of countrys culture often define
  type of leadership behavior that is acceptable
• In high PD, an emphasis on hierarchical
  relationshipsdirective approaches accepted Hong
  Kong, Latin American countries Russia
• In low PD, hierarchical relationships are not
  valued supportive (or participative) approaches
  accepted Austria, Scandinavia, Israel

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Leadership

• Individualism-Collectivism
• Leader as a paternal figure vs. leader as an
  expert
• Degree to which intervention of leader in
  followers private lives is expected and accepted
• Masculine/Feminine
• Acceptance of women as leaders
• Accepted style for leaders
• Long-Term-Orientation
• Elect leaders for four yearsor forty?
• Leaders style first among equals (China) or
  class of its own (Arab Countries)

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GLOBE Project

• Multi-country study and evaluation of cultural
  attributes and leadership behavior
• Are transformational characteristics of
  leadership universally endorsed?
• 170 country co-investigators
• 65 different cultures
• 17,500 middle managers
• 800 organizations

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GLOBE Project

• Which traits are universally viewed as
  impediments to leadership effectiveness?
• Based on beliefs that
• Certain attributes that distinguish one culture
  from others can be used to predict the most
  suitable, effective and acceptable organizational
  and leader practices within that culture
• Societal culture has direct impact on
  organizational culture
• Leader acceptance stems from tying leader
  attributes and behaviors to subordinate norms

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GLOBE Cultural Variable Results
Variable Highest Medium Lowest Ranking Ranking Ra
nking
Assertiveness Spain, U.S. Egypt, Ireland Sweden,
New Zealand
Future orientation Denmark, Canada Slovenia,
Egypt Russia, Argentina
Gender differentiation South Korea, Italy,
Brazil Sweden Denmark Egypt
Uncertainty avoidance Austria, Denmark Israel,
U.S. Russia, Hungary
Power distance Russia, Spain England,
France Demark, Netherlands
Collectivism/Societal Denmark, Hong Kong,
U.S. Greece, Hungary Singapore
In-group collectivism Egypt, China England,
France Denmark, Netherlands
Performance orientation U.S., Taiwan Sweden,
Israel Russia, Argentina
Humane orientation Indonesia, Egypt Hong Kong,
Germany, Spain Sweden
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Universal Leadership Attributes

• Positive
• Trustworthy
• Just
• Honest
• Charisma
• Inspiration Vision
• Team-Orientation
• Excellence-Oriented
• Decisive
• Intelligent

• Negative
• Loner
• Non-Cooperative
• Ruthless
• Non-explicit
• Irritable
• Dictatorial

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Leadership and Management

• Need to bear in mind that leadership style is
  very much situation dependent for example, in
  some situations (e.g., emergency) and in some
  organizational cultures, directive style will be
  accepted even in a country like the US
• Participation is more likely if the basis of
  power is more achievement based (instrumental)
  than if it is ascribed (personal) and
• Degree of participation in decision making and
  leadership by subordinates vary cross-nationally

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Leadership in theInternational Context
Attitudes of European Managers Toward Leadership
Practices
European managers tend to use a participative
approach. Researchers investigated four areas
relevant to leadership.

• Does the leader believe that employees prefer to
  be directed and have little ambition? (Theory X)
  OR
• Does the leader believe that characteristics such
  as initiative can be acquired by most people
  regardless of their inborn traits and abilities?
  (Theory Y)

Capacity for Leadership and Initiative
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Leadership in the International Context
Attitudes of European Managers Toward Leadership
Practices
Most evidence indicates European managers tend to
use a participative approach. Researchers
investigated four areas relevant to leadership.
Capacity for Leadership and Initiative

• Does the leader believe that detailed, complete
  instructions should be given to subordinates and
  that subordinates need only this information to
  do their jobs?
• OR
• Does the leader believe that general directions
  are sufficient and that subordinates can use
  their initiative in working out the details?

Sharing Information and Objectives
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Leadership in the International Context
Attitudes of European Managers Toward Leadership
Practices
Most evidence indicates European managers tend to
use a participative approach. Researchers
investigated four areas relevant to leadership.

• Does the leader support participative leadership
  practices?

Capacity for Leadership and Initiative
Sharing Information and Objectives
Participation
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Leadership in the International Context
Attitudes of European Managers Toward Leadership
Practices
Most evidence indicates European managers tend to
use a participative approach. Researchers
investigated four areas relevant to leadership.

• Does the leader believe that the most effective
  way to control employees is through rewards and
  punishment?
• OR
• Does the leader believe that employees respond
  best to internally generated control?

Capacity for Leadership and Initiative
Sharing Information and Objectives
Participation
Internal Control
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Japanese vs. U.S. Leadership Styles
Dimension Japan US
Employment Often for life Often short-term
Evaluation Slow, takes many years Fast those not promoted often leave
Career Paths Very general based on rotations v. specialised people stay in one area
Dec. Making Group based By individual managers
Control Mech. Implicit informal reliance on trust and goodwill Explicit based on knowing the control mechanisms
Responsibility Shared collectively Assigned individually
Concern for employees Broad and covers the whole life limited to work-life
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Differences in Middle Eastern and Western
Management
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Differences in Middle Eastern and Western
Management
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Leadership-Other Issues

• Emphasis on Emotional Intelligence is especially
  important for leading cross-culturally
• Idiosyncratic effects paradoxes
• Moderately masculine Muslim and Hindu nations
  with traditional views on womenbut,
• Israel, India, Pakistan and other exceptions
• Charismatic leadership is not universally accepted

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Chapter 2(6)-GLOBAL HUMAN RESOURCES
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HR Challenges of International Business
Researchers asked What are the key global
pressures affecting human resource management
practices in your firm currently and for the
projected future? Responses were

• Deployment
• Knowledge and innovation dissemination
• Identifying and developing talent globally

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Global Staffing Pressures

• Candidate selections
• Assignment terms
• Relocation
• Immigration
• Culture and language
• Compensation
• Tax administration
• Handling spouse and dependent matters

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Economic Differences

• Translate into differences in HR practices
• Espousing ideals of free enterprise
• Wage costs vary
• Other labor costs vary severance pay holidays

US 19.86
Mexico 2.46
Taiwan 5.98
UK 15.88
Germany 29.01
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International Labor Relations

• Union membership varies widely worldwide

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International Staffing

• Multinational corporations (MNCs) use several
  types of international managers
• Locals
• Expatriates
• Home-country nationals
• Third-country nationals

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Sources of Human Resources

• Home Country Nationals
• Expatriate managers who are citizens of the
  country where the MNC is headquartered
• Expatriates
• Those who live and work away from their home
  country
• Citizens of the country where the MNC is
  headquartered
• Expatriates are useful for
• starting up operations
• providing technical expertise
• helping the MNC maintain financial control over
  the operation
• Expatriates almost always were men
• Situation is changing
• Expatriates typically used in top management
  positions

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Sources of Human Resources

• Host-Country Nationals
• Local managers who are hired by the MNC
• Used in middle- and lower-level management
  positions
• Nativization
• Requirement of host-country government that
  mandates employment of host-country nationals

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Sources of Human Resources

• Third-Country Nationals (TCNs)
• Citizens of countries other than the one in which
  the MNC is headquartered or the one in which the
  managers are assigned to work by the MNC
• Found in MNCs that have progressed through the
  initial and middle stages of internationalization

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Sources of Human Resources

• Advantages of using TCNs
• Require less compensation
• Good working knowledge of the region
• Given home office experience, often can achieve
  objectives better than other types of managers
• Offer different perspectives

103
Failure Rates of International Assignments

• International assignment failure can cost
  hundreds of thousands of euros

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Why InternationalAssignments Fail

• Personality
• Persons intentions
• Family pressures
• Lack of cultural skills
• Other non-work conditions like living and housing
  conditions, and health care

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Improving Failure Rates/Solutions

• Provide realistic previews
• Have a careful screening process
• Improve orientation
• Provide good benefits
• Test employees fairly
• Shorten assignment length

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Important Predictors of Success

• Family situation tops the list
• Flexibility/adaptability screening was high on
  results
• Use paper and pencil tests like the Overseas
  Assignment Inventory
• Previewing what changes an international assignee
  can expect

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SelectingInternational Managers

• Test for traits that predict success in adapting
  to new environments
• Job knowledge and motivation
• Relational skills
• Flexibility and adaptability
• Extra-cultural openness
• Family situation

Predictive trait breakdown
108
Traits Distinguishing Successful International
Executives
SCALE Sensitive to Cultural Differences Business
Knowledge Courage to Take a Stand Brings Out the
Best in People Acts with Integrity Is
Insightful Is Committed to Success Takes
Risks Uses Feedback Is Culturally
Adventurous Seeks Opportunities to Learn Is Open
to Criticism Seeks Feedback Is Flexible Reverse
scored
SAMPLE ITEM When working with people from other
cultures, works hard to understand their
perspectives. Has a solid understanding of our
products and services. Is willing to take a stand
on issues. Has a special talent for dealing with
people. Can be depended on to tell the truth
regardless of circumstances. Is good at
identifying the most important part of a complex
problem or issue. Clearly demonstrates commitment
to seeing the organization succeed. Takes
personal as well as business risks. Has changed
as a result of feedback. Enjoys the challenge of
working in countries other than his/her
own. Takes advantage of opportunities to do new
things. Appears brittleas if criticism might
cause him/her to break. Pursues feedback even
when others are reluctant to give in. Doesnt get
so invested in things that she/he cannot change
when something doesnt work.
109
Performance Appraisal of International Mangers
Five suggestions for improving the expatriate
appraisal process
1. Stipulate the assignments difficulty level.
For example, being an expatriate manager in
China is generally considered more difficult than
working in England, and the appraisal should
take such difficulty-level differences into
account. 2. Weight the evaluation more toward
the on-site managers appraisal than toward
the home-site managers distant perceptions of
the employees performance.
110
Performance Appraisal of International Mangers

• 3. If however (as is usually the case), the
  home-site manager does the actual
• written appraisal, have him or her use a
  former expatriate from the same
• overseas location to provide background
  advice during the appraisal process.
• 4. Modify the normal performance criteria used
  for that particular position to
• fit the overseas position and
  characteristics of that particular locale.
• 5. Attempt to give the expatriate manager credit
  for his or her insights into
• the functioning of the operation and
  specifically the interdependencies
• of the domestic and foreign operations.

111
The New WorkplaceSending Women Abroad

• In the US, only 6 filled overseas positions
  compared to 49 domestic
• One survey found inaccurate stereotypes
• Not as internationally mobile
• Might have a tougher time building teams

77 Effective at building teams
80 Would take foreign assignment
112
Performance Appraisal of International Mangers
Five suggestions for improving the expatriate
appraisal process
1. Stipulate the assignments difficulty level.
For example, being an expatriate manager in
China is generally considered more difficult than
working in England, and the appraisal should
take such difficulty-level differences into
account. 2. Weight the evaluation more toward
the on-site managers appraisal than toward
the home-site managers distant perceptions of
the employees performance.
113
Performance Appraisal of International Mangers

• 3. If however (as is usually the case), the
  home-site manager does the actual
• written appraisal, have him or her use a
  former expatriate from the same
• overseas location to provide background
  advice during the appraisal process.
• 4. Modify the normal performance criteria used
  for that particular position to
• fit the overseas position and
  characteristics of that particular locale.
• 5. Attempt to give the expatriate manager credit
  for his or her insights into
• the functioning of the operation and
  specifically the interdependencies
• of the domestic and foreign operations.

114
Culture Shock!?

• Disorientation upon entering a new cultural
  environment
• Normal use of own cultural filter fails
• interpretation of perceptions
• communication of intentions
• All people experience culture shock... Past
  experience and training can shorten its length

115
Culture Shock

• Responses
• Gone native (assimilation) accepts the new...
  rejects own
• Participator (integration) adapts to the new ...
  but retains own
• Tourist (separation) avoids the new...
• Outcast (marginalization) wont/cant adapt...
  rejects own...

116
Phases

• Honeymoon
• euphoria, unrealistically positive attitudes
  towards host country, stay in hotel shields from
  mundane difficulties, house hunting/school
  hunting exciting, sightseeing!!
• Irritation and Hostility (the crisis stage)
• problems adjusting at work, local clocks don't
  fit yours, difficulties getting the routine daily
  tasks done, everything stinks some never recover

117
Symptoms

• homesickness
• boredom
• withdrawal (reading is an obsession, focus on
  home nationals, avoid host nationals)
• excessive sleep need, compulsive eating and
  drinking
• irritability
• exaggerated cleanliness

118
Symptoms (cont.)

• marital stress, family tension, conflict
• stereotyping host nationals
• hostility towards host nationals
• loss of ability to work effectively
• fits of weeping
• psychosomatic illnesses

119
Phases

• Gradual Adjustment
• can manage, cope with situation now
• Biculturalism/Coping
• ability to function in both cultures, acceptance
  of local customs and values for what they are
  (not going native), possible to get by, positive
  and growth gaining experience

120
Nature of Culture Shock

• Not a jolt, rather a series of cumulative
  experiences
• Cultural differences become focus of attention
• Foreign ways are quaint no more... they seem
  inferior to your own

121
What Special Training Do Overseas Candidates
Need?

• Impact of cultural differences
• Understanding attitude formation
• Factual knowledge about target country
• Language and adjustment/adaptability skills

122
Four Step Approach to Training Overseas Candidates

• Level 1 training focuses on the impact of
  cultural differences, and on raising trainees
  awareness of such differences and their impact on
  business outcomes.
• Level 2 training aims at getting participants to
  understand how attitudes (both negative and
  positive) are formed and how they influence
  behavior.
• Level 3 training provides factual knowledge about
  the target country.
• Level 4 training provides skill building in areas
  like language and adjustment and adaptation
  skills.

123
Cross-Cultural Training
Training Time
Training Rigor
High
Months
Immersion Approach
Assessment Field experience Simulations Sensitivit
y training Language intensive
Affective Approach
Culture assimilator training Role-playing Cases St
ress reduction training Cultural
Briefings Language Moderate
Weeks
Information Giving
Geographic briefings Cultural Briefings Films/Book
s Interpreters Language Survival
Day(s)
Low
Length of Assignment
Weeks
Years
Months
124
Repatriation of Expatriates

• Repatriation
• Return to ones home country from an overseas
  management assignment
• Reasons for returning
• Formally agreed-on tour of duty is over
• Expats want their children educated in the home
  country
• Unhappiness with foreign assignment
• Failure to perform well
• Readjustment problems
• Permanent position upon return constitutes a
  demotion
• Lack opportunity to use skills learned abroad
  upon return
• Salary and benefits may decrease upon return

125
Repatriation Problems

• Leaving the firm prematurely
• Mediocre or makeshift jobs
• Finding former colleagues promoted
• Reverse culture shock

126
Repatriation
Several steps can be taken to avoid repatriation
problems

• Write repatriation agreements
• Shorten Assignment periods
• Assign a sponsor
• Provide career counseling
• Keep communications open
• Offer financial support
• Develop reorientation programs
• Build in return trips